Gansu province high level people's court

Civil judgment

(2011Gan min two) with the word no.96No.

The appellant (the plaintiff): Suzhou Industrial Park Fu investment company limited.

Legal representative: Zhang Yibin, chairman of the company.

Attorney: Ching Yi, Beijing law firm lawyers.

Attorney: Tu Hai Tao, Beijing law firm lawyers.

Appellee (defendant in the original instance): limited by the Gansu province nonferrous resources.

Legal representative: Lu Bo, general manager of the company.

Attorney: Sun Geng, Gansu Dehe lawyer.

Appellee (defendant in the original instance): Hongkong Concordia Co. Ltd. (WISDOM ASIA LIMITED).

Legal representative: Lu Bo, general manager of the company.

Attorney: Sun Geng, Gansu Dehe lawyer.

Appellee (defendant in the original instance): Lu Bo, female, the Han nationality.

Attorney: Sun Geng, Gansu Dehe lawyer.

The appellant Suzhou Industrial Park Fu Investment Company Limited (hereinafter referred to as Haifu company) and the appellee Gansu Shiheng non-ferrous Recycling Resources Co. Ltd. (hereinafter referred to as the eternal company), Hongkong Concordia Co. Ltd. (hereinafter referred to as the Concordia company), Lu Bo company investment dispute case, the Lanzhou intermediate people's court (2010Blue Famin three) at the beginning of the word no.71Civil judgment, and appealed to the hospital. The court shall form a collegial panel to conduct a public trial, Haifu company entrusted agent Ji Jingyi, Tu Haitao, Shiheng company, Diya company and Lu Bo attorney Sun Geng to take part in the proceedings. Now the trial has been closed.

The trial court found:2007Years11Month1Recently, Gansu stars Zinc Industry Co., Ltd.(Hereinafter referred to as the star company)As the Party of the first part, Haifu company as Party B as C, DIA, Lu Bo as cubes, signed a "Gansu stars Zinc Industry Co. Ltd. capital agreement" (hereinafter referred to as the "capital agreement"), which agreed: party a registered capital of384Million dollars of investment, C100The parties agree that Party B%, with cash2000Million yuan RMB to party a capital, total registered capital after the capital increase of Party A3.85C%, accounting for96.15%. According to the contents of the agreement, Party C and Party B signed a joint venture contract and articles of association of the company and to revise, revise the joint venture contract and constitution after the approval date10Money capital days once subscribed to the account designated by Party a.. The joint venture contract and the revised charter, approved by the competent department of the government in effect. B in the obligation of contribution, he promised to2007Years12Month31Days before the Sichuan Province Ebian County five Du Niu Gang lead-zinc ore transfer to Party A's name. The raised funds are mainly used for the following items:1The acquisition, a production capacity of Gansu province is greater than1.5Zinc smelter million tons;2The development of Sichuan Province, Ebian County Niu gang mine;3, input500Technology circulation smelting million for the. Seventh special agreement first: after the signing of this agreement, Party A should be established as soon as possible"Restructuring of listed companies working group"Restructuring of listed companies, started the preparatory arrangements for the preparatory work, the working group members by the representatives of shareholders and management personnel. The parties to this agreement should be in when conditions will change the composition specification of the Limited by Share Ltd, and strive for listing on stock exchanges in china. Second performance objectives agreed:First party2008The annual net profit of not less than3000Million yuan. If Party A2008The actual net profit to finish3000Million yuan, Party B has the right to request Party A to compensation, if Party A fails to perform compensation obligations, Party B has the right to request Party C to perform compensation obligation. The amount of compensation= (1-2008The actual net profit /3000Million yuan) *The amount of investment. Fourth equity repurchase agreement: if to2010Years10Month20Japan, as the party cause cannot complete all the shares listed, Party B has the right to request Party at any one time back then Party B by Party A, Party C shall receive the written notice from the date of Party B180Days according to the agreed repurchase amount to Party B one-time payment of the full price. If the self2008Years1Month1Date, party a net assets yield more than10%, then Party B to Party A the amount of repurchase shares corresponding equity book value; if the self2008Years1Month1Date, Party A's net assets year returns ratio below10C%, then repurchase amount(Party B's original investment amount-The amount of compensation* (1+10)%*Days / investment360.. In addition, also provides for information disclosure, liability for breach of contract, but also agreed to the deal is signed and sealed by authorized representatives of the parties, and the first note signed agreement date. Protocol is not specified or agreed unknown matters, reference shall be made to the articles of association shareholders by Party A and the modified the investment contract(If there is)Handle.

2007Years11Month1Day, Haifu company as the Party of the first part, Concordia companies signed the "Sino foreign joint venture Gansu stars Zinc Industry Co., Ltd. the contract as Party B" (hereinafter referred to as the "joint venture contract"), the relevant agreement: Star Company Kuogu capital registered capital increased to399.38Million dollars, Party A shall decide the part of the shares of the company, the stars change by foreign enterprises for Sino foreign joint ventures. In the part of the agreed to set up joint ventures, the parties to the venture by each of them or the amount of the registered capital of the joint venture conditions provide the joint venture company contribution payment shall bear liabilities of the joint venture company. The Party of the first part funded15.38Million, accounting for the registered capital3.85%;Party B's contribution384Million, accounting for the registered capital96.15%. Party A shall within ten days after the effective date of the contract within a one-time payment of RMB to the joint venture company2000Million, more than the contribution of registered capital of the joint venture company, the joint venture company in the capital accumulation fund. In sixty-eighth, article sixty-ninth of the profit distribution part of the joint venture company joint venture agreement: pay income tax and extraction of the fund after the profits in accordance with the law, to be allocated by the joint venture parties share. The joint venture company the last fiscal year before the remedy of losses may not distribute profits. The last fiscal year undistributed profits, may be included in the fiscal year profit distribution. Also provides for the dissolution and liquidation of joint venture, joint venture period. Also agreed: joint venture company completed after the change, should be established as soon as possible"Restructuring of listed companies working group"Restructuring of listed companies, started the preparatory arrangements for the preparatory work, the working group members by the representatives of shareholders and management personnel. The joint venture company shall, in the conditions established as Limited by Share Ltd reorganization, and strive for listing on stock exchanges in china. If to2010Years10Month20Day, due to the reasons for the joint venture company own cause cannot complete all the shares listed, then Party A shall have the right to request Party B to repurchase at any one time when party a holding of the joint venture company. The entry into force of the contract to the date of approval by the examination and approval authority. In the "Sino foreign joint venture Gansu stars Zinc Industry Co., Ltd. (hereinafter referred to as the" articles of association "articles of association") sixty-second, sixty-three and the "joint venture contract" sixty-eighth, sixty-ninth the same content. Later, Haifu company promised to2007Years11Month2Day star company bank account of RMB deposit2000Million yuan, the new registered capital114.7717Million yuan RMB, the capital fund1885.2283Million yuan.2008Years2Month29Day, the Commerce Department of Gansu province's foreign word Gan[2008]79Document "on the Gansu stars Zinc Industry Co. Ltd. capital and equity change approval" to increase and the change of ownership, and approved"Investment by both parties2007Years11Month1The agreement, signed a joint venture capital of the joint venture contract and articles of association with effect from today". Subsequently, the stars, the approval for the change of business registration accordingly.2009Years6Month, the star company approved by the Gansu Provincial Department of Commerce, to handle the name and business scope of the formalities for registration of the business sector, the name change is limited by the Gansu province nonferrous resources. According to the industrial and commercial registration records of inspection report, the star company2008The total annual production and operating profit26858.13Yuan, net profit26858.13Element.

2009Years12 Month,Haifu company appeal to the trial court, requesting an order: Heng company, DIA, Lu Bo to pay compensation to the agreement1998.2095Million and bear the litigation costs and other expenses.

The court thought,Under the terms of the plea opinions, the focus of the dispute to:1"Capital agreement," article seventh(Two)Content is legally binding;2"Capital agreement," article seventh(Two)Content if effective, Shiheng company, DIA, Lu Bo should bear the compensation responsibility.

The parties to the financing, investment and signed the "investment agreement", this case is due to fulfill the agreement in terms of the dispute, relates to the "capital agreement" clause of confirming the legal effect, therefore, the terms of the agreement shall not violate the provisions of "contract law" article fifty-second of the people's Republic of china. At the same time, the content of "capital agreement" clause relates to the joint venture company shall again, should accord with the "company law of the people's Republic of China" and "the people's Republic of China on Chinese foreign equity joint venture law" and other relevant laws, rules and regulations. After review, "capital agreement" is the true meaning, but article seventh(Two)Content that is eternal2008The actual net profit to finish3000Million yuan, Haifu company have the right to request the eternal company compensation agreement, does not meet the "Sino foreign joint venture law of the people's Republic of China" in article eighth of the net profit of enterprise distribution rules, the parties to the joint venture according to the proportion of registered capital and at the same time, the relevant provisions of the provisions are inconsistent with the "company charter", also to damage the interests of the company and the interests of the creditors of the company, do not meet the "company law of the people's Republic" in twentieth the first paragraph. Therefore, according to the "contract law" of the people's Republic of China fifty-second(Five)The provisions of item, the article by Shiheng company on the rich company undertakes the compensation responsibility agreement in violation of mandatory provisions of laws, administrative regulations, the contract is invalid, therefore, Haifu company according to the clause Shiheng company bear the compensation liability claims, the law can not support. Because the sea rich company Shiheng company undertakes the compensation responsibility agreement is invalid, therefore, Haifu company Shiheng company lost the premise of compensation responsibility. At the same time, "capital agreement" article seventh(Two)Item content and the "joint venture contract" agreed not consistent in content, according to the "Regulations of the people's Republic of China on Sino foreign joint venture enterprises in the second paragraph of" Tenth regulations, should be based on the "joint venture contract" content is accurate, the sea rich company Diya company bear the compensation liability basis, in accordance with the law shall not support. Although Lu Bo is the legal representative of company again, but on behalf of the company in the province is the behavior of corporate behavior and interests, and "capital agreement" article seventh(Two)Items, and not a personal commitment by Lu Bo compensation obligations, the sea rich company asked Lu Bo people bear the compensation liability for non contractual and legal basis, and should be rejected according to law. As for the land not in accordance with the commitments in the wave2007Years12Month31Days before the Sichuan Province Ebian County five Du Niu Gang lead-zinc ore transfer to Heng company name, relates to the default of Shiheng company and its shareholders, should not be the case the wave bear the compensation responsibility for.

To sum up, Haifu company file for the law can not support, defense Shiheng company, DIA, Lu Bo does not bear the compensation responsibility established. The Institute in accordance with the "contract law" of the people's Republic of China fifty-second(Five), "the people's Republic of China Company Law" article sixth paragraph second, the first paragraph of article twentieth, "the people's Republic of China on Chinese foreign equity joint venture law" the first paragraph of article second, paragraph second, third, "the people's Republic of China on Chinese foreign equity joint venture law implementing regulations" Tenth article second paragraph decision to dismiss the sea rich company all claims. The case acceptance fee155612.30Yuan, the property preservation fee5000Element, the court fee700Yuan, total161312.30Element, by the sea rich company.

The sea rich company refuses to accept the judgment of the first instance court, appealed to the present court said: first, a court finds that the facts are not clear.1"Capital agreement," article seventh(Two)Is for Shiheng companies can not complete the net profit target should bear what responsibility agreement, the agreement is related to enterprise net profit, but it is not the profit distribution of joint venture agreement, a court finds that the terms of the agreement on the profit distribution of the joint venture, which belongs to the fact that is not clear.2, "capital agreement" and the "articles of association", "joint venture contract" is not the same legal relationship before and after the formation of the file. "Capital agreement" is only the nominal "Capital increase agreement"In fact, the content is about the stars, to raise funds for a package agreement company share-holding system listed. Is not the "Sino Foreign Equity Joint Venture Law Implementing Regulations" means the joint venture agreement, from the body, "joint venture contract" is signed Haifu company and the Concordia company, "capital agreement" is signed by the Quartet, a trial of the "capital agreement" as the legal provisions of the joint venture agreement, and then think "capital agreement" and the "joint venture contract" incompatible belongs to the affirmation of the legal fact is not clear. Two, a court finds that the legal relationship between the error.1"Capital agreement," article seventh(Two)A contract is the true meaning of the four parties. In fact for four parties to raise funds on the shareholding system reform and listing of the files, not to increase a legal relationship established, including a series of legal relationship, but are pointing to the final goal listed company, is in addition to the capital, the investment behavior of the appellant's appointment and safeguard clause, without prejudice to the appellee's rights and interests.2"Capital agreement," article seventh(Two)An agreement in accordance with the principle of equivalence paid contract law, there is no imbalance of rights and obligations, unfair situation. The appellant to pay20Times the equity premium to the eternal company investment, this investment model itself is different from common equity capital, which is embodied in a high-risk investment, the ultimate goal is the growth of the appellant as the original shareholders of shares after the listing of the appellant and benefit.3, so-called guarantee clause, generally refers to the investment results both financing business loss and profit, have the right to recover the investment and receive a fixed profit clause. In the case of capital "and" agreement article seventh(Two)The legal concept and control puttable clause, "capital agreement" seventh of the special agreement not in judicial practice"The minimum guarantee clause". Three, the first trial law obviously wrong.1A trial, citing "Sino foreign equity joint venture law" eighth clause sentence, which belongs to the erroneous application of the law. "Capital agreement" article seventh(Two)An agreement, not about"Capital increase"Agreed, but about"Premium"Failed to invest in accordance with the use of specific agreed by company cannot complete enterprise performance objectives listed earlier and should bear the Liability Convention, "company law" does not prohibit companies could not to the company investment shareholders liability clause, so the "capital agreement" article seventh(Two)An agreement is valid. To sum up, Haifu company requested the court of second instance:1, to withdraw the first instance judgment, support the claim; 2In this case, a second trial, litigation costs, costs of preservation, mailing fees and other related expenses shall be borne by the appellee.

Shiheng company, DIA, Lu Bo said in reply:1First instance verdict, "capital agreement" article seventh (two) of the content is invalid, comply with the "contract law" article fifty-second, the applicable law is correct. "Capital agreement" article seventh (two) of the content, in violation of the "company law" the twentieth the first mandatory norms, Haifu company belongs to the abuse of shareholder status, set the debt for the company, damage the legitimate rights and interests of the company and a violation of the terms of the sun, "Chinese foreign equity joint venture law" and "Regulations for the implementation of" a the distribution of profits of joint venture company is mandatory, not sharing any business risk, fixed access to huge profits, obviously belong to"The minimum guarantee clause", in the form of legal cover up illegal purpose, therefore, shall be confirmed as invalid. The "capital agreement" although effective, approved by the Gansu Provincial Department of Commerce for review but, in accordance with the provisions of the Supreme People's court "on Several Issues concerning the trial of enterprise with foreign investment disputes" (a) the provisions of article third, the court of first instance can be confirmed as invalid, is not affected by the examination and approval authority for approval.2"Capital agreement," article seventh (two) actual has ceased to exist, Haifu company according to appellee rights advocate, Department of abuse of the right to appeal, the appeal could not be established. "Capital agreement" signed, Haifu company and the Concordia company entered into a "joint venture contract" and "articles of association", and approved by the Gansu Provincial Department of Commerce, Shiheng company by the Concordia company owned company is converted into a company limited joint ventures. Both sides in accordance with the "law of Chinese foreign equity joint ventures" and "implementation rules", in the "joint venture contract" and "articles of association", expressly agreed to the profits of the joint venture according to the proportion of contribution allocation, an annual losses not compensated shall not distribute profits. Haifu company and the Concordia company formed a joint venture law relationship, "capital agreement" article seventh (two) of the Convention has been changed, replaced by "joint venture contract" and "articles of association" the relevant agreement, both sides should be according to the law, manage the risk sharing, Haifu company to "capital agreement the book" article seventh (two) required profit compensation no basis. "Sino foreign equity joint venture law regulations for the implementation of the provisions of the second paragraph:" tenth of the joint venture agreement and the joint venture contract conflict, to the joint venture contract shall prevail. "Capital agreement" article seventh (two) of the content and the "joint venture contract", "articles of association" the obvious substantive conflict and conflict, "capital agreement" of article seventh (two) of the parties have not legally binding. Haifu company claim rights, apparently had no basis.3The company advocates, Fu Hai Lu Bo shall bear joint and several liability without any basis. Lu Bo in accordance with the "joint venture contract" and "articles of association" provisions of the legal representative of the company, to perform duties, belonging to the company duty behavior. Moreover, "capital agreement", "joint venture contract" or "articles of association" are not as Lu Bo individuals in the establishment of rights and obligations. Therefore, Haifu company Lu Bo person shall bear joint and several liability without contracts and the legal basis. To sum up, Haifu company appeal can not be established, the request of the second instance court dismissed the appeal, upheld the.

The court affirmed the trial court found the facts.

This house believes that: according to the judicial interpretation of the Supreme People's court, Hong Kong civil disputes refer to foreign procedure for trial, the Hong Kong related contract may choose the applicable law for resolution of a contractual dispute, but in this case the parties in dispute before or after all did not make a choice, because this should be based on the most closely linked to the principle of determining the case should be applicable law. Because the case involved "capital agreement" signed, performing in the mainland, according to the above principle, the case should be based on the laws of people's Republic of China as the applicable law disputes.

According to the pleadings and cross examination that opinion, the focus of dispute in this case as a "capital agreement" article seventh(Two)Whether have the force of law. In this case, Haifu company and company, Ltd., Shiheng Concordia Lu Bo Quartet signed an agreement is named "investment agreement", but all the content in the agreement, Haifu company paid2000Million to not only enjoy eternal company3.85%Equity (gauge15.38Million dollars, equivalent to RMB114.771Million yuan), expected Shiheng company after shareholding reform and after the successful listing, access to value-added equity value is the core objective of concluding the agreement and investment. Based on the investment objective, Haifu company and other four parties in the "capital agreement" article seventh(Two)Job performance targets were agreed, i.e."Shiheng company2008The annual net profit of not less than3000Million yuan. If the sun company2008The actual net profit to finish3000Million yuan, Haifu company have the right to request the eternal company compensated, if the compensation obligation fails to fulfill his eternal company, Hai Fu company has the right to require the company to fulfill the obligation of compensation concordia. The amount of compensation= (1-2008The actual net profit /3000Million yuan) *The amount of investment". For the four parties is eternal2008The annual net profit of not less than3000Million yuan of the agreement, the agreement is only the request on the profitability of the target enterprise, did not involve specific allocation matters; and agreed profit as the company and its shareholders, Shiheng can according to the "company law of the people's Republic", "joint venture contract", "in its articles of Association" and other related provisions for the respective income, but also helps to realize the interests of the creditors, so it does not violate the law. While the four parties is eternal2008The actual net profit to finish3000Million yuan, Haifu company have the right to request the eternal company and Diya company compensated in a certain way to agreement, the violation of investment risk sharing principle, the sea rich how companies as investors regardless of Shiheng business performance, can get agreed income and does not assume any risk. According to "the Supreme People's court<Some issues concerning joint contract dispute case to answer "fourth on second"An enterprise as a legal person, as a joint undertaking of a corporate direction venture investment, but not to participate in the joint operation, do not assume joint responsibility for the risk, regardless of profit and loss are also able to recover, or can receive a fixed profit, is that of the joint venture, is borrowing, in violation of the relevant financial regulations, the contract should be recognized invalid"The capital increase agreement "provisions," article seventh(Two)A part of the agreement content, for violation of "contract law" of the people's Republic of China article fifty-second (five) Xiang Zhi shall be invalid. In addition to have been included in the registered capital of the company Haifu company Shiheng114.771Million yuan, the rest1885.2283Million yuan property should be called investment, actually lending. Although the promise of eternal company and the Concordia company also is invalid, but the sea rich company based on reasonable reliance on its promise and contracting, dead hang, Diya company should bear the primary responsibility for the legal consequence of invalid. According to the "contract law" provisions of the people's Republic of China in fifty-eighth, Sun company and dia should return Haifu company1885.2283Million and occupy the period of interest, because the sea rich company also has certain mistake for the legal consequence of invalid, such as by the bank loan interest payments, interest rate cannot reflect its should bear fault liability, even now, constant company and dia should according to the bank deposit rate of interest paid.

Because land wave person did not "capital agreement" article seventh(Two)Study the compensation to Haifu company made a commitment, and whether to2007Years12Month31Days before the Sichuan Province Ebian County five Du Niu Gang lead-zinc ore transfer to Heng company name and the case does not belong to the same legal relationship, therefore, Haifu company asked Lu Bo bear the compensation liability for no factual and legal basis, the court shall not support.

About eternal company, DIA, Lu Bo said in reply, "capital agreement" has been followed by the sea rich company signed with Diya company "joint venture contract" instead of "capital agreement," article seventh (two) of the parties have not legally binding claims. Because of "capital agreement" and the "joint venture contract the parties agreed" different, respective rights and obligations are not uniform, and the2008Years2Month29Day, Gan's foreign words in the Gansu Provincial Department of Commerce[2008]79"A number of Gansu stars Zinc Industry Co. Ltd. capital and equity change approval" in second specifically stated"The parties to the investment2001Years11Month1The agreement, signed a joint venture capital of the joint venture contract and articles of association with effect from today". The main court did not support the defense.

To sum up, the judgment of the first instance found some facts are not clear, lead to improper application of the law, should be corrected. In accordance with the "PRC Civil Procedure Law" article 153rd (two), article (three), the provisions of article 158th, the decision as follows:

One, the revocation of Lanzhou City Intermediate People's Court (2010Blue Famin three) at the beginning of the word no.71Number of civil judgements;

Two, the Gansu Province Nonferrous Metal Recycling Co. Ltd., Hongkong Concordia Co. Ltd. in the sentence after the entry into force30Days to return Suzhou Industrial Park Fu Investment Company Limited1885.2283Million yuan and interest (self2007Years11Month3To pay the date according to the people's Bank of Chinese bank deposit interest rate calculation date).

If not according to the period specified in the judgment to the payment of money obligations, should be in accordance with the "Regulations of PRC Civil Procedure Law" article 229th, double payment of interest on debt during the delay in performance.

A trial of the case acceptance fee155612.30Yuan, the property preservation fee5000Element, the court fee700Yuan, the second instance the case acceptance fee155612.30Yuan, total316924.60Yuan, Gansu province nonferrous resources by using limited burden200000Yuan, Suzhou Industrial Park, sea rich investment limited burden116924.60Element.

This judgment is the final judgment.

On the tax regulation of VAM

      The Gansu High Court on the gambling agreement (see Annex) dispute made the first judicial decision, the decision can be referred to in the facts and basis for the first reason, the judgment about the legal nature of VAM analysis deeply, the verdict also reflects the judge their interests carefully consideration, has certain positive significance for our understanding of this investment phenomenon. The author thinks that the analysis of the facts of the judgment simplistic tendency, leading to its conclusion simple.

      An agreement on the gambling analysis, financial

      The agreement on gambling is the over-the-counter (OCT) financial instruments

      The agreement on gambling is essentially protective option investment strategy (protective option stratedgy) is a form of practice. Bilateral investment relationship is actually a portfolio investment: equity investment plus options. We first restore the basic fact. The investment capital, which belongs to the equity investment. The agreement is not performing up to a certain value, the investment is entitled to receive a certain degree of compensation. Performance is the main factor affecting the price, performance is not up to a certain extent, indirectly said the share price is not a number. So, this agreement is essentially granting investors a similar option rights. This right is different from the general options, difference is generally put option holder to get compensation amount is increased linearly, and investors agreed protocol for compensation rights, is a fixed value. Holding the sell side, the put option for compensation. The agreement performance reaches a certain value, the investor shall reward management. This arrangement is similar to the call option agreement, the investor is a short holders, management to accept the reward for long holding party. Investment income curve of this portfolio, interested readers can refer to the income curve CPA textbook protective put options portfolio.

      Two, the Gansu agreement on gambling case law review

      1, Gansu court verdict on the PE investment "gambling on the agreement validity" (hereinafter referred to as the Gansu judgment) that investment and investment agreement to damage the interests of creditors right judgment, but not completely adhere to the correct identification analysis. The Gansu high court rulings to gambling on the agreement content damage by the invested enterprise the interests of creditors, the part that agreement content and equity investment relationship conflict, but denies gambling on the agreement. Analysis of the high court of Gansu is right, I agree with the analysis, but the Gansu Supreme Court decision holding different views. The Gansu high court judgment confirming the investment in equity as part of the equity investment, and included in capital surplus part for creditor's rights investment. That what is the basis? Investment by gambling on the option agreement is obtained in the lock, the lowest income investment, put option protection of all investment, rather than solely on included in capital surplus part of the investment to protect. The distinction between Gansu investment, equity investment and debt investment are confirmed, why, does not explain the judgment. The author thinks, the investor and the enterprise invested by gambling on the agreement, to be invested enterprises property guarantee invested enterprises in the performance of irregular can obtain minimum return index, this Convention does impair the interests of creditors. The agreement on gambling this part of the creditors agreed should be recognized as invalid clause, but to bet on the other part of the agreement shall be deemed to be valid.  

      Gansu judgment simple will investment portfolio facts for debt investment, its error by legal risk analysis obviously. Investors after the capital increase, if the increase of earthquakes, fires and other accidents, enterprise liquidation, investors assume the risk is what? Let the investor only included in the equity investment to bear risk, creditors can agree? The court can support? The answer obviously, investing in risk on the gambling agreement shall bear the rights and interests of investors, the risk investment is the total investment, and not just in the equity investment. According to this analysis, the court found that a portfolio investment is the creditor's rights investment, from the legal risk analysis is no sense. The error is essential for both a serious distortion of investment relations, the lack of options that derivative financial tools to understand by.
      
      Gansu judgment will investment portfolio facts for debt investment, the error can be proved by reductio ad absurdum. Assuming another case other facts and Gansu high court cases are the same, but the investment results are invested enterprise performance to meet the standard, the investor is a bet against the winner, so, investors can take Gansu Gaoyuan that investment relations for the creditor's rights investment reasons, that included in capital surplus is part of the nature of creditor's rights investment, asked the investment return of the investment in the capital reserve, the Gansu high court will this request that the investor? If the court support, then the investment side of the rights and interests of the owners, with only a small part in the equity investment will enjoy all the investment should enjoy the. The Gansu high court this finding is the lack of the necessary knowledge of the capital reserve. For example, A, B jointly invested 1000000 yuan to set up a business, investment property has a piece of land, a year later, C shares, accounting for 50% of equity. C shares, company owner's equity is 1000000 yuan, but the enterprise because of the land value-added, enterprise net assets of the assessed value of 2000000 yuan, that is to say, did not the equity premium in show business. In this case, C takes a 50% stake in C enterprises, only 2000000 yuan investment, A and B will be recognized, included in the paid in capital of 1000000 yuan, 1000000 yuan in the capital reserve. If the C is only 1000000 yuan of funds to enterprises accounted for a 50% stake in A and B, will be recognized? Unless A and B are fools recognition. The Gansu high court agreement on gambling case only will be included in the investment capital as equity investment, absurd mistakes with the example of the run in the same groove.

      The Gansu case, the gambling on the agreement has been approved by the relevant government departments, so, the court can not take the derivative product transactions not legitimate grounds for denial.

      Through the above analysis, the author thinks, the Gansu case committed effective gambling on the agreement of the equity investment, gambling on the agreement is invalid. But if the option is not a party to the investee enterprise but management or other shareholders, how to identify? The author thinks that in our country there are clear provisions on the OTC financial tools before, gambling on the equity investment and Option Agreement shall be effective in.

      (three) the agreement on gambling why prevailed in china. Option market perfect abroad, the lag of our financial innovation, which is not commensurate with its status as the second largest economy. Because there is no option market, the option portfolio investment strategy of a protection abroad popular in our country can not be normal development, investment institutions have to pass the agreement on gambling the over-the-counter trading of financial instruments in a portfolio of business.

     (four) the agreement on gambling is gambling or gambling. Lottery winning through sheer luck or chance, while both luck gambling on the agreement or on both sides, there are both parties based on their own to business management knowledge, industry experience to judge the composition, so, to judge from the perspective of the knowledge and the skill, the agreement on gambling should be different from gambling or gambling. Derivatives regulation in foreign general into the financial industry, has nothing to do with the gaming industry.

     (five) the legitimacy of the OTC financial instruments. The problem in China seems to have no clear, Gansu high court, to avoid the problem. India law does not allow derivatives transactions. Derivatives on the economic development There are both advantages and disadvantages., but I'm sure, it increases the risk of economic operation, economic crises in 2008 related to derivative financial product popular. 08 years of economic crisis, countries have strengthened supervision of derivative products and structure of the product but to option transactions involved in gambling on the agreement of our legitimate or not is really a must come before the tax treatment of the premise issues. If similar to betting options trading agreement protocol in our country can not be free, then, trade and its economic results are not protected by the law, the corresponding tax deal discussions are meaningless. In order to further discussion, we assume that option transactions involving VAM can legally freely in china.

        The Gansu case is investment enterprise as gambling on the option agreement in the short side, damage the interests of creditors to be invested enterprises, should be recognized as illegal. Continue to have no significance to the Gansu high court cases of this type of tax analysis of agreement on gambling. The following discussion is aimed at another agreement on gambling type, management or major shareholders agreement on gambling option short side of the agreement on gambling, the following discussion for this type of.

      Three, tax law, the agreement on gambling

      Our tax laws and the legal system in either the equity investment for investment awareness is limited, or the creditor's rights investment. As the result of financial innovation, options have changed the traditional ideas, some portfolio from the perspective of risk and return cannot be simply regarded as equity investment or equity investment. Can say, the financial situation, our country's legal system and the tax law theory have failed to keep pace with the times, a thorough study, and make effective regulation.

      (a) associated with financial instruments tax theory     

      Determine the taxable income is the income tax base. Time the choice, the nature and origin of the principle is the key to the income tax applicable. Income is the nature of the income is ordinary income or capital gains, this problem is an important problem in Britain and Australia and other common law countries, these countries by the common law, the score of ordinary income and capital gains. Our tax without this classification, so the discussion of no significance. Source of income jurisdiction and home, an investment income in the country or regional so, this question whether foreign or our country is an important issue to be considered. Considering that the focus of this paper, this paper focuses on the time selection rule.

     A basic principle of income tax is an income (or cost) when measured from the tax. Due to the time value of money, present value of future tax liability when the value is less than the same income in the current year, together with other factors such as changes in tax rates, most taxpayers like income accounted for time delay. The general method of Taxation time financial tools selection is derived from the fixed returns, financial instruments (such as bonds) annual taxable income; derived from or return financial instruments (such as stock) according to "wait and see" (wait and see) principle of taxation.

     For most financial instruments, confirm their income according to "wait and see" principle, therefore, the signing of the contract is not immediately generate income tax results. In contrast, the taxpayer in a revenue "realize" will be included in the income. For example, the taxpayer owned stock prices rose, from the economic point of view, the taxpayer's stock had income, but before the stock is taxable event, the taxpayer is not received from the stock price rise the taxable income. The taxable event if the taxpayer sells the stock.

     (two) the basic derivatives Taxation

     The tax treatment of different investment economic equivalent should be the same, this is a basic requirement of the principle of tax fairness and social resource allocation efficiency principle of tax law.

   Emergence of call options and put period parity principle, theoretically, the use of derivatives can replicate the basic assets to any form of cash return. Investors can build the basic assets and derivatives portfolio, in order to achieve the required return risk attributes and attribute combinations. However, the economic equivalent of different treatment of investment in the tax may be different. The difference between different portfolio economic equivalent of the tax treatment to allow taxpayers to some extent, the choice of timing of recognition, and the nature of the source.

      For example, consider two different portfolio tax below economic equivalent processing. The portfolio of A include: (1) to buy stock S; (2) to sell S to perform for the price of K will rise C underlying assets, purchased; (3) with S as the underlying asset, the execution price of put option K. Portfolio B for the purchase of zero coupon bonds, the bond portfolio A options expiration date shall pay an amount equal to K. Hypothesis, S prices rose at maturity. Investors to sell S, with each other the request fulfillment the call option payment obligations, the option expires. The two portfolio value at the expiration date is the same. However, two different tax treatment of investment portfolio:

     Portfolio A taxpayers gain or loss can change value of delayed transfer of shares and options. Properties from the combination of income to capital income.

      Portfolio B require taxpayers will be zero coupon bonds in accordance with the annual discount rate of interest included in income, interest income has not been deferred taxation. Property from the portfolio as ordinary income.

      The above two investment portfolio is equivalent in terms of economy, tax return is the same. However, if two different tax treatment of investment portfolio, will lead to different tax returns, investors will change their form of investment, to use the different tax treatment, which will affect the efficiency of resource allocation, because they do not lead to additional tax return. Different tax treatment of economic equivalent, will also affect the horizontal equity and vertical equity of taxation.

   (three) the agreement on gambling tax regulation framework

   In the above example portfolio A is gambling on the agreement of investment. On the tax return, portfolio is identical to the B and the agreement on gambling, but if you consider the after tax return, the investor will choose, the reality of VAM in our extensive use, investors to take practical action to answer.

     The tax treatment of VAM results should invest zero coupon bonds and economic equivalent, only in this way, it conforms to the principle of fair tax, does not affect the resource allocation efficiency of social resources.

   (four) the specific problem gambling tax treatment protocol

     The agreement on gambling as a structured financial products, the tax regulation framework principles have already been discussed, but the specific rules for tax treatment and many problems need to be studied and solved. The exposed concrete rules of gambling on the agreement when the problem is not just making the agreement on gambling tax specific rules need to face, that the problem is China's financial product tax rules need to be considered and the face of the problem. These problems are: the agreement on gambling by a financial arrangement or by the number of financial arrangements for taxation; tax point from the agreement on gambling income, property, and source selection.

      1, VAM is according to the whole as a financial arrangement of Taxation, or open by the number of financial arrangement of Taxation, namely according to the equity investment and option taxation. If a financial arrangement of Taxation, then, from the agreement on gambling income equity income or debt income?

     America tax for derivatives or structured products tax theory frame method for classification. USA tax will invest classified in several categories, and then for each category, set the specific application of law rules respectively. Derivative products are widely used in nearly two years, USA this set of rules has received the unprecedented challenge. The principle of freedom of contract the parties have the opportunity to according to their own situation to create for their risk orientation and return the financial product, the customized financial products into the tax law design established categories, is a very difficult work, because there are some new financial products is the existing tax categories developed for the purpose of tax, the categories are unable to cover its characteristic, its fall into that category are not the right place.

     The author thinks that, since the agreement on gambling in the law is a bundle or package, the financial risk and return, it also has unique characteristics, according to a reasonable tax is also sufficient financial arrangements. Gansu high court case, equity investment and option contracts between the parties is the same, but we are not the same for below to the gambling agreement period, if a binding contract contains the financial tools as Fang Bu, according to a financial arrangement that is appropriate? The author believes that, despite the agreement on gambling investing equity investment and long put option are related, but because the equity investment relationship with option contracts between the parties do not overlap, the agreement on gambling in tax laws can according to different financial arrangements. The management as the option seller, its relationship with investors like insurance relationship.

     2, from the nature of VAM option income

      No special treatment of income tax on equity investment agreement with general equity investment, without discussion significance. Then, from the agreement on gambling option should be obtained according to the income tax? Income from the theory can be divided into business income and capital gains. China's income tax personal income tax and corporate income tax personal income tax will be divided, the score is 11, income or capital gains no business enterprise income tax, or ordinary income and capital gains divided. Hypothesis and investors to bet is invested enterprise shareholder, the shareholder and company, if lost, large shareholders to pay compensation claims should be deducted before tax? The author thinks, should be tax deductible. Investors get the compensation should also be included in the taxable income. The business correspondence is gambling on the put option in the protocol exercise, can also be regarded as major shareholders to provide similar to insurance business to investors. Participation of shareholders. If an individual, it gets complicated. If allowed to investors will be the compensation in the case, should also allow natural's shareholders will compensation payments abutting the taxable income, it should be supporting the taxable income? Interest income and dividend income?

   3, the source from the agreement on gambling income

     Conclusion: the agreement on gambling is not limited to two types of the column in practice, because of my ability to see and the collected data is limited, can not do everything. The author of this research and awareness of the problem there must be many immature place, some viewpoints may not stand up to scrutiny. Academic without authority, welcome challenge, criticism and is perfect.

Accessories: Gansu court verdict on the PE investment "gambling on the agreement" effectiveness
Http://bbs.esnai.com/thread-4804199-1-1.html

To be continued.

The case discussed below:

Discussion: the results between several shareholder or investor assurance (compensation) clause + repurchase clause (repurchase plus interest property income), in the eyes of the judges: completely is no risk investment in associates, against the risks of common profit basic spirit, it is easy to be recognized as invalid. Gansu province high court judgment is the judgment, although the sea rich investment for the court retrial, in the Supreme Court to retrial, the results can not be changed, but Chinese not the case law, the court may make other provinces still is not conducive to PE investors judgment. At this stage, should change a train of thought in the investment:
1, the performance guarantee and Target Corp Target Corp chairman general manager signed (somewhat similar contract), then the original shareholders to make a guarantee -- between partition several shareholders or investors performance guarantee.
2, buy back clause reserving, but no additional similar interest income, but through the performance guarantee of net assets to reflect to the Target Corp to increase, so that the transfer of shares repurchase shares when the price is higher than the price.
Discussion about PE two: invalid on the terms and conditions, the paper pointed out: "this case has its own particularities. Gambling on the agreement, if Gansu shihengda not agree to indemnity by profits, Gansu province. By the investment company to lose money, it is more likely to be seen as' guarantee clause ', this being caught. For gambling, repurchase should make large shareholders to bear, it is not illegal, some listing Corporation before restructuring, will promise profit; if not up to the profit loss shares to small shareholders, this practice is legal support. But it is not guaranteed money, just for shares." He said, this case reminds everybody, after treatment of gambling terms, we should pay attention to avoid similar vulnerabilities.

Discussion: three Gansu province to the gambling clause was invalid, is almost a foregone conclusion. It is understood, it is China's first gambling on the disallowed judicial precedent.
China is not the case law system, but if the Supreme Court declared invalid on gambling, it is equal to the judicial practice shows that: the law does not support "of gambling clause".
A lot of attention......
The accounting has been performed over how to deal with? Be bound by law?
Discussion four:

1,The second decision replenishment agreement effectively, but article seventh(Two)Earlier, after the effective provision invalid.

2,The second decision replenishment agreement article seventh(Two)Clause a valid reason is: Haifu company four parties in "capital agreement" article seventh(Two)Job performance targets were agreed, i.e."Shiheng company2008The annual net profit of not less than3000Million yuan.For the four parties is eternal2008The annual net profit of not less than3000Million yuan of agreement,The agreement is only required on the profitability of the target enterprise, did not involve specific allocation matters; and agreed profit as the company and its shareholders, Shiheng can according to the "company law of the people's Republic", "joint venture contract", "articles of association" and other relevant provisions for the respective benefit, also help in the interests of the creditors, so it does not violate the law.

Put forward the request to the profitability of the company, by the company target profit, shall not violate the law.

3,The second decision replenishment agreement article seventh(Two)Invalid section provision after reason is the key decision in this case: four parties is eternal2008The actual net profit to finish3000Million yuan, Haifu company have the right to request the eternal company and Diya company compensated in a certain way agreement,The violation of investment risk sharing principle, the sea rich how companies as investors regardless of Shiheng business performance, can get agreed income and does not assume any risk.The "capital agreement" article seventh(Two)A part of the agreement content, for violation of "contract law" of the people's Republic of China article fifty-second (five) Xiang Zhi shall be invalid.

Claim for compensation, but compensation approach is cash compensation to their own investment companies,For gambling, repurchase should make large shareholders to bear, or make the management of the company to undertake, whether the violation? ,

4,What is the agreement on gambling?The agreement on gambling, also known as the valuation adjustment mechanism, refers to a kind of financing both sides agreed to the uncertain future of. The agreement on gambling has both the incentive financing to achieve profit targets, advantages and reduce investment risk of information asymmetry, is widely used in the PE investment. Both sides of financing of future earnings expectations, will reach an agreement on gambling. But the market risk difficult to predict, the original expectations if you can not be achieved, the dispute is inevitable. Once the lawsuit, the effectiveness of VAM tend to be the first to bear the brunt, become the focus of the dispute.

5,PEInvestment, common agreement on gambling more agreed performance standards when financing party exercise, performance did not meet the investment party exercise. But the performance did not meet the agreed compensation clause only when investors exercise, but not agreed performance targets financing parties exercise seems to protect investor interests, unilateral, and violate the fair. Therefore, the court of second instance that the compensation provisions of risk sharing principle.

6,Another perspective: case involving compensation clause is a form of gambling on the agreement. This clause is not agreed financing parties exercise, because the investor to up to 20 times the premium investment, equivalent to the financing party has pre exercise of rights. Such as the financing party performance standards, investing high premium in exchange for equity investment only a few, the vast majority of premium is transferred to the financing parties. Such as the financing party performance did not meet, compensation is equivalent to re approved investment investment, did not increase the risk of financing. Compensation clause does not protect investors interests have been pre meet opposite unilaterally, the financing party interests, so it is difficult to determine violate the principle of risk bearing. Unfortunately, the second instance court adopted a trial point of view, the agreement is signed identityHaifu company expected Shiheng company after shareholding reform and after the successful listing, access to value-added equity value is the core objective of concluding the agreement and investment.

I consent to the court's view, the agreement content, Haifu company although high premium contribution, seemingly costly, but agreed Shiheng company profits if not compliance, the future is not listed, or compensation, or repurchase of shares. Not embody any risk, this is not the connotation of gambling, lost the lawsuit is not accidental.

7,Case involving compensation clause is effective or not, is not in violation of risk sharing principles, but that the shareholder and the company to bet against the company and the creditors' interests are. Compensation is not the shareholders agreed to bet, but the dual responsibilities of company and shareholder. The contract failed to take into account the provisions of China Company law, a major flaw. Compensation clause suspected companies to shareholder return of investment, the company and creditors interests, is very likely to be invalid.

Thoughts on the present case,The agreement on gambling is effective or not, there is no law in china,On the gambling agreement can be signedTaking into account the provisions of the China Company act,The signing of this contract, if the agreement is subject to the equity transfer pricing? Agreed to business performance after the reward of eternal and dia? High premium in how to bring high returns? Also, the true meaning of reflection, but display basic principles of equity, against the investment field, signed a similar contract should give full play to the role of legal advisers and lawyers.