SHAREHOLDER DISPUTES IN ASIA
CD: Are you seeing an increase in the number of shareholder disputes across Asia? What are some of the common causes of such disputes?
Meeson: Asia has always been a rich source of shareholder disputes, particularly in relation to BVI companies. BVI companies are popular in Asia for use as private companies to hold investments, property or as a joint venture vehicle. We have seen an increase in shareholder disputes, but there have been some changes in the types of disputes that we are seeing. In relation to BVI companies, a typical scenario will see People’s Republic of China (PRC) based shareholders fall out for business or personal reasons. However, we have seen a rise in what could be described as ‘family’ disputes. This can mean ‘family’ in a matrimonial context where husband and wife may be shareholders in a family business or where family assets are held in a corporate structure. The other ‘family’ area is what could be called an ‘inheritance’ context where the family business is passing from one generation to another and the children of the founder cannot agree on the way forward, or have personal animosity between them. In addition, we have seen a number of significant shareholder disputes in relation to listed companies with business operations in the PRC. These are typically Cayman or Bermuda companies listed in Hong Kong or on a US exchange. They usually involve disputes arising out of the manner in which the business is being managed or a struggle for management control.
CD: Have any recent, high-profile shareholder disputes caught your attention? What unique challenges and legal considerations do these cases highlight?
Apr-Jun 2017 issue
Conyers Dill & Pearman