SHANGHAI, April 28, 2014 /PRNewswire/ -- Shanghai Shangshang International Trading Co., Ltd. ("Shanghai Shangshang"), a subsidiary of JD.com, announced that it has filed a lawsuit against its parent, JD.com, with the Shanghai Putuo District People's Court. The lawsuit was filed in connection with JD.com selling the subsidiary in violation of the interests of its minority shareholders. The lawsuit was officially accepted by the court on April 1, 2014.
At the end of 2011, JD.com announced the acquisition of b2c website minitiao.com following an evaluation of the business by the internal investment team at JD.com, according to Lai Dandan, head of Shanghai Shangshang. In June 2012, Shanghai Shangshang was incorporated as the operating body of minitiao.com. According to the articles of association, Shanghai Shengdayuan Information Technology Co., Ltd., a wholly-owned subsidiary of JD.com, held 80 percent of minitiao.com's shares, valued at RMB 8 million (approx. US$1.3 million), while minitiao.com's management team held the remaining 20 percent, valued at RMB 2 million. Minitiao.com booked RMB 350 million in sales in 2013, an increase of more than 500 percent year-on-year, with net profits exceeding RMB 15 million.
On January 22, 2014, JD.com unilaterally dismissed minitiao.com's operating team, citing a business adjustment as the reason, without calling a shareholders' meeting and obtaining a shareholders' meeting resolution. On January 28, the 1,123 stores under the management of minitiao.com were shifted to be directly within the JD.com online system. On the same day, access to the system for all of minitiao.com's staff was shut off. The website has not been updated since that date, leading to a complete business halt of the website. On April 22, the website of minitiao.com was redirected to JD.com.
On March 10, 2014, JD.com engaged Shanghai K-Insight Law Firm who sent a lawyer's letter to the management team of minitiao.com, specifying that JD.com will sell all of its 80 percent stake in minitiao.com to a 3rd party for a sum of RMB 20.
On April 1, 2014, Shanghai Shangshang International Trading Co., Ltd. filed a lawsuit with the Shanghai Putuo District People's Court, claiming that JD.com, as the controlling shareholder, has damaged the interests of the subsidiary. The case was accepted by the court on the same day.
According to the appendix file (F-1/A) JD.com submitted to the SEC on April 14, JD.com will be traded on NASDAQ under the symbol of "JD".
SOURCE Shanghai Shangshang International Trading Co., Ltd.