Shareholder Profit Distribution Dispute Involving a Manufacturing Company in Xiamen

Chen, a shareholder of Plaintiff Xiamen-based Manufacturing Co., Ltd., holds 25% of the company's shares. Since its establishment in 2020, the company has been profitable for five consecutive years and generated sufficient after-tax profits annually. As of the end of 2024, the company's accumulated undistributed profits reached 800 million yuan. In 10 of 2024, the company held a shareholders' meeting where Wang, the controlling shareholder holding 75% of shares, leveraged their voting power advantage to pass a resolution not to distribute profits from 2020 through 2024, instead allocating all profits to reinvestment in the company. Plaintiff Chen argued that the company's five-year track record of profitability satisfies the conditions for profit distribution. They alleged that the controlling shareholder abused their voting dominance by withholding profits over an extended period, thereby infringing upon the legitimate rights and interests of minority shareholders like themselves. Consequently, Chen filed a lawsuit requesting the company to distribute 200 million yuan in profits according to their shareholding ratio.

The court ruled that Defendant Xiamen [Company Name] Manufacturing Co., Ltd. shall distribute a profit of 200 ten thousand yuan to Plaintiff Chen within 10 days from the effective date of this judgment. Defendant shall bear all litigation and audit costs.