Shareholders May Soon Be Able to Sue Top Executives

China — A new rule, unprecedented in China , will allow shareholders to sue executives at listed firms.

The new rule that will complement the existing Company Law, sets up a litigation system for shareholders. Experts say the rule, if brought into effect, will help improve the stock market — where irregularities and crimes by top level executives have in the past led to significant losses for shareholders. Statistics showed that some 10 administrators from listed companies ran away with billions of yuan of public money from January 2003 to June 2004. ‘The cost of breaking the law is too small and these high administrators have taken advantage of the present legal loophole to make black money for themselves,’ said Zhao Xijun, a professor at the Financial and Securities Institute of Renmin University of China .

Under the new rule, should the board chairman or senior administrators misbehave, shareholders can ask the supervision committee of the listed firms to bring an accusation; when the supervision committee member is the wrongdoer, the shareholders can ask the directorate to file the lawsuit. When the supervision committee or the directorate gives up their litigation rights, shareholders can replace them to charge.

(Source: www.china.org.cn)

Sealed with a Click

China — Electronic signatures have recently become valid in China . This is to facilitate the growing online industry said the Ministry of Information Industry. The legal change gives electronic signatures the same standing as handwritten signatures and seals for business transactions said a ministry official. It also establishes a market access system for online certification providers to ensure e-commerce security.

Certification regulations have also come into effect to support the move. The accompanying regulations mainly cover the issue and management of licenses for online certification services, standardisation of service behaviour, handling of suspension or alteration of services, security, supervision and management; and penalties.

There are, however, concerns that the new law would not be effective as the encryption method used could be cracked. There has also been a call for the government to pay more attention to customer-to-customer e-commerce that is wrought with credibility problems. (Source: www.china.org.cn)

House Unanimously Passes Bill Named for Jessica Lunsford

US — On a 118-0 vote, the House passed legislation that would require longer prison sentences, lifetime probation and electronic monitoring for sex offenders convicted of crimes against children. The Florida Senate will take up a measure that would impose tougher penalties for sex offenders after the House of Representatives unanimously approved a similar bill in late April. The Jessica Lunsford Act was named for the nine-year-old girl found slain in February north of Tampa , Florida .

The bill would punish the molestation of children under 12 with a mandatory sentence of 25 years to life, ‘followed by probation or community control for the remainder of the person’s natural life and subject to a system of active electronic monitoring.’ The bill would also make it a third-degree felony in Florida to harbour a sex offender. Police in Homosassa where Jessica Lunsford was living initially arrested the half-sister of the man who murdered Lunsford and two others who were living at the half-sister’s home, accusing them of obstructing justice by failing to notify authorities that the murderer was living there . But prosecutors declined to file charges against the three, saying the withholding of information alone did not constitute a crime and there was no provision in Florida law that required someone to tell police of a sex offender’s whereabouts. Lawmakers say they want to close that loophole in the law. (Source: www.cnn.com)

Abuse Claim Parents ‘Cannot Sue’

UK — Three sets of parents who were wrongly accused of abusing their children cannot sue the health care professionals who misdiagnosed the children’s condition, ruled the Law 
Lords recently.

The children, one as young as two-months-old, were taken away by authorities when doctors suspected that they were being abused by their parents as they suffered from conditions such as allergic reactions and brittle bones. In another case, a mother who was misdiagnosed as having Munchausen’s Syndrome had her six-year-old taken away from her as he was ‘at risk’ from his mother.

The children were kept away from their parents for a period ranging from ten days to a period much longer than that.

As a consequence of having their children taken away from them, the parents suffered psychiatric damage and 
financial loss.

However, Lord Nicholls ruled that: ‘The doctor is charged with the protection of the child, not with the protection of the parent. The best interests of a child and his parent normally march hand-in-hand. But when considering whether something does not feel “quite right”, a doctor must be able to act single-mindedly in the interests of the child.’ (Source: news.bbc.co.uk)