Dacheng Wins Lawsuit for Investor in a VAM Arrangement Case Following SPC’S Unfavorable Ruling in Haifu v Shiheng

Dacheng senior partner Yu Hui recently won a lawsuit after more than twelve mouths’ relentless effort on behalf of Fuhui Fund, an investor in a valuation adjustment mechanism (VAM) arrangement. It marks the first court decision favoring the investor since the Supreme People’s Court ruled that the VAM arrangement between Haifu Investment Co., Ltd. (Haifu), a PE investor based in Suzhou, and Gansu Shiheng Non-ferrous Resources Recycle Co.,Ltd. (Shiheng) was invalid and unenforceable.

Since 2013, Mr. Yu has been actively contributing ideas to a VAM legislative consultation initiative started by China Venture Capital Association (“CVCA”). The initiative would undoubtedly help safeguard investors’ interests, clarify transactional rules and boost the growth of equity investment.

On April 22 2014, as a pioneering law practitioner and researcher on the validity and enforceability of VAM, Mr. Yu was invited to give a training session to staff at Xinhua Insurance Group in respect of VAM. On May 15, he is scheduled to deliver a keynote speech on the case he has successfully represented to over a hundred investment fund managers at a lecture to be organized by CVCA.