This is Part 2A of the BTC litigation triptych that ends tomorrow.
The New York Times has a sobering article today regarding the Chinese legal “system.” Mr. David Ji is an executive with Apex Digital, and his company is involved in a dispute with Sichuan Changhong Electric. Changhong is apparently a majority state-owned company based in China’s Sichuan Province. The Times alleges in vivid detail how Changhong used police, prosecutors and judges to try to collect a monies it believed were owed by Apex.
The Times notes that Mr. Ji spent two months in custody at a Changhong-owned apartment that featured all-night interrogation sessions:
So in late December last year, according to a person who compiled a record of the encounter, guards emptied his pockets, removed his shoes and socks, and ripped the buttons off his oxford shirt. He was ushered disheveled and barefoot into the office of Zhao Yong, the chief executive of Sichuan Changhong Electric, Mr. Ji’s onetime business partner and, more recently, his warden.
“Your only way out is to do what Changhong tells you to do,” Mr. Zhao told him. “If I decide today I want you to die, you will be dead tomorrow.”
Mr. Ji soon agreed to cooperate with Changhong. But a year after the Chinese police apprehended him in his hotel room during a business trip, he remains in China as a pawn – Mr. Ji’s colleagues say a hostage – in a commercial dispute…”
Does this fit the definition of bet-the-company litigation? How about BTL: bet-your-life?
We previously examined corporate responsibility issues involved with companies doing business in such countries as China and Russia. That posting noted Yahoo’s recent travails in China.
Since then, Yahoo CEO Terry Semel gave these remarks, reported by CNET:
Asked to comment on the criticism Yahoo received for providing information that helped the Chinese government convict a journalist accused of leaking state secrets, Semel said companies doing business in China and other foreign countries are subject to the laws of that land.
“It’s both a moral issue and a legal issue…Sometimes, on a personal level, I wince,” he said. However, “everyone (living in China) knows the law, and everyone operating (businesses) in those countries knows the law.”
It sounds like Apex’s Mr. Ji has had to do more than wince. And as far as everyone doing business with China knowing the law, I suggest a reading of the Times article. It definitely raises the stakes for bet-the-company litigation.