Guizhou Provincial Venture Investment Promotion Center ("Provincial Venture Capital Center") is an institution organized by the Guizhou Provincial Development and Reform Commission and is the legal person of Guizhou Provincial Venture Investment Guidance Fund. In August 2015, Guiyang Xiangyuan Investment Management Co., Ltd. (the "Management Company"), the Provincial Venture Capital Center, and Jiang signed the "Guizhou Xinchuang Shida Venture Capital Partnership (Limited Partnership) Partnership Agreement", stipulating that the general partner would be the manager The limited partner of the company is the Provincial Venture Capital Center and Jiang Mou. The functions and rights of the partners' meeting include deciding on the withdrawal of partners and approving the transfer of limited partnership interests as stipulated in the partnership agreement that should be decided by the partners' meeting. The limited partnership share formed by the investment of the Provincial Venture Capital Center can withdraw at any time if there is a transferee, and other partners have the right of first refusal. When the Provincial Venture Capital Center withdraws, for circumstances not covered by the partnership agreement, the partnership shall hire a qualified asset appraisal agency to issue an asset appraisal report on the Provincial Venture Capital Center's investment interests as the basis for the exit price. On August 29, 2017, Guizhou Tianchuang Assets Appraisal Firm valued the 20% share of the partnership held by the Provincial Venture Capital Center with a base price of 8.75 million yuan. On August 30, 2017, the Provincial Venture Capital Center entrusted Guizhou Sunshine Property and Equity Exchange to provide services for the transfer of its partnership shares. In November 2017, Guizhou Sunshine Equity Exchange issued a "Situation Statement" stating that since the release of the information disclosure announcement, only Jiang had submitted a form of intention to transfer and related information. The Later Provincial Venture Capital Center confirmed Jiang's intended transfer qualification. In April 2018, the Provincial Venture Capital Center signed a "Transfer Contract" with Jiang, agreeing that the transfer price was 9,392,795.38 yuan, and Jiang was required to pay a deposit. The "Meeting Minutes" of the partnership in July 2018 stated that "this meeting focused on discussing whether Jiang's subscription for 20% of the Guizhou Provincial Venture Capital Promotion Center can complete the transaction." In August 2019, the Provincial Venture Capital Center signed the "Payment Agreement" with Jiang and others, agreeing to continue to perform the "Transfer Contract". Later, Jiang failed to pay according to the agreement, and the Provincial Venture Capital Center appealed to the court to order Jiang to continue to perform the payment agreement involved in the case and pay liquidated damages and interest on capital occupation. The court basically supported the appeal of the Provincial Venture Capital Center. Jiang filed an appeal, arguing that the transfer of the partnership shares involved in the case violated the procedures for the transfer of state-owned assets and was invalid. The second instance review found that on August 11, 2017, the Guizhou Provincial Venture Capital Guidance Fund’s second board meeting in 2017 decided to agree to the transfer of all shares of the Guizhou Provincial Venture Capital Guidance Fund in the Guizhou Xinchuang Shida Venture Capital Fund.

In April 2017, Shandong Caijin Venture Capital Co., Ltd. ("Caijin Investment Company"), Yantai Huarui Micro Powder Co., Ltd. ("Huarui Company"), and Liu Moumou signed the "Shandong Province Provincial Government Guidance Fund Direct Investment" Investment Agreement" ("Investment Agreement"), stipulates that Caijin Investment Company invested 2.884 million yuan in Huarui Company and became a shareholder of Huarui Company, holding 21.88% of the shares. Huarui Company pays 5% fixed income to Financial Investment Company every year. When Huarui Company's operating conditions undergo major changes and have a significant adverse impact on the equity of Caijin Investment Company, Caijin Investment Company can be forced to exit in advance, and the controlling shareholder/actual controller promises to purchase the equity of Caijin Investment Company at full price. When a liquidation event occurs, when the company distributes its remaining property to shareholders in proportion according to relevant laws and the company's articles of association, Huarui Company shall give priority to the investment principal of Caijin Investment Company. If the property distributed by Caijin Investment Company is lower than its The controlling shareholder/actual controller shall unconditionally make up the accumulated actual investment amount in the company in cash. Huarui Company paid the investment income in 2017-2018 and 2018-2019, and the investment income in 2019-2020 was deferred by agreement. In February 2021, the court declared Huarui Company bankrupt. However, the actual controller/controlling shareholder Liu Moumou did not acquire the equity of Caijin Investment Company as stipulated in the investment agreement, and Huarui Company also failed to pay investment income to Caijin Investment Company. Caijin Investment Company then filed a lawsuit with the court of first instance. The court of first instance supported the appeal to order Liu Moumou to pay the equity transfer fee. Liu Moumou was dissatisfied and appealed, claiming that the exit conditions stipulated in the investment agreement did not include the bankruptcy of Huarui Company, and that according to the investment agreement, he would bear the responsibility to make up the money after Huarui Company failed to pay off the investment money of Financial Investment Company.

The court of second instance held that when the bankruptcy liquidation case of Huarui Company was accepted by the court and declared bankrupt, it could be determined that Huarui Company's operating conditions had undergone major changes, which had a significant adverse impact on the rights and interests of Caijin Investment Company. Caijin Investment Company claimed that It is also in line with the agreement that the controlling shareholder/actual controller purchases its equity at the bottom line. Therefore, the court of second instance dismissed the appeal and upheld the original judgment.

In December 2016, Shandong Caijin Venture Capital Co., Ltd. (Party A, "Caijin Investment Company") signed an agreement with Wang (Party B, controlling shareholder/actual controller) and Shenlu Company (Party C, invested company). The investment agreement stipulates: In view of: 1. In accordance with the requirements of fiscal policies and measures to promote the development of the capital market and the transformation and upgrading of key industries, the provincial guidance fund shall establish a direct investment fund, operate in the form of equity investment, and invest in enterprises listed on the Qilu Equity Exchange Center. ... Party A agrees to invest 2.625 million yuan in Party C and hold 20% of the equity. Article 3 of the agreement stipulates the payment method and income. Party C will pay Party A 5% fixed income every year, and the controlling shareholder/actual controller shall bear joint and several liability for the fixed income. The exit time and exit method stipulated in the agreement are,... If the following circumstances occur, Party A can forcefully withdraw in advance, and the controlling shareholder/actual controller promises to acquire Party A's equity at all costs:... (4) Party C cannot pay fixed income on time. ... After the investment agreement involved in the case was signed, the Financial Investment Company paid the investment amount as agreed. Shenlu Company paid the investment income from January 2017 to January 2021 as agreed, but did not pay the income from January 2021 to January 2022. Caijin Investment Company believes that Shenlu Company's failure to pay fixed income as scheduled and as agreed is in line with the conditions for early exit stipulated in the investment agreement. So he filed a lawsuit with the court and requested that Wang be ordered to repurchase all the equity he held in Shenlu Company and pay investment income. Wang was jointly and severally liable for the payment of investment income.

Shandong Caijin Company has fulfilled its obligation to pay the equity investment and acquired the equity of Shenlu Company. Now that Shenlu Company cannot pay the plaintiff fixed income on time, it meets the exit conditions stipulated in the contract, and according to Article 9 of the agreement, it can be determined that the bottom-line purchase price is the cost price of 2.625 million yuan when Shandong Finance Company invested in the shares. Therefore, Shandong Finance Company is supported. Jin Company claimed to withdraw early and Wang Mou bought out the equity held by him. Shandong Finance Company has asked Shenlu Company to pay it the income calculated according to the agreed income standards from January 5, 2021 to the date of actual payment of the transfer fee and income, and Wang will be jointly and severally responsible for the repayment. Liability claims have factual and legal basis, and the court supports them.

The three cases introduced in this Part 2 are all cases in which the invested fund or company violated the fund agreement/investment agreement, thus triggering the government-guided fund to exit in advance. In the first case, the defendant tried to use the supplementary liability in the liquidation clause stipulated in the investment agreement to exempt itself from the equity repurchase obligation. However, the court determined that the company was declared bankrupt due to "significant changes in operating conditions" and has issued guidance to the government. The fund's equity had a "material adverse impact", thus triggering the repurchase clause stipulated in the investment agreement. We suggest that when formulating exit terms, government guidance funds should list in detail the specific circumstances of "significant changes in operating conditions" (of course, they should also include a blanket agreement) to try to avoid uncertainty when exiting in the future. In the second case, the government-guided fund listed in the investment agreement the investee company’s “failure to pay fixed income on schedule as stipulated in the investment agreement” as one of the circumstances that triggers early exit. In the end, its withdrawal petition was supported by the court. We understand that the essence of the investment involved in the case is "clear shares and actual debts" (this situation also existed in the first case). There are different views in judicial practice on investment agreements with "clear shares and actual debts". In previous years, generally It is directly treated as private lending, which means that the interests of creditors are protected in accordance with the law; in recent years, under the background of strong supervision of the financial industry, many courts tend to find it invalid, but because the basis they cite is often the regulations of the financial regulatory department Or lower-level normative documents, causing some doubts in the industry. Article 31 of the "Nine Minutes of the People" issued in November 2019 stipulates that when regulations involving public order and good customs such as financial security, market order, and national macro policies are violated, the contract should be deemed invalid, thus unifying the determination of invalidity in a sense. reasons. Despite this, it is not uncommon in judicial practice to find that the shareholders’ acquisition of fixed income is the true expression of the parties’ intentions. Some courts have argued that “the plaintiff’s legal claims should be protected among real debts”[2], and some courts have held that “the investment method is in line with national policies and business practices” and “is not an investment to avoid supervision.” "Borrowing situation" [3]). Therefore, there is still a certain degree of uncertainty in the effectiveness of investment agreements involving “clear shares and actual debts” when involved in litigation. However, the financial regulatory authorities clearly prohibit "open shares and actual debts", and the Fund Industry Association will not record such funds (such as through a "drawer agreement"). Once a dispute arises, there is still the aforementioned inability to obtain support from the court. risks of). The judgment in the third case was very dramatic. The first-instance judgment based on the principle of encouraging transactions rejected all the petitions of the government-guided funds. The second-instance court completely overturned the first-instance court’s ruling and determined that the invested fund manager engaged in Lending activities, failure to perform information disclosure obligations on major matters, and failure to perform corresponding procedures for related-party transactions are business breaches. Guidance funds that assume the obligation to maintain and increase the value of state-owned assets have the right to conclude after self-assessment that such behavior will lead to the failure to achieve the purpose of the contract. conclusion, and has the right to require the invested fund manager to perform repurchase obligations accordingly. From this judgment, combined with the cases in Part 1 of this article, it can be seen that when the court hears disputes involving the withdrawal of government-guided funds, the obligation to maintain and increase the value of state-owned assets naturally assumed by government-guided funds will be one of the key considerations.

Yunnan Provincial Equity Investment Development Center ("Equity Center") is the guiding fund management agency of the Yunnan Provincial Government. In October 2013, Yunnan Zhaoshang Equity Investment Fund Management Co., Ltd. ("Management Company"), as a general partner, signed a "Partnership Agreement" with other partners. The agreement stipulated the following contents: Yunnan Zhaoshang Equity Investment The operating period of a fund partnership enterprise (“fund enterprise”) is seven years, counted from the date of issuance of the business license, and the project investment period is five years. In December 2013, the fund company held a partner meeting and agreed that the equity center should join the fund company. On the same day, the management company, as Party A and Party B's equity center, signed a "Supplementary Agreement" stipulating that "although the "Partnership Agreement" stipulates otherwise, Party A promises and guarantees the following regarding Party B's withdrawal in accordance with the guidance fund management measures and the guidance fund notice: (1) Party B shall hold the partnership rights and interests of the fund company for no more than 5 years. After the fund company operates normally and its performance is stable, Party B has the right to choose an appropriate time to withdraw in whole or in part according to the guidance fund management measures.... (8) Exit price: When the guidance fund exits, the transfer price shall be determined according to the sum of the minimum original investment amount of the guidance fund and the income calculated from the benchmark loan interest rate (compound interest) announced by the People's Bank of China at the time of exit." The supplementary agreement also made a performance commitment: Party A All shareholders of Party A jointly promise that during the period when Party B participates in the fund company, the average investment and operating performance of the fund company will achieve an annualized rate of return of not less than 10% for Party B, and all shareholders of Party A will jointly commit to achieving the minimum annualized rate of return for Party B Bear joint and several liability guarantee. In January 2014, the Yunnan Provincial Equity Investment Government Guidance Fund Management Committee Office approved the provincial guidance fund’s investment plan for fund companies submitted by the equity center, and agreed that the guidance fund’s shareholding in fund companies should be 20 million yuan, and the shareholding period should not exceed 5 years. In December 2013, the equity center paid 20 million yuan to the fund company. The management company paid a total of 2.2 million yuan in income to the equity center from 2015 to 2018, and has not paid any income since then. The "Letter of Opinion on Yunnan Equity Investment Development Center's Request to Redeem the 20 Million Yuan Fund of Yunnan Zhaoshang Equity Investment Fund Partnership (Limited Partnership)" sent by the management company to the Equity Center on June 15, 2018 ("Letter of Opinion") ") stated that the fund company made a resolution after holding a partner meeting: ... agreed to raise funds to pay the redemption principal of 20 million yuan and investment income by the end of 2018. The management company shall bear joint and several liability for the above matters. On January 2, 2019, the equity center sent a letter to the management company requesting to return the investment principal of the guidance fund and pay all the investment income in arrears according to the agreement, but the management company did not return the principal nor pay the investment income, Court sue. The court of first instance supported the equity center’s appeal. Fund companies and management companies were dissatisfied and appealed.

The court of second instance held that in this case, the 20 million yuan invested by the equity center belonged to the government guidance fund for equity investment in Yunnan Province, and the investment and use of the government guidance fund can be within the limits of the government's regulations on the management of guidance funds, as agreed by the parties Carry out the use, investment and withdrawal of funds. The Guiding Fund Management Measures of Yunnan Province stipulates that the period for the guiding fund to participate in shares shall not exceed 5 years, and it is allowed to choose to withdraw the shares held within the agreed time limit at an appropriate time. The "Supplementary Agreement" involved in the case stipulates that the equity center shall hold the partnership rights of the fund company for a period of no more than 5 years. After the fund company operates normally and its performance is stable, it has the right to choose an appropriate time to withdraw in whole or in part according to the guidance fund management measures. The agreement is consistent with the relevant government regulations for no more than five years, and the parties freely agreed on the withdrawal of the government guidance fund. It neither violates the provisions of the law, but also complies with the relevant government regulations on the withdrawal of guidance funds. The equity participation period of the current equity center has expired on November 22, 2018, so the equity center can withdraw as agreed. Combined with the multiple correspondence between the investment center, the fund company and the equity center, the equity center can withdraw from the partnership with the agreement of all parties involved. Regarding the withdrawal amount, according to the "Letter of Opinions", the fund company promised to redeem the principal of 20 million yuan from the equity center at the end of 2018, and the management company shall bear joint and several liabilities for this. The equity center advocates that the fund company and the management company jointly return the principal of the guiding fund The lawsuit request of 20 million yuan has factual basis. The annual payment of 10% of the income is a clear agreement in the agreement. Fund companies and management companies should pay as agreed, and the first-instance judgment was correct, and the second-instance court upheld it.

In this case, the court first judged whether the provisions of the "Partnership Agreement" of the invested fund were legal and compliant based on the relevant provisions of the Government Guide Fund Management Measures. After confirming that the "Partnership Agreement" complied with the provisions of the Guide Fund Management Measures, the court then made a judgment. Whether the withdrawal of government-guided funds complies with the provisions of the "Partnership Agreement", this interlocking review method undoubtedly reminds government-guided funds: whether they make direct or indirect equity investments in the future, they should strictly follow the corresponding regulations. Guide the requirements of the Fund Management Measures, negotiate the fund's "Partnership Agreement"/"Equity Investment Agreement" and agree on terms that are no less than the requirements of the Guide Fund Management Measures, in order to avoid disputes with the invested funds or enterprises (including but not When it is limited to withdrawing from disputes), there should be evidence (i.e., "Guide Fund Management Measures") to rely on to increase the probability of winning the lawsuit.