Russell Brown Wins "Novel" Judgment Against Edward Lehman

BEIJING and HONG KONG, December 13, 2011 -

LehmanBrown removes obstacle to developing its China accounting business

The High Court of Hong Kong has handed down a Judgment in favour of Russell Brown in the dispute between the shareholders in LehmanBrown Limited (”LehmanBrown”), a leading China accounting, taxation and business advisory firm. In what the Court described as a “novel” Judgment, the High Court ordered Edward Lehman and his wife, Karolina Lehman to give full proxy over their 50% shareholding in LehmanBrown within 5 days and to sell their shares to Effiscient at a price to be assessed.

The High Court of Hong Kong, presided over by Hon. Harris J., found in favour of Effiscient, (a company owned and controlled by Russell Brown and Zhou Han Brown), ordering “Lehman & Co.” Management Limited (a company owned and controlled by Edward Lehman and his wife, Karolina Lehman) to sell its shareholding in LehmanBrown to Effiscient for a price less damages and costs, to be assessed. At the same time Lehman & Co. had to hand over full proxy of its shareholder voting rights within 5 days of the handing down of the Judgment, thereby effectively and immediately excluding Lehman & Co. (and therefore Edward Lehman and his wife) from any decision-making in the running and operation of LehmanBrown, and handing full control of the company to its management led by Russell Brown.

The latest judgment handed down by the High Court on 15 November 2011, takes into account damages against Effiscient Limited, finding that Edward Lehman and his wife Karolina Lehman had misappropriated the Company’s trademarks in an attempt to damage the Company’s business and that Edward Lehman had also established a competing accounting firm, both of which were found to be highly and unfairly prejudicial to Effiscient’s interests in the Company. Edward Lehman and his wife were also found to have misappropriated Company funds and caused unnecessary damage to the company’s premise back in 2004.

Upon the handing down of the Judgment, Russell Brown, LehmanBrown’s Managing Partner and Fellow of the Chartered Institute of Management Accounts (CIMA) said, “The judgment in favour of Effiscient totally vindicates our firm stand against the prejudicial campaign by Edward Lehman, his wife and Lehman & Co against the individual members of the management team and their attempt to devalue LehmanBrown for their own interests. It also proves the legal recourse, via the Hong Kong judicial system, is a bona fide solution to cross border shareholder disputes.”

As part of the proceedings the court heard transcripts of the language and behaviour that Edward Lehman used during a meeting of the shareholders.

The case of the shareholders in LehmanBrown seeking legal recourse had extended for many years. Edward Lehman had already in December 2010 been found liable in defamation with damages to be assessed, and in April 2011 was found in contempt of court for breach of a High Court Injunction, where he narrowly avoided a prison sentence and was fined HKD200,000 and ordered to pay the Plaintiffs HKD400,000 against their costs.

On 8 December 2011, Effiscient commenced fresh committal proceedings against Edward Lehman as a consequence of further conduct by him which Effiscient alleges to be in further contempt of the High Court of Hong Kong.

About LehmanBrown

LehmanBrown is a leading China-focused accounting, taxation and business advisory firm. The company operates through offices in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin and Hong Kong, and employs around two hundred professionals throughout China, all of whom are English-Mandarin bi-lingual.

LehmanBrown is registered with the PCAOB in the USA. LehmanBrown is also an Accredited Employer and Training Partner of many top global accountancy institutes including the Association of Chartered Certified Accountants (ACCA), the Chartered Institute of Management Accountants (CIMA), the Institute of Chartered Accountants in England and Wales (ICAEW), the Hong Kong Institute of Certified Public Accountants (HKICPA) and CPA Australia. LehmanBrown was the first CPA firm awarded ACCA China-wide Approved Platinum Employer.

Visit www.lehmanbrown.com.

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