Re China Biologic – Shareholder Standing

A recent judgment in the matter of David (Xiaoying) Gao v China Biologic Products Holdings, Inc, has provided guidance regarding the standing of shareholders to commence certain proceedings against Cayman Islands companies.

Mr Gao - a beneficial (but not registered) shareholder and the former Chairman and CEO of China Biologic Products Holdings, Inc. - commenced proceedings against the company alleging inter alia that the directors of the company had, in breach of their duties, caused it to improperly issue certain shares. In response, the company applied to strike out the proceedings on bases including that Mr Gao lacked standing (i.e. sufficient proximity to the subject of the complaint).