What influence does Li Guoqing Yu Yu divorce have on Dangdang? Response from the Ministry of Justice

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Comprehensive report by Wang Qifan
On the evening of July 16, the official microblog of Dangdang Ministry of justice released a message introducing the progress of Li Guoqing’s Yu Yu divorce case, saying that the shareholder’s divorce lawsuit of dangdangdang does not affect the operation and governance structure of dangdangdang.com.
The article introduces that the equity proportion of Beijing Dangdang Kewen e-commerce Co., Ltd. registered in Beijing Municipal Bureau of industry and commerce is 64.20% for Yu Yu, 27.51% for Li Guoqing and 8.29% for management. Shareholders’ exercise of power should be based on the proportion of industrial and commercial registration. The spouse of a shareholder has no right to exercise the rights of a shareholder because of his / her spouse status. Li Guoqing himself took the place of the court to divide the equity by 5:5, so as to increase his share proportion and hold the shareholders’ meeting. There is no legal basis for Li Guoqing.
Dangdang’s Ministry of justice also pointed out that Yu Yu, Li Guoqing, children and the management agreed on their shareholding ratio in the holding company, that is, Yu Yu 52.23%, Li Guoqing 22.38%, children 18.65% and management 6.74%. This proportion, after deducting the holding agent factor, is currently mapped in the equity structure of Beijing Dangdang Kewen e-commerce Co., Ltd. registered by Beijing Municipal Bureau of industry and commerce. This ratio truly reflects the agreement made by Yu Yu, Li Guoqing and their children in 2016, which is in line with Dangdang’s history.
Dangdang network dispute has a long history, Li Yu’s divorce case is also difficult to adjudicate because of equity disputes.
As early as April 26, Li Guoqing’s “grabbing the official seal” incident once attracted attention. According to a statement issued by dangdang.com, at 9:34 a.m. on April 26, 2020, “Li Guoqing, together with five people, broke into Dangdang’s office area and robbed dozens of official seals and financial seals. The company has already called the police.”
However, on June 13, the case of Li Guoqing’s “grabbing the official seal” has been closed, and the investigation result shows that Li Guoqing has not violated the law.
On June 15, the divorce case between Li Guoqing and Yu Yu was tried in Dongcheng District Court of Beijing, and Li Guoqing and Yu Yu appeared in court. It is reported that this trial is the second round of trial after the first session in November last year. Due to the complicated equity division of dangdang.com, a judgment has not been pronounced.
On the morning of July 7, the official microblog of dangdang.com said that Li Guoqing once again resorted to force and took more than 20 people into Dangdang by force in the morning, prying open multiple safes and taking away information. The company has already called the police and is in the process of handling.
On the evening of July 8, Beijing Chaoyang police issued a situation circular, saying that at present, Chaoyang Public Security Bureau has detained Li and other four illegal offenders according to law.
On July 14, according to an internal explanatory letter from dangdang.com, the official seal and bank U shield seized by Li Guoqing and others on July 7 have been recovered by relevant government departments and returned to dangdangdang. Dangdangdang has fully resumed normal operation.
Dangdang.com was founded in November 1999 by Yu Yu and Li Guoqing. In December 2010, when Dangdang was listed on the New York Stock Exchange, its market value was close to $3 billion at its peak. In September 2016, when Dangdang completed its privatization and delisting, its market value was only 536 million US dollars (about 3.36 billion yuan). At that time, the outside world speculated that Dangdang may return to the A-share market. In 2018, dangdang.com was sold to HNA for 7.5 billion yuan, which eventually ran aground.
Dangdang Ministry of justice also introduced the progress of Li Guoqing’s Yu Yu divorce case
1. On July 18, 2019, Li Guoqing filed a divorce lawsuit, and Yu Yu received an EMS courier summons from the court on September 7, and learned that the court hearing would begin on September 18. The court did not give the defendant a statutory time limit of 15 days to reply. Yu Yu raised an objection to the court.
2. On October 8, 2019, Li Guoqing broke a cup in Tencent’s “attack dreamer” and spread it for 120 million times. On the next day, the court met with the lawyer of the plaintiff Li Guoqing, and informed the plaintiff to meet on October 10, and lawyers from both sides attended.
3. In November 2019, Dongcheng court contacted the lawyers of both parties and held the first hearing on November 29. Lawyer Yu Yu was told that the first hearing was the exchange of evidence between the two parties, and the court was closed when the Court opened, and the parties did not have to be present. Lawyer Yu Yu told the court that the party would not be present. Yu Yu’s lawyer appeared in court and submitted evidence, while Li Guoqing / his lawyer did not.
4. On November 29, 2019, the first formal court session, Li Guoqing knew in advance that Yu Yu would not be present, and interviewed several media at the gate of Dongcheng District Court before and after the court session.
5. On February 24, 2020, Dongcheng court contacted Yu Yuhe, the defendant’s lawyer, to discuss the online hearing. Novel coronavirus pneumonia is not suitable for online hearings, according to Yu Yu. According to the notice of the Supreme People’s Court on strengthening and standardizing online litigation during the prevention and control of new crown pneumonia, the court’s online hearings need to take full account of the factors such as the type of case, difficulty level and order of priority, so as to safeguard the legitimate rights and interests of the parties. If the party concerned disagrees with the online hearing and applies for an extension according to law, the court shall allow it.
6. On April 26, 2020, Li Guoqing led the Han in black to seize the official seal of Dangdang, and dangdang.com called the police. Li Guoqing handed out leaflets on the spot, saying that “shareholders’ meeting” and “board of directors” were held. Yu Yu, the major shareholder, did not receive the notice of the meeting. According to the articles of association of dangdangdang.com registered in the industry and commerce, dangdang.com does not set up a board of directors, so the two meetings have not been held.
7. On June 15, 2020, before the court interview (cross examination before the second hearing), Li Guoqing received multiple rounds of media interviews at the gate of the court before and after the conversation. Because Li Guoqing’s evidence was submitted in the court that day, the court could only cross examine the evidence submitted by lawyer Yu Yu more than half a year ago. Yu Yu rarely spoke during the whole process, and Li Guoqing told about his marriage status of sending local products.
8. On June 18, 2020, in view of Li Guoqing’s online account of his domestic violence history and Yu Minhong’s mother carrying a kitchen knife, Yu Yu applied to Dongcheng court for a personal safety protection order.
9. On July 3, 2020, Yu Yu’s application was rejected by the court, and no reason was given in the rejection document. Yu Yu held an emergency meeting with Dangdang network executives to prepare for Li Guoqing’s military action again.

10. At 6:30 a.m. on July 7, 2020, Li Guoqing led 30 people, including social people, to Dangdang, carry electric drills, enter the security door, rob several security guards’ mobile phones, restrict their personal freedom, pry open the safe, and steal the official seal, U shield and other information. Li Guoqing’s action of 30 people in the morning exceeded the plan of Dangdang management on July 3.
11. At 10 p.m. on July 8, 2020, Chaoyang Public Security announced Li Guoqing’s administrative detention for 10 days.
12. On the governance structure of dangdang.com: according to the articles of association of Beijing Dangdang science and technology e-commerce Co., Ltd. registered by Beijing Municipal Bureau of industry and commerce, dangdang.com has one executive director, Yu Yu, and the company’s supervisor is Chen min. Yu Yu’s direct reporting point is several senior executives from the president’s office of Dangdang. They are responsible for the daily operation of Dangdang according to their respective departments.
13. According to the opinions of legal professionals, the divorce litigation of Dangdang shareholders does not affect the operation and governance structure of Dangdang. At present, Beijing Dangdang Kewen e-commerce Co., Ltd. has 64.20% of shares registered in Beijing Municipal Bureau of industry and commerce, 27.51% of Li Guoqing and 8.29% of management. Shareholders’ exercise of power should be based on the proportion of industrial and commercial registration. The spouse of a shareholder has no right to exercise the rights of a shareholder because of his / her spouse status. Li Guoqing himself took the place of the court to divide the equity by 5:5, so as to increase his share proportion and hold the shareholders’ meeting. There is no legal basis for Li Guoqing.
14. Yu Yu, Li Guoqing, children and the management agreed on their shareholding ratio in the holding company, that is, Yu Yu 52.23%, Li Guoqing 22.38%, children 18.65% and management 6.74%. This proportion, after deducting the holding agent factor, is currently mapped in the equity structure of Beijing Dangdang Kewen e-commerce Co., Ltd. registered by Beijing Municipal Bureau of industry and commerce. This ratio truly reflects the agreement made by Yu Yu, Li Guoqing and their children in 2016, which is in line with Dangdang’s history.
15. Written agreement on division of family property between Yu Yu, Li Guoqing and adult children. According to the marriage law, husband and wife can agree on the ownership of common property in writing. If there is an agreement, it shall be followed; if there is no agreement, it shall be divided equally. Since Yu Yu and Li Guoqing reached a written agreement on the division of family property in 2016, the equity division ratio between families has been strictly implemented in accordance with the agreement. According to the marriage law and the reference opinions of the first civil court of Beijing Higher People’s Court on several difficult issues in the trial of marriage dispute cases (2016), legal professionals believe that the family property division agreement reached by Yu Yu and Li Guoqing is legal and effective and should be supported in divorce. Li Guoqing’s claim that the equity should be 5:5 points is contrary to the basic spirit of the contract, and his claim can not be supported by law.
Dangdang legal department