A court ruling has brought to light a dispute over a 65 million yuan "reward payment" between Shi Chunbao, the controlling shareholder of Beijing Chunlizhengda Medical Instruments Co.,Ltd. (688236.SH, 01858.HK), and a pre-IPO investor.
On July 20, the Beijing Tongzhou District People's Court publicly released a civil judgment, case number (2025) Jing 0112 Min Chu No. 36951. Although code names were used, the stock code 01858.HK mentioned in the judgment confirms the company involved is Chunli Medical. The court ultimately ruled that the reward payment agreement between Shi Chunbao and the investor regarding Chunli Medical's A-share IPO was invalid.
65 Million Yuan Reward Payment Not Upheld
This dispute originated from an equity transaction in 2020 when Chunli Medical was preparing for its A-share listing. In April 2020, Shi Chunbao, then legal representative of Chunli Medical and a shareholder, planned to transfer 3 million domestic shares to Panmao (Shanghai) Investment Center (Limited Partnership) ("Panmao Investment"). The two sides initially disagreed on the company's valuation: Shi Chunbao argued for a 15 billion yuan valuation, while Panmao Investment argued for 12 billion yuan. Ultimately, the two sides reached a deal at a 12 billion yuan valuation, corresponding to a share transfer price of 86.74 yuan per share, with the 3 million shares totaling approximately 260 million yuan. At the same time, Panmao Investment also promised to pay Shi Chunbao an additional 65 million yuan in premium.
However, the documentation for this 65 million yuan payment changed form several times. On April 17, 2020, Panmao Investment's lawyer sent a draft of the Share Transfer Agreement to Shi Chunbao for review via WeChat group, with Article 6 involving a reward clause. Two days later, the two sides signed a Reward Agreement, separating the reward clause from the equity transfer agreement. On April 26, a Termination Agreement of the Reward Agreement was signed, terminating the original reward agreement, and on the same day Panmao Investment issued a Letter of Commitment to Shi Chunbao. According to the Letter of Commitment, from the date the equity transfer was completed until Panmao Investment held Chunli Medical shares, if Chunli Medical completed a qualified listing, Panmao Investment should pay Shi Chunbao 65 million yuan within 5 working days of the listing completion, as a reward for Shi Chunbao actively promoting Chunli Medical's A-share listing and facilitating the circulation of the company's domestic shares on the A-share market.
From a formal perspective, this 65 million yuan reward payment was no longer written into the share transfer agreement but was separately formed into a Letter of Commitment. However, the court held that the change in document form did not change its actual nature. The court pointed out that although the reward clause in question differs from the typical "financier compensating the investor" scenario in valuation adjustment mechanisms, it was still linked to Chunli Medical's "valuation" (listing commitment), and after the target company achieved its listing goal, an "adjustment" was made in the form of the investor paying a cash reward to the target company's actual controller. Therefore, the court ultimately determined that the nature of the Letter of Commitment was a "valuation adjustment agreement."
It is worth noting that the court also observed that this arrangement did not appear in Chunli Medical's A-share IPO disclosure documents. In April 2020, Chunli Medical launched A-share listing counseling. In December of the same year, its STAR Market IPO application was accepted by the Shanghai Stock Exchange. In December 2021, Chunli Medical officially listed on the STAR Market. During the IPO review, the Shanghai Stock Exchange specifically asked whether the investors introduced by the company had signed valuation adjustment agreements or other interest arrangements with the company or its actual controller, and whether the relevant arrangements had been cleaned up. In June 2021, Chunli Medical and its sponsor Huatai United Securities, in response to the Shanghai Stock Exchange's first round of review inquiries, stated that Panmao Investment had no valuation adjustment agreement or other interest arrangements with the company or its actual controller. However, the court's trial found that the two sides had actually already signed the aforementioned Letter of Commitment. More notably, even though Chunli Medical submitted five versions of its prospectus during the A-share IPO stage, none of them mentioned this 65 million yuan reward payment arrangement.
During the trial, the court sent a letter to the Shanghai Stock Exchange regarding the relevant issues. The Shanghai Stock Exchange replied that based on the letter, it was difficult to determine whether the Letter of Commitment constituted a valuation adjustment agreement under the rules applicable during Chunli Medical's IPO review period. However, regarding whether it should have been disclosed during the IPO review process, the Shanghai Stock Exchange pointed out that since it had specifically inquired, Chunli Medical, Shi Chunbao, and other responsible parties should have but did not disclose the Letter of Commitment in their inquiry replies, which was clearly inconsistent with the facts and violated the provisions of the Review Rules. Given that the Letter of Commitment violated the information disclosure system, the court ruled that the Letter of Commitment was invalid from the time it was concluded, and Panmao Investment was not required to pay the 65 million yuan reward payment.
Shi Chunbao's 28-Year-Old Daughter Has Taken Over
Before this litigation outcome was reached, the dispute between Shi Chunbao and Panmao Investment over the 65 million yuan reward payment had lasted for years. In October 2022, Shi Chunbao applied to the China International Economic and Trade Arbitration Commission ("CIETAC") for arbitration, demanding that Panmao Investment pay the 65 million yuan reward under the Letter of Commitment. In May 2023, Panmao Investment applied to the Shanghai Financial Court to confirm the validity of the arbitration agreement. In November of the same year, the Shanghai Financial Court ruled that there was no valid arbitration agreement under the Letter of Commitment. In December 2023, CIETAC determined that it had no jurisdiction and terminated the arbitration proceedings. Subsequently, Shi Chunbao turned to the Beijing Tongzhou District People's Court to file a civil lawsuit.
On December 9, 2024, the Beijing Tongzhou District People's Court issued civil judgment (2024) Jing 0112 Min Chu No. 2272. Panmao Investment was dissatisfied and filed an appeal. The Beijing Third Intermediate People's Court, after trial, found that the original judgment had unclear basic facts and ruled to revoke the original judgment and remand for retrial. The Beijing Tongzhou District People's Court re-filed the case on May 29, 2025, and legally formed a collegial panel to hear this contract dispute case. The latest judgment is dated February 13, 2026, and was made public on July 20.
In the retrial case, Shi Chunbao demanded that Panmao Investment pay the 65 million yuan reward plus overdue interest. The interest was calculated from January 8, 2022, and as of December 31, 2023, was provisionally calculated at approximately 4.8859 million yuan. In addition, Shi Chunbao also demanded that Panmao Investment compensate 670,000 yuan in legal fees and bear litigation costs, 5,000 yuan in property preservation fees, and approximately 35,300 yuan in preservation insurance fees. Since the main debt of the 65 million yuan reward itself was not established, Shi Chunbao's claims for overdue interest and other litigation requests had no contractual basis, and the court did not support them. According to the judgment, if Shi Chunbao disagrees with the ruling, he may appeal to the Beijing Third Intermediate People's Court within 15 days from the date of service of the judgment.
From entrepreneurship to an "A+H" listing, although Shi Chunbao has withdrawn from Chunli Medical's management, he has maintained his status as actual controller. Public information shows that Shi Chunbao was born in 1970, now 56 years old. In his early years, he served as a plasma spraying technician at Beijing Heping Artificial Joint Factory, a sales representative in the sales department, and then sales department manager. In February 1998, he and his wife Yue Shujun, who worked in sales at the same factory, left to start their own business and co-founded Chunli Medical. On March 11, 2015, Chunli Medical listed on the Main Board of the Hong Kong Stock Exchange; on December 30, 2021, the company listed on the STAR Market of the Shanghai Stock Exchange, becoming the first "A+H" dual-listed company in the orthopedic medical device industry. In March 2022, Shi Chunbao resigned as Chairman and General Manager of Chunli Medical. This timing was not long after Chunli Medical's A-share listing. According to the 2025 annual report, Shi Chunbao currently serves as a director, Chairman of the Strategy Committee, core technical personnel, and Chief Engineer of Chunli Medical, while Yue Shujun serves as a director and Deputy General Manager. Shi Chunbao and Yue Shujun's daughter, Shi Wenling, took over as Chairman of Chunli Medical in June 2022, succeeding her father. Public information shows that Shi Wenling was born in January 1998, now 28 years old. She worked in ByteDance's user growth department in 2021 and joined Chunli Medical in March 2022. As of the end of June, Shi Chunbao and Yue Shujun together held approximately 56.22% of Chunli Medical's shares, making them the controlling shareholders and actual controllers. Meanwhile, Panmao Investment held 4.50%, making it the third largest shareholder, and it has never reduced its holdings since Chunli Medical's listing. Panmao Investment was established in June 2016 and is a RMB fund under CITIC Industrial Fund. Tianyancha information shows its actual controller is CITIC Securities.
Conclusion
The 65 million yuan reward payment was ultimately determined by the court to be a valuation adjustment agreement, and because it was not truthfully disclosed during Chunli Medical's A-share IPO review, the relevant agreement was ruled invalid. From arbitration to litigation, Shi Chunbao's pursuit of this payment has lasted for years and has still not received court support. Currently, Shi Chunbao remains the actual controller of Chunli Medical, while Panmao Investment continues to hold 4.50% of the company's shares, and this old account left over from before the IPO has temporarily come to a close.
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