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Sunday 22 November 2009
High Court dismisses Hengxin suit
The High Court yesterday dismissed cable-making firm Hengxin Technology’s lawsuits against former executive directors Jiang Wei and Qian Lirong, who was also its executive chairman and CEO.
Company also told to pay bonuses claimed by former exec directors
By MICHELLE QUAH 20 November 2009
The High Court yesterday dismissed cable-making firm Hengxin Technology’s lawsuits against former executive directors Jiang Wei and Qian Lirong, who was also its executive chairman and CEO.
The court also awarded the two men the sums they claimed as unpaid bonuses owed to them by the company - as well as costs.
The case dates back to 2007, when Mr Qian and Mr Jiang were forced out of the company at an extraordinary general meeting (EGM) called by Cui Genxiang.
Mr Cui, Mr Qian and Mr Jiang were co-founders of a Hengxin subsidiary called Jiangsu Hengxin Technology Co Ltd, located in China.
Mr Cui and Mr Qian are also related by marriage, with Mr Cui’s elder brother married to Mr Qian’s sister.
Mr Cui, appointed Hengxin’s non-executive chairman after the EGM, claimed that Mr Qian had closed down operations at the Jiangsu subsidiary for two weeks after he was made to resign from all his positions at Hengxin.
Hengxin’s suit against Mr Qian claimed that it lost hundreds of thousands of dollars in lost production after Mr Qian shut down the factory as this was just before the traditionally busy Chinese New Year period.
It also claimed that Mr Qian and Mr Jiang started a rival company, Trigiant Group Pte Ltd, in breach of their service contracts with Hengxin, and that many Hengxin staff left to join the rival. It said Mr Qian and Mr Jiang diverted business from four of Hengxin’s important customers to Trigiant.
Hengxin, which makes mobile communications cables and other telecommunications equipment, wanted compensation for losses suffered during its plant closure, as well as damages resulting from loss of business suffered when customers went to Trigiant instead.
Mr Qian, in his counter-claim, said it was Hengxin’s management, after discussions with him, that decided to halt production at the plant, due to a low supply of production materials and to ensure that staff did not damage the machinery.
Mr Qian also denied having a hand in setting up Trigiant.
Both Mr Qian and Mr Jiang said they were wrongfully dismissed and were claiming their bonuses.
Justice Lai Siu Chiu, in her judgment yesterday, said she felt Hengxin terminated Mr Qian and Mr Jiang’s employment ‘without cause’ under their service agreement with the company.
She said the two men’s claim to their bonuses was clearly laid out in their service agreements with Hengxin and that no proviso or any other clause denied them the right to that claim.
Justice Lai said she felt the company was bent on ensuring that neither men would be a threat to Hengxin’s business and that its motive in suing them was to stifle competition.
She also said Hengxin’s claim that Mr Qian set up Trigiant to compete with the company was based on ‘pure hearsay’ since it failed to produce any witness to support this.
Justice Lai said she believed Mr Cui’s removal of Mr Qian from the company was an act of revenge, as his brother was having marital problems with Mr Qian’s sister, and he was getting back at Mr Qian on his brother’s behalf.
She ruled that Hengxin should pay Mr Qian his claim of almost 1.5 million yuan (S$305,000) in unpaid bonuses, and Mr Jiang almost $5,000 in unpaid bonuses. She also awarded costs to both men.
Mr Qian and Mr Jiang were represented by Allen & Gledhill (A&G), while Hengxin was represented by KhattarWong.
A spokesman for A&G told BT: ‘The plaintiffs’ claim on the wrongful closure of the factory and restraints of trade had failed. We feel clearly vindicated.’
1 comment:
High Court dismisses Hengxin suit
Company also told to pay bonuses claimed by former exec directors
By MICHELLE QUAH
20 November 2009
The High Court yesterday dismissed cable-making firm Hengxin Technology’s lawsuits against former executive directors Jiang Wei and Qian Lirong, who was also its executive chairman and CEO.
The court also awarded the two men the sums they claimed as unpaid bonuses owed to them by the company - as well as costs.
The case dates back to 2007, when Mr Qian and Mr Jiang were forced out of the company at an extraordinary general meeting (EGM) called by Cui Genxiang.
Mr Cui, Mr Qian and Mr Jiang were co-founders of a Hengxin subsidiary called Jiangsu Hengxin Technology Co Ltd, located in China.
Mr Cui and Mr Qian are also related by marriage, with Mr Cui’s elder brother married to Mr Qian’s sister.
Mr Cui, appointed Hengxin’s non-executive chairman after the EGM, claimed that Mr Qian had closed down operations at the Jiangsu subsidiary for two weeks after he was made to resign from all his positions at Hengxin.
Hengxin’s suit against Mr Qian claimed that it lost hundreds of thousands of dollars in lost production after Mr Qian shut down the factory as this was just before the traditionally busy Chinese New Year period.
It also claimed that Mr Qian and Mr Jiang started a rival company, Trigiant Group Pte Ltd, in breach of their service contracts with Hengxin, and that many Hengxin staff left to join the rival. It said Mr Qian and Mr Jiang diverted business from four of Hengxin’s important customers to Trigiant.
Hengxin, which makes mobile communications cables and other telecommunications equipment, wanted compensation for losses suffered during its plant closure, as well as damages resulting from loss of business suffered when customers went to Trigiant instead.
Mr Qian, in his counter-claim, said it was Hengxin’s management, after discussions with him, that decided to halt production at the plant, due to a low supply of production materials and to ensure that staff did not damage the machinery.
Mr Qian also denied having a hand in setting up Trigiant.
Both Mr Qian and Mr Jiang said they were wrongfully dismissed and were claiming their bonuses.
Justice Lai Siu Chiu, in her judgment yesterday, said she felt Hengxin terminated Mr Qian and Mr Jiang’s employment ‘without cause’ under their service agreement with the company.
She said the two men’s claim to their bonuses was clearly laid out in their service agreements with Hengxin and that no proviso or any other clause denied them the right to that claim.
Justice Lai said she felt the company was bent on ensuring that neither men would be a threat to Hengxin’s business and that its motive in suing them was to stifle competition.
She also said Hengxin’s claim that Mr Qian set up Trigiant to compete with the company was based on ‘pure hearsay’ since it failed to produce any witness to support this.
Justice Lai said she believed Mr Cui’s removal of Mr Qian from the company was an act of revenge, as his brother was having marital problems with Mr Qian’s sister, and he was getting back at Mr Qian on his brother’s behalf.
She ruled that Hengxin should pay Mr Qian his claim of almost 1.5 million yuan (S$305,000) in unpaid bonuses, and Mr Jiang almost $5,000 in unpaid bonuses. She also awarded costs to both men.
Mr Qian and Mr Jiang were represented by Allen & Gledhill (A&G), while Hengxin was represented by KhattarWong.
A spokesman for A&G told BT: ‘The plaintiffs’ claim on the wrongful closure of the factory and restraints of trade had failed. We feel clearly vindicated.’
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