2Firsts Successfully Held "Preventing E-Cigarette Enterprise Debt Disputes and Criminal Risks" Workshop

On September 12, 2024, the "e-cigarette enterprise debt dispute and crime risk prevention training" hosted by lawyer Tang Shunliang, an industry compliance expert of 2Firsts, was successfully held at the Bao'an Center in Shenzhen. The seminar attracted more than 20 executives from well-known e-cigarette and related supply chain companies, aiming to guide companies on how to navigate industry changes, avoid potential debt and legal risks.

Experts lecturing and sharing in-depth experiences

The "e-cigarette company debt dispute and crime risk prevention training" was hosted by Guo Xiaoyu, COO and co-founder of 2Firsts, and delivered by Tang Shunliang, an expert with 20 years of experience in tobacco compliance and a research fellow at 2Firsts.

With the recent exposure of debt crises in multiple e-cigarette companies in recent years, financial reports of many listed companies have shown a significant year-on-year decline in net profits, and profit margins at the supply chain end have also been severely compressed. This seminar aims to provide senior executives of e-cigarette and supply chain companies with risk management strategies and tools to address the current challenges.

The lecture focuses on directly addressing industry pain points

This lecture mainly discussed the dissolution, liquidation, and bankruptcy issues that e-cigarette companies may face when exiting the market, as well as the criminal risks they may encounter. Lawyer Tang Shunliang provided a detailed interpretation of the company liquidation process, the applicable situations of compulsory liquidation and bankruptcy liquidation, as well as the conditions for "turning enforcement into bankruptcy." In addition, new e-cigarette transaction structure design and risk avoidance were also explored, providing a series of practical strategies and tools for companies.

If a company fails to liquidate in a timely manner, shareholders may bear legal responsibility. The ways for e-cigarette companies to exit the market include shareholders exiting and the company being dissolved, involving equity transfer, reduction of capital, merger, reorganization, etc. The liquidation process includes establishing a liquidation team, clearing debts, collecting assets, arranging for employees, disposing of property, and preparing a liquidation report.

Regarding the circumstances, applicants, courts of jurisdiction, and application documents for compulsory liquidation and bankruptcy liquidation.

Transfer to liquidation", that is the condition of transferring a case to bankruptcy review during the execution phase. Specific solutions are proposed for situations where liquidation is not possible.

The design of a new trading structure for e-cigarettes and risk avoidance is recommended to be achieved through deep cooperation, such as through commissioning development/cooperation agreements and procurement contracts, in order to avoid potential risks.

E-cigarette companies may face criminal risks including charges of illegal operation, producing and selling counterfeit products, smuggling, and other legal risks.

The management requirements for exporting e-cigarette products include compliance with the laws, regulations, and standards of the destination country or region, as well as measures to address quality and safety issues with exported products.

Chinese citizens committing crimes abroad fall under personal jurisdiction. If the crime committed overseas also violates Chinese criminal law, Chinese judicial authorities have the power to hold the individual criminally responsible.

In-depth exploration and collaboration for industry development

During the open discussion session, participants enthusiastically engaged in in-depth exchanges with Attorney Tang on hot topics such as the regulation of nicotine pouches, compliance of tobacco-like products, and the shipment of products to the US market. These discussions not only enhanced participants' understanding of the future development of the e-cigarette industry but also provided new insights for the industry's steady progress.

2Firsts is a leading global vaporization technology media and consultancy, providing the latest news, data, and insights for regulators, entrepreneurs, researchers, media, and other stakeholders worldwide. In the future, 2Firsts will continue to launch more specialized, high-quality industry events, dedicating efforts to promoting the standardized growth and sustainable development of the e-cigarette industry.

If you would like to learn more about our training programs or seek professional consulting services, please contact us at: info@2firsts.com.