King & Capital's Qu Lihong and Litigation Team Win Major Litigation Victory against Qingdao Port Group and Dagang Branch in Obtaining and Recovering an RMB 300 Million Judgment

Time:2020-07-30 Source: The Author: Browse: Print Font Size:T|T
  King & Capital firm's Qu Lihong, the firm's litigation and capital markets partner, and her litigation team won a significant victory for the firm's client ICBC Xinjiang Branch.  After five years of pursuing litigation, Qu Lihong and her team obtained an RMB 300 million judgment against Qingdao Port Group and the Dagang Branch (collectively, "Qingdao Port Group"). More extraordinary, Lihong and her litigation team successfully collected on the entire judgment amount.  Team members included Zhou Xingyue, Xiao Yongcheng, Zhang Xiaofeng, and Pan Xin.

  The lawsuit stemmed from a massive financial fraud scheme devised by Chen Jihong, former owner of the Decheng Mining Ltd., a commodities trading firm. The controversial Chen whom China's Forbes had once selected to their wealth list, and who had also bribed the fallen Qinghai Province government leader Mao Xiaobing, had defrauded domestic and global banks in his ill-gotten scheme.  Borrowing against inventories of metals, Chen used these commodities as collateral to raise financing. Still, at the same time, as he collateralized these commodities, he duplicated the warehouse receipts on the same inventory, repeatedly mortgaging on its value, leaving creditors holding separate claims and fighting over the same collateral.  Lihong and her team had filed suit against defendants Qingdao Port Group and its related entity to hold them responsible for breach of contract as the warehouse supervisor.

  The lawsuit was all the more complicated due to the many civil and criminal litigation matters generated by Chen's fraud. Chen had defrauded numerous companies of an amount of over 12.3 billion yuan ($1.79 billion). He had also deceived banks and financial institutions in lending loan facilities of more than 3.6 billion yuan. Furthermore, HSBC, ABN AMRO, Standard Chartered, Citi, South African Standard Bank, and other well-known foreign banks had lent monies totaling nearly US $ 1 billion to Chen’s Decheng companies and also became victims of the scheme. Competing with this lawsuit were those filed by many other banks who also were pursuing claims against Qingdao Port Group. Many of these banks had also filed lawsuits to foreclose on their security but had failed. Besides managing this civil litigation, Lihong and her team had to familiarize themselves with the other competing civil lawsuits as well as the ongoing criminal proceedings brought against Chen and his companies.

  Despite the litigation complexities, Lihong and her team developed and executed a well-planned legal strategy.  The strategy focused on the obligations of, and breach of, Qingdao Port Group's Warehouse Receipt Pledge Supervision Agreement.  The plan was successful as Qu Lihong and her team successfully proved the case, appearing before several courts, including the High Court of Xinjiang and the Supreme Court.

  After five years of enduring litigation, the result, recovering all of the client's losses of nearly RMB 300 million, proved rewarding to the client ICBC Xinjiang Bank.  Even more, Qu Lihong and her team, including Zhou Xingyue, Xiao Yongcheng, Zhang Xiaofeng, and Pan Xin, demonstrate King & Capital's commitment of excellence to its clients.