Source: Key points of case judgment from "Gazette of the PRC Supreme People's Court" Volume 2022

Case judgment opinion summary:

It is called equity transfer, but the capital transaction between the parties to the transfer is a loan relationship, and there are characteristics that the transferee does not take over the management of the company after the transfer, expresses the meaning of the guarantee and does not enjoy the rights of shareholders, such as debt repayment as the condition of equity return, which should be recognized as equity transfer guarantee. The transferee of equity transfer is only a nominal shareholder and does not actually enjoy the rights of shareholders. If the equity transfer guarantor requests to confirm the equity he enjoys, it shall be supported. Before paying off the guaranteed debts, the guarantor of equity transfer who requests to change the equity registration in its name will not be supported.

The people's court should pay attention to reviewing the specific provisions of the relevant contracts, accurately identify the true meaning of the parties and fully respect the autonomy of the parties when dealing with the case of equity transfer guarantee disputes; Note that it is not necessary to accurately identify the equity transfer guarantee by referring to the legal elements of pledge guarantee, and whether to transfer the company's management right; Note that in the case involving the transfer of the company's management right, the investment and operation contribution of the secured party, market conditions and other factors shall be comprehensively considered, and the disputes arising from the operation profit and loss, changes in equity value, etc. shall be properly handled by using the principle of balance of interests.