On the evening of March 12, Hong Kong media reported that Zhang Lan, the mother-in-law of Taiwanese entertainer S, the founder of the famous catering group South Beauty, triggered a lawsuit when she sold her stake in South Beauty. She was banned by the Hong Kong High Court in 2015 and her assets were frozen. However, because she did not comply with the courts order, she constituted contempt of the court and the court ordered Zhang Lan to be imprisoned for one year. But then Zhang Lans son Wang Xiaofei issued a lawyers statement saying that Zhang Lan had appealed the case to the Appeals Court of the Hong Kong High Court last year, and the case is still awaiting the courts scheduled hearing, and no final decision has yet been reached.
China Times reporters found that the lawsuit was simple, but behind it was a takeover dispute between South Beauty and European private equity fund CVCCapital (hereinafter referred to as CVC) when it sought listing in Hong Kong in 2013. This is a cooperation that you would like to cooperate with me, but in the end, not only failed to go public, but also went to court. So far, both sides have withdrawn from the shareholder list of South Beauty. With their exits, South Beauty is no longer Hermes in the catering industry.
Constituting contempt of court
The plaintiff LADOLCEVITAFINEDININGCOMPANYLIMITED of the case is a company controlled by CVC, and the defendant Zhang Lan.
According to Hong Kong media reports, the High Court of Hong Kong issued a prohibition order on February 26, 2015. Zhang Lan must disclose to the plaintiff all assets with a net value of more than HK$500,000 both inside and outside Hong Kong. The verdict revealed that in the lawsuit, the plaintiff claimed $280 million from Zhang Lan, who only declared about $1.28 million in assets. In an interview with Christies, an auction house, Zhang Lan mentioned that she had a large collection of valuable works of art that did not appear in her declared assets.
The verdict pointed out that Zhang Lan did not attend the trial on that day, and her lawyer represented her in court, but the lawyer did not make any plea for it. The judge pointed out that although the court asked Zhang Lan to attend the sentencing hearing, she ignored it and did not apologize for violating the court order, showing that she had no regrets. In addition, Zhang Lan chose not to make a declaration even though he had many opportunities to remedy it. It was a deliberate and planned violation of court orders and a serious act. On March 14 last year, the court needed to ensure that its order was not ignored. It ruled that Zhang Lan violated the court order and constituted contempt of the court, and ordered Zhang Lan to be imprisoned for one year.
No final verdict has yet been reached.
After media exposure and fermentation, Wang Xiaofei issued a statement by Zhang Lans lawyer on his certified microblog saying that the Court of First Instance ruled on March 14, 2018 against the false charges of CVC, rejecting four false charges of CVC and retaining only one. In response to the ruling of the Court of Appeal of the Hong Kong High Court, Zhang Lan appealed to the Court of Appeal of the Hong Kong High Court on April 11, 2018. At present, the case is still waiting for the courts scheduled hearing, the Appeals Court has not yet made a final decision on the case.
The statement also stressed that at present, there are many false information in the reports published by the media, which has seriously damaged Ms. Zhang Lans reputation. Ms. Zhang Lan reserves the right to pursue the legal responsibility of the relevant personnel against the false reports.
Later, Zhang Lans friends circle messages were also exposed, screenshots show that she released several messages in a short time. I started from scratch and made the best B brand in China, South Beauty, which pays hundreds of millions of taxes every year. I trained more than 200,000 excellent employees for the industry and made important contributions to the industry. These rotten media are also kept by us taxpayers. We can only say one thing: You are not far away from bad rewards... I want to ask you bastards, what contribution Wang Badan has made to the development of our country! What have you done for the happy life of the Chinese people? And Zhang Lan is different: I pay billions of taxes for the country, solve hundreds of thousands of jobs, and promote industry progress. It has been recognized by the state and the people... However, you are ashamed of the nation and make rumors every day, so that entrepreneurs who really make great contributions to the people for the country are treated unfairly. But you do not know, we are not little girls, we are the real conscientious entrepreneurs! Still will continue to work hard, continue to win glory for the country!! ___________
The lawsuit arose from Zhang Lans sale of South Beauty shares to CVCCapital, a European private equity fund, in 2014. Zhang Lan has previously publicly stated why equity disputes should be arbitrated in Hong Kong without resorting to legal means, because it was stipulated in the original transaction agreement with CVC that non-mainland arbitrators should be selected in case of relevant disputes. One of Zhang Lans messages in the circle of friends is that the Hong Kong Court is a cooperative body with foreign funds.
South Beauty is a Sichuan cuisine brand founded by Zhang Lan in Beijing in 2000. It took only 10 years to become the top catering industry in China. At one time, it had 20 Direct stores and hundreds of stores, which were in the limelight. The success of South Beauty has made Zhang Lan profitable and become a leading figure in the fashion catering industry.
Zhang Lan once had two opportunities to list in South Beauty.
When the financial crisis broke out in 2008, Quanjude, Little Sheep and other catering enterprises flocked to the market, and South Beauty began to quietly plan a listing trip. Three years later, South Beauty submitted its listing application to the SFC. Zhang Lan said that this is to let the entrepreneurs who have followed her for more than ten years have a due return. But for some reason, South Beauty is on the list of termination of IPO applications disclosed by the Securities Regulatory Commission.
After discounting A shares, Zhang Lan sought to list in Hong Kong. Despite the loss of A shares, the abundant cash flow in South Beauty still attracts a lot of capital. After the news that South Beauty will be listed in Hong Kong, international capital flocked to it.
In June 2013, South Beauty went public on the Hong Kong Stock Exchange. It has not yet decided which olive branch to take over. At this time, the CVC news moved, unilaterally announced that South Beauty has been acquired by it. As soon as the news came out, investors who had intended to cooperate had chosen to withdraw, and Zhang Lans dream of listing was realized only by CVC.
In August of that year, CVC signed an acquisition agreement with South Beauty. If the acquisition is completed, CVC will hold 82.7% of South Beauty, employee 3.5%, Zhang Lan 13.8% in the name of Shenglan Holdings, and remain chairman of the board.
Check evidence of both parties at court
The acquisition did not go smoothly. According to the agreement signed by the two sides, CVC was supposed to pay for delivery within a month, but by the end of 2014, Zhang Lan said he had received only over $100 million. In the meantime, a series of pulls also caused contradictions between the two sides.
In the Spring Festival of 2014, Zhang Lan received a letter from a lawyer and was banned from entering the company. At the shareholdersmeeting in 2014, Zhang Lan was not invited to attend. The contradiction between Zhang Lan and CVC is so fierce that she finds out that her stake in South Beauty has been fully pledged in the covert framework designed by the other party for the acquisition.
When the contradiction is most intense, the two sides even go to great lengths to fight. On the 7th night of January, 2015, in the 16th floor of Beauty South Office of Beijing Guanhu International No. 1, CVC management, lawyers and Zhang Lan had a positive conflict and push, and the police of Yaojiayuan District came forward to settle the fight temporarily.
Later, the listing plan of South Beauty was broken down twice, and the two sides also brought the equity issue in the acquisition to court. The above lawsuit is one of them and is still in progress.
Tian Eye Check shows that in March 2015, Wang Xiaofei withdrew from South Beauty; last August, Zhang Lan also completely withdrew from South Beauty. At present, Zhang Lans mother and son have nothing to do with South Beauty. The era when they and South Beauty labeled each other has quietly passed. During this period, South Beauty changed hands several times, and its performance continued to decline. The inside story of the black kitchen was exposed by the media. Last year, there was also the negative effect of employee recovery of social security.
South Beauty, which used to be Hermes in the catering industry, has now officially entered the contingent of box lunches. Although only 26 yuan per share, but still can not harvest the enthusiasm of the past. The prosperity has fallen, and the rise and fall of South Beauty has become a sad story, but the lawsuits arising from it are still going on.
Source: Responsible Editor of the China Times: Shi Jianlei_NBJ11331