Brave Heart
AFTER 15 YEARS IN THE LEGAL PROFESSION, YAN YIMING (EMBA 2004) IS FAMED AS A CHAMPION OF SHAREHOLDERS’ RIGHTS AND CORPORATE GOVERNANCE. HE ALSO PROVIDES AN INSPIRING MODEL FOR MANAGERS SEEKING TO BOTH ACHIEVE PROFITABILITY AND SHOULDER SOCIAL RESPONSIBILITY.
By Echo Zhou
An online search for the words "Yan Yiming" will flood your screen with news stories of this man's exploits, ranging from Yan's "Anti-Gu Chujun" campaign against a notorious con artist, his role as independent director of Guizhou Changzheng Electric Co. and most of all, his famous lawsuit against Guangxia (Yinchuan) Industry Co. for issuing false financial reports. The news stories have one theme in common: in all cases, Yan is heralded as a defender of the rights of small scale shareholders, able to take on the corrupt interests of Big Business. Small wonder that the 44-year-old has become a media darling. By all accounts, Yan is a rare hero in today's profit oriented business arena.
Yan was not always a champion of the underserved. Just 10 years ago, he was busy as a promising young attorney serving corporate clients at high market rates. Why then, did he expand his role to include protecting the rights of small shareholders for free?
In fact, a look at Yan's career track raises a number of questions for observers: How did he strike the balance between the dual roles of defender for small shareholders' rights and owner of a traditional law firm? After being named as a BusinessWeek 2002 "Star of Asia," why did he join the CEIBS EMBA program? And after successfully launching AllBright Law Offices, now a top-three ranked firm nationwide, why did he leave to start his own firm?
In the issue, The LINK caught up with Yan long enough for answers to these and other pressing questions.
TheLINK: After you co-founded AllBright Law Offices in 1999, it quickly became successful. Why did you start your own business in 2005?
YAN YIMING: Working in AllBright was good in terms of business development, but I didn't think a socially responsible lawyer should pursue the sole goal of business success. There were over 40 partners in AllBright then, so it was inevitable that some would differ with me on protecting small-shareholders' rights. I started my own firm in order to shoulder my social responsibilities.
TheLINK: Can you outline your 10-year journey defending shareholder rights?
YAN: I divide the ten years into three periods. First, the "Enlightenment" period of 1998 to 2001 when I published articles in the media and raised lawsuits even though I knew they would be rejected by the courts - just to raise public awareness of protecting rights.
Then from 2001 to 2005, I defended the Guangxia small shareholders' rights, through which I helped ensure revisions to Corporate Law and Securities Law.
Now, we have the "Truly Independent Directors campaign," from 2005 till now. Now, I seek to protect shareholders' rights by improving corporate governance of listed companies.
My belief is that China's economic opening will benefit Chinese society, including improving the judicial system. There might be problems in judicial reform, but these would eventually be solved. As a law professional, one should fully support the improvement of the legal system.
TheLINK: What is your current focus for promoting rule-of-law in China?
YAN: Now I am focused on the disclosure of government information. The Provisions of the People's Republic of China on the Disclosure of Government Information as decreed by the State Council have been in force since May 1. I've handed in requests to the city government of Fuyang and the Department of Public Health of Anhui province, demanding the release of crucial details in their handling of Hand, Foot and Mouth Disease (HFMD). In addition, I've turned in a request for information on the local environmental conditions of Fuyang to the Provincial Department of Environmental Protection of Anhui and Henan.
According to the Emergency Response Law, the government should compensate citizens for inappropriate handling of emergencies. I'm collecting all the information needed to determine whether there was fault on the part of the local government in the outbreak of HFMD in Fuyang.
My current plan is to devote two to three years to the issue of government information disclosure, working mainly in the fields of environmental protection, public health and public finances. To defend small shareholders' rights is part of the bigger goal of strengthening the rule of law.
TheLINK: Are you going to collaborate with media again?
YAN: Yes. In fact, the "Fuyang Incident" has attracted a lot of media attention. Reporters seek me out when I am linked to a hot news story.
TheLINK: How do you balance for-profit and non-profit work?
YAN: Our for-profit business includes client credit management and sales management, M&A work, and services related to company law and securities law. Our major clients are companies; half are Japanese-invested, the rest are domestic - and many of these are managed by CEIBS alumni. Currently I spend as much time on non-profit legal practice aimed to make social progress as I do on our for-profit services.
TheLINK: Only 1.5 in 1000 CEIBS alumni become a lawyer. Why did you join the CEIBS EMBA programme?
YAN: It is easy for me to communicate with and build trust with my fellow students. Friendship between alumni is helpful as we cooperate on lawsuits and, ultimately, win.
In studying for the EMBA at CEIBS, my chief aim was to gain training in economics, corporate management, and decision-making. The legal business is essentially consulting, providing solutions to important legal issues and strategic decisions. Only when you have a comprehensive understanding of corporate strategies can you wisely advise client companies. Currently there is a severe shortage of such talents in China.
TheLINK: You don't charge a cent for defending the rights of minor shareholders. Don't you think you are losing money?
YAN: Professional lawyers simply make a living by practicing law. But those pioneers defending social justice tend to be under great pressure if they get paid, so I will not charge a cent for this kind of case. Only after I succeeded in this did other lawyers follow. For example, in the case of Guangxia, one of the lawyers got paid RMB6 million for the lawsuit. Encouraged by such a large profit, more lawyers will try stock market rights lawsuits. That is exactly when I should retire.
I don't think of my social work in terms of losing money. In the long term, what I have done will bring me great social credit which would become a valuable asset.
TheLINK: What changes to the Chinese legal system do you predict in the near term?
YAN: The Disclosure of Government Information would urge administrative authorities to operate within the law; otherwise the annual reports of some departments would not be approved. I am convinced that this will happen one day.
TheLINK: What are your goals for your firm in the next three years?
YAN: My goal is to be a lawyer, broker and coach. Now I am trying to improve the professional level of young lawyers in my firm, and next I will do some marketing activities to build up their influence. Thus, the firm will steadily expand.
TheLINK: As a successful entrepreneur, please share your most important tips for success.
YAN: Be alert and keep an eye out for new opportunities. Also, you need to set strategic goals and plans and stick to them. With those principles in mind, you'll survive in any business.
Profile:
Yan Yiming (CEIBS EMBA 2004)
TITLE: Founder & Director of Shanghai Yan Yiming Law Firm,
Executive Director and Legal Consultant for CEIBS Alumni Finance & Investment Club
CAREER LANDMARKS1998 Sponsored by the Ministry of Justice for legal studies in Japan; Entrusted by shareholders to sue the board of directors of Hongguang Industry, China's first lawsuit brought by shareholders against a board of directors.
1999 Co-founds AllBright Law Offices.
2000 Entrusted by 1000 Shanghai shareholders to sue the Guangxia Corp. Result: the plaintiff received total compensation of ¥7.312 million in 2007.
2002 Selected as a "Top 10 Figure in China's Stock Market News" by
Shanghai Securities News.
2003 Selected as a 2002 "Star of Asia" by
BusinessWeek.
2004 Served as defence lawyer in the Zhou Zhengyi Case.
2005 Establishes Yan Yiming Law Firm.
2006 Successfully deposes Kelong Electronic Corp. President Gu Chujun, who had issued fake financial reports exaggerating earnings by ¥387 million from 2002 to 2004. Yan, who was a minor shareholder in the company, served as a champion of shareholder rights.
2007 Revenue for Yan Yiming Law Firm exceeds ¥10 million, becomes top-earning independent law firm in Shanghai. In the same year, Yan succeeds with high profile shareholder suit against Changzheng Electronic Corp., which was accused of proving false reports of profit increases.
