[3] Danyang Court Responds to Luo Yonghao's Pledge to Repay Debts Even by "Selling His Art"; Full Story Revealed!

On November 3, “[2] Luo Yonghao has been restricted from high consumptionThe topic topped the trending searches. Subsequently, Luo Yonghao publicly responded on Weibo with a lengthy post regarding the matter, saying: “Even if the company is completely shut down due to force majeure, I personally will repay all the debts through means such as ‘performing’.” On the 4th, a reporter from Yangtse Evening Post/Ziniu News contacted Director Chen Guoying of the Enforcement Bureau of Danyang City Court. Director Chen explicitly stated: Welcome! At the same time, he also emphasized a warning: as a public figure, one should set a good example of “integrity” for the general public. (Partially sourced fromYangtze Evening PostI'm ready to help translate Chinese text into natural English. Please provide the Chinese text you'd like me to translate.

The full story of the incident:

Jiangsu Chenyang Electronics Co., Ltd. began business dealings with Smartisan Technology Co., Ltd., where Luo Yonghao works, in May 2017, supplying chargers to Smartisan Technology. During the cooperation, Chenyang Electronics actually supplied goods worth RMB 3,755,991.6 to Smartisan Technology, but Smartisan Technology paid only RMB 50,000. As of November 1, 2018, it still owed Chenyang Electronics RMB 3,705,991.6 for the goods. After repeated unsuccessful demands for payment, Chenyang Electronics filed a lawsuit with the People's Court.

After Chenyang Company filed the lawsuit, the parties signed a Debt Disposal Agreement. According to the agreement, the debt arising from the cooperation between the creditor (i.e., Chenyang Company) and the debtor (i.e., Smartisan Technology) under the original cooperation agreement totaled 3,705,991.6 yuan.

The debt disposal plan is recorded as follows: the debtor shall pay RMB 1,111,797.48 to the creditor before January 31, 2019. If the debtor fails to make payment on schedule in accordance with the aforementioned payment time, this agreement shall become void, and all parties shall continue to perform based on the original debt situation. The debtor agrees to extend the payment period for the remaining debt of RMB 2,594,194.12 by 3 years, commencing from February 1, 2019 and expiring on January 31, 2022.

However, Smartisan failed to fulfill the first installment payment obligation under the "Debt Disposal Agreement."

On August 6, 2019, the court ruled:

In accordance with Article 109 of the Contract Law of the People's Republic of China and Article 144 of the Civil Procedure Law of the People's Republic of China, the judgment is as follows:

The defendant Beijing Smartisan Digital Technology Co., Ltd. shall pay the plaintiff Jiangsu Chenyang Electronics Co., Ltd. the amount of 3,705,991.6 yuan for goods within 10 days from the effective date of this judgment.

If the obligation to pay money is not fulfilled within the period specified in this judgment, interest on the debt during the period of delayed performance shall be doubled in accordance with Article 253 of the Civil Procedure Law of the People's Republic of China.

In the end, as everyone saw, Smartisan Technology still did not pay.

 

So,

 

The court on September 4 Case filing and enforcement In the case of the dispute over a sales contract filed by Chenyang Company against Smartisan Technology, Thus came the consumption restriction order against Luo Yonghao.

Why is it that the consumption restriction measures were imposed on Smartisan Technology, yet Luo Yonghao is implicated?

Legal interpretation:


Why was Luo Yonghao subjected to the enforcement of a consumption restriction order?

According to Article 3 of the "Provisions of the Supreme People's Court on Restricting High Consumption and Related Consumption of Persons Subject to Enforcement":

If the person subject to enforcement is a natural person, after the adoption of consumption restriction measures, they shall not engage in the following high consumption and consumption behaviors not necessary for daily life or work:

(1) When using transportation, choosing to travel by airplane, soft sleeper on trains, or second-class or higher cabins on ships;

(2) Engaging in high-level consumption at star-rated or higher hotels, restaurants, nightclubs, golf courses, and other such venues;

(3) purchasing real estate or constructing new buildings, expanding, or carrying out high-end renovations of houses;

(4) Leasing high-end office buildings, hotels, apartments, and other premises for office use;

(5) purchasing vehicles not essential for business operations;

(6) Tourism and vacation;

(7) Children attending high-tuition private schools;

(8) paying high premiums to purchase insurance and wealth management products;

(9) Consumption behaviors that are not necessary for daily life or work, such as taking any seat on G-series high-speed trains or first-class or higher seats on other high-speed trains.

If the person subject to enforcement is an entity, after consumption restrictions are imposed, the entity and its legal representative, principal responsible person, directly responsible personnel affecting debt performance, and actual controller The acts specified in the preceding paragraph shall not be carried out. For private consumption using personal property to carry out the acts specified in the preceding paragraph, an application may be submitted to the enforcing court. If the enforcing court verifies the application as true, it shall grant approval.

 

Luo Yonghao, as the legal representative of Smartisan Technology, naturally became subject to consumption restrictions.

 

However, on December 5, 2018, Smartisan Technology changed its legal representative from Luo Yonghao to Wen Hongxi. Through this change of legal representative, Luo Yonghao effectively circumventedAfterwardsSome consumption restrictions that should have been directed at him.

This is what Luo Yonghao mentioned in his confession—actions such as changing the legal representative were also necessary for continuing operations to repay debts.


How can Luo Yonghao lift the consumption restriction order?

A lawyer from Guangdong Zhiming Law Firm stated Generally, the people's court may lift the high-consumption restriction order on the person subject to enforcement under the following two circumstances:

 

1. During the period of restriction on high consumption, the person subject to enforcement provides genuinely effective security or obtains the consent of the applicant for enforcement;

2. The person subject to enforcement has fully performed the obligations determined by the effective legal document.

Legal basis:



Article 8 of the Supreme People's Court's Several Provisions on Restricting High Consumption by Persons Subject to Enforcement: A person subject to enforcement who is restricted from high consumption and needs to engage in consumption activities prohibited by these provisions due to necessities of life or business shall file an application with the people's court and may proceed only after obtaining approval.

 

Article 9: During the period of high consumption restriction, if the person subject to enforcement provides valid and effective guarantee or obtains the consent of the applicant for enforcement, the people's court may lift the high consumption restriction order; if the person subject to enforcement has fully performed the obligations determined by the effective legal document, the people's court shall promptly lift the high consumption restriction order by notification or announcement within the scope specified in Article 6 of these provisions.

(Part of the article sourced from China Judgments Online and Yangtze Evening News)