Recently, Law News released its 2025 Benchmark Cases. King&Capital Law Firm was honored with two 2025 Benchmark Cases for its projects titled “Legal Services for Criminal Risk Prevention for a NEEQ-Listed Company” and “The Third-Party Revocation Action Dispute Involving Beijing Qixintongda Trading Co., Ltd.”
Legal Services for Criminal Risk Prevention for a NEEQ-Listed Company
Zhang Qiming
I. Project Overview
A certain NEEQ-listed company is a leading player in the local battery energy storage industry, specializing in the R&D and production of energy storage batteries. It enjoys a high level of recognition in the regional market and was listed on the NEEQ around 2016. To further expand its production scale, the company decided to explore external financing channels to secure capital support. Through an introduction, it entered into a commercial partnership with a capital operations firm, entrusting the firm to match it with investment institutions and facilitate one-on-one resource connections.
However, during the collaboration, the capital management firm, without the NEEQ company’s knowledge and in violation of their contractual agreement, used public promotional methods to solicit a large number of non-qualified retail investors to purchase the company’s shares. A portion of the funds was transferred into the NEEQ company’s account for use, while another portion was retained by the capital management firm.
Subsequently, the capital management firm was the subject of complaints and reports filed by investors, leading public security authorities to launch an investigation. Upon realizing it had been defrauded, the NEEQ-listed company urgently terminated the partnership. However, due to the use of a portion of the raised funds, the company faced the risk of criminal liability and decided to engage a legal team to intervene.
II. Legal Services: Assessment, Mitigation, and Prevention of Criminal Risks Related to the Crimes of Unauthorized Issuance of Shares and Illegal Business Operations
The company’s expectations for the retained legal team include the following three tasks: (1) Criminal Risk Assessment—Determine whether the company itself faces criminal liability in connection with the capital operation company’s matching of institutional investors. If criminal liability exists, provide subsequent defense services; if not, assist the company in clarifying the facts and presenting evidence to help it successfully navigate the criminal crisis; (2) Mitigation of Criminal Risks—Assuming the company’s own conduct does not constitute a crime, the team will assist the company in reconstructing the factual circumstances of the case, mitigating criminal risks, and preventing the company from being implicated in criminal liability due to false accusations by personnel from the capital operation firm; (3) Prevention and Control of Criminal Risks—Assist the company in conducting further self-inspection and self-correction, reviewing all aspects of its financing models, fund allocation, and operational management to prevent the recurrence of criminal risks.
Upon accepting the mandate, the legal team first conducted a thorough legal analysis and concluded that, under general circumstances, a company’s act of raising funds from the general public through an equity transfer model could constitute the crime of unauthorized issuance of shares, while the capital operations group responsible for the specific implementation could be charged with the crime of illegal business operations. Second, regarding this specific case, the legal team determined that whether the company faced criminal liability depended, on the one hand, on whether it had objectively carried out the act of “issuing” shares, and on the other hand, on whether it subjectively possessed the intent to raise funds from an unspecified number of members of the public. The legal team worked on-site at the company for three weeks, meticulously reviewing the company’s retained records. They concluded that the company had not committed a criminal offense. Based on this, they drafted several legal opinions totaling tens of thousands of words, arguing from the facts and evidence that the company had not committed a crime, and submitted these to the investigating authorities. Furthermore, the legal team communicated with the investigating authorities on multiple occasions, helping the company clarify the facts of the case and clear itself of criminal suspicion. Finally, commissioned by the company, the legal team implemented further risk prevention and control measures regarding all aspects of the company’s current internal operations to prevent the company from facing new criminal risks in the future.
III. Innovative Significance: A New Model of Legal Services for Mass-Involved Securities Criminal Cases
This legal service was not a routine defense case, but rather a benchmark example of corporate criminal risk prevention. First, the charges were highly complex, the evidence was voluminous, and the legal analysis was intricate. The foundation of this case was to clearly assess whether the NEEQ-listed company was at risk of criminal liability. Securities crimes are inherently a highly specialized field, requiring lawyers to possess multidisciplinary knowledge and a solid theoretical foundation, particularly in cases involving mass-participation economic crimes where securities offenses are intertwined with illegal fundraising charges. Faced with such a high-level professional challenge, the legal team diligently examined the evidence, reviewed a vast array of legal provisions and precedent cases, and accurately determined that the company had not committed any criminal acts and posed no criminal risk, thereby laying a solid foundation for subsequent work.
Second, we innovated the legal service model by addressing client needs from multiple dimensions and establishing a new paradigm for legal services. Beyond traditional criminal defense requirements, this engagement incorporated diverse, end-to-end service needs—including criminal risk assessment and communication with judicial authorities—representing a significant innovation in legal service delivery. While criminal defense remains the most common practice area for criminal defense attorneys, this project opened up new business types and fields, encouraging attorneys to explore diverse ways of realizing their professional value.
Third, the firm successfully rescued the involved company, thereby safeguarding the development of high-tech enterprises. The client is a New Third Board-listed company in the battery energy storage industry, holding multiple core technology patents and having become a regional benchmark in the energy storage sector, with rapid growth in recent years. This legal service eliminated the company’s criminal risks, effectively achieving the goals of rescuing a company, protecting hundreds of families, and upholding an entire industry.
Fourth, the case had a broad social impact, involved numerous investors, and effectively resolved social conflicts. In criminal cases involving a large number of parties, the most challenging aspect is addressing investor concerns. The legal services in this case were not limited to the client company; while eliminating the company’s criminal risks, they also safeguarded investors’ financial interests, prevented extreme incidents, mitigated secondary social risks, and truly realized the value of legal work in balancing the interests of all parties.
Beijing Qixintongda Trading Co., Ltd. Third-Party Revocation Action Dispute Case
Ma Zhao
I. Project Introduction
A certain trading company (hereinafter referred to as the “Client”) represented nearly 200 homebuyers and held a claim of nearly 100 million yuan arising from contract fraud committed by the former actual controller of a certain industrial company. Subsequently, acting as the applicant for enforcement, the Client initiated compulsory enforcement proceedings against the Industrial Company. During the enforcement process, the Client discovered that a pawnshop had obtained an enforceable judgment through a separate lawsuit, claiming priority rights to the Industrial Company’s sole executable real estate asset. This posed a risk that the Client’s nearly 100 million yuan in claims would face the prospect of having no assets available for enforcement.
Consequently, the client filed a third-party petition for annulment, seeking to overturn the improper final judgment. Attorney Ma Zhao represented the client throughout the entire proceedings, including the first-instance trial at the Chaoyang District People’s Court of Beijing and the second-instance appeal at the Third Intermediate People’s Court of Beijing. Ultimately, the appellate court overturned the original improper judgment, and the client’s claims were fully upheld.
II. Case Challenges and Significance
1. A class-action dispute with a one-in-ten-thousand success rate, breaking with conventional judicial practice.
Third-party revocation actions concern the stability of final judgments, and the success rate for similar cases nationwide is less than 2%. Given that the first instance was heard by a collegial panel and the reversal rate in second-instance proceedings is extremely low, the overall probability of success in this case was less than one in ten thousand. Additionally, the case involved the vital interests of nearly 200 homebuyers, making it a typical class-action dispute concerning the financial security of numerous families and social stability. The ultimate victory provides an extremely valuable judicial precedent for similar high-difficulty third-party revocation actions.
2. Intertwined Multiple Legal Relationships: Breaking Through Traditional Judicial Logic on Core Disputes
This case involved multiple complex legal issues, including the determination of debt transfer, piercing the corporate veil, and identifying fraudulent litigation. Furthermore, multiple companies—such as pawnshops and industrial enterprises—were all under the control of the same actual controller and his family affiliates, resulting in hidden and intertwined legal relationships. Attorney Ma Zhao innovatively applied a “piercing the corporate veil” approach, transcending the limitations of surface-level contract terms. This ultimately led the appellate court to recognize that the three companies were under common control, and that the original litigation involved malicious collusion and the concealment of key facts, thereby overturning the first-instance court’s ruling, which had relied solely on the literal wording of the contract.
3. Overcoming Comprehensive Judicial Obstacles to Maximize the Protection of the Client’s Legitimate Rights and Interests.
During the case, Attorney Ma Zhaohui faced multiple challenges: first, countering the preconceived stance of the original trial panel; second, collecting and securing key evidence regarding the commingling of corporate entities and the transfer of debt; and third, refuting the opposing party’s core defense that “the debt transfer did not obtain the explicit consent of the creditor.” To this end, Attorney Ma Zhaozhao undertook extensive and meticulous work, including submitting tens of thousands of words of legal briefs, maintaining weekly communication with the judge, and conducting on-site investigations at the prison to gather evidence. Ultimately, he successfully persuaded the appellate court to overturn the improper original judgment, thereby preserving the potential for enforcement of nearly 100 million yuan in claims for nearly 200 homebuyers.
4. Upholding Judicial Justice and Demonstrating Significant Social Significance
not only recovered substantial financial losses for nearly 200 families and prevented social conflicts arising from unfulfilled claims, but also dealt a severe blow to illegal activities such as the use of affiliated company relationships, the transfer of assets through malicious litigation, and the evasion of enforcement. The case highlights the critical role of the “piercing the corporate veil” principle in upholding fairness and justice, providing clear judicial guidance for similar third-party revocation actions involving groups of claimants.
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