Since August 2004 10, a professor from the Chinese University of Hong Kong questioned and exposed the financial fraud of Guangdong Kelon Electric Appliance Co., Ltd. and its former chairman Gu, the false statement case of Kelon Electric Appliance has been the focus of investors, shareholders of small and medium-sized tradable shares, securities regulatory authorities, judicial organs and news media. At the same time, Deloitte Touche Tohmatsu Certified Public Accountants, the auditor of Kelon Electric's financial report, was also exposed to fraud, Gu and others were arrested and may be prosecuted, while China Securities Regulatory Commission investigated Kelon Electric and Deloitte Touche Tohmatsu Certified Public Accountants for alleged violations.
Therefore, according to the Securities Law and the Provisions of the Supreme People's Court on the Trial of Civil Compensation Cases Caused by False Statements, the majority of Kelon Electric investors whose rights and interests have been damaged will soon be able to file a civil compensation lawsuit according to law and recover the relevant losses. What we need to wait for now is the administrative punishment decision of China Securities Regulatory Commission or the criminal judgment of the relevant court (whichever comes first). The objects that Kelon Electric can sue in civil compensation litigation can include (not limited to): Kelon Electric; Gu and other former directors, senior managers and directly responsible personnel; Members of the original board of supervisors and independent directors who have dereliction of duty; Audit firms and related certified public accountants, etc. Investors who can sue Kelon Electric are limited, and should meet the following conditions: investors who bought the company's shares after the publication of Kelon Electric's 2002 annual report, sold them or continued to hold them after August 10, 2004, and suffered losses after calculation.
At the same time, according to the provisions of the Securities Law and the Company Law, the shareholders of small and medium-sized tradable shares can legally request the current board of directors of Kelon Electric to recover losses as soon as possible, otherwise they can file a shareholder representative lawsuit, or form a favorable resolution for the shareholders' meeting by collecting voting rights and convening an extraordinary shareholders' meeting.
In the five years since 200 1, about 20 listed companies have become defendants in civil compensation cases of false statements, and about 1 10,000 investors with damaged rights and interests have served as plaintiffs. The total target of all cases is 800-900 million yuan, involving about 16- 17 of the intermediate people's court and 3-4 of the higher people's court, and currently involving about 65,437. We believe that, in terms of the number of victims, the total amount of infringement and the huge social impact, the civil compensation cases of Kelon and Deloitte's misrepresentation of securities may go hand in hand with the civil compensation cases of Yin's misrepresentation of securities and Dongfang Electronics' misrepresentation of securities, which will become the three major cases in the history of fraudulent rights protection in China's securities market. At present, substantial progress has been made in the compensation for the Yinguangxia case, and it is possible for Yinguangxia Company to reach a settlement with more than half of the plaintiff investors through share reform. Under the auspices of the court, the original defendant and the defendant's agent in Dongfang Electronics case have been talking and communicating constantly. It is expected that the case will reach a settlement and compensation through the linkage with the share reform. With the introduction of the administrative punishment decision of CSRC, the civil compensation for securities in Kelon and Deloitte cases will also surface.
Therefore, in view of the large number of victims, the wide geographical distribution, the huge amount of infringement, the great social impact, and the complexity of the legal relationship and litigation requirements of Kelon and Deloitte Securities, we formed the "National Lawyers' Rights Protection Group Kelon and Deloitte Securities' Civil Compensation for False Statements" with 22 law firms and 30 lawyers in 12 provinces and cities nationwide, and passed the shanghai securities news. Most lawyers of the rights protection group participated in it. Participated in civil compensation cases: Yinguangxia case, Dongfang Electronics case, Jiabao Industrial case, Science and Technology case, Sanjiu Medicine case, Jinzhou Port case, Zheng case, ST Bohai case, ecological agriculture case, Jinan Qingqi case, Shenyang Xinkai case, etc. They were sued for audit responsibility in the Jinzhou Port case. The feature of this rights group is openness. We sincerely welcome law firms and their lawyers who have provided or intend to provide rights protection services for investors or shareholders of small and medium-sized tradable shares in Kelon and Deloitte's civil compensation cases for misrepresentation of securities, and conduct mutual discussions, exchanges, consultations and cooperation. The rights protection team temporarily arranged lawyer Song Yixin of Shanghai Wang Xinda Law Firm as the temporary convener to be responsible for the liaison work of the rights protection team.
The main tasks of the rights protection group are: (1) providing relevant legal advice and non-litigation legal services to investors and shareholders of small and medium-sized tradable shares whose rights and interests have been damaged in Kelon and Deloitte cases; (2) Providing all kinds of litigation agency services from litigation to execution for investors whose rights and interests are damaged in Kelon and Deloitte cases; (3) Defending the rights of minority shareholders in Kelon and Deloitte cases, collecting voting rights or bringing a shareholder representative lawsuit; (4) After the China Securities Regulatory Commission issued the administrative penalty decision, a special seminar was held to discuss matters related to lawyers' agency services in Kelon and Deloitte cases; (5) strengthen the mutual communication, exchange, consultation and coordination between the law firm and lawyers of this rights protection group; (6) Other matters.