Regulator investigates Cloud Live as infighting between chairman, main shareholder escalates
Shenzhen-listed company previously known as Xiangeqing to be investigated for violation of information disclosure rules
China’s top securities regulator has opened an investigation into Shenzhen-listed Cloud Live Technology after an internal fight for control of the company escalated and left the office “inaccessible” to staff for a period of two weeks.
Cloud Live and the two people at the centre of the dispute – chairman and president Wang Yuhao, and controlling shareholder Meng Kai – have all received investigation notices from the China Securities Regulatory Commission (CSRC). They are suspected of violating information disclosure rules, a filing by the company to the Shenzhen bourse on Tuesday afternoon said.
Cloud Live, which was called Xiangeqing (湘鄂情) until 2014 when Meng attempted to take it out of the restaurant trade into cloud computing, has witnessed bitter infighting between the two men.
Meng relinquished his rights as a controlling shareholder to Wang in November 2015, after he and his company defaulted on debts worth several million yuan. He later claimed Wang was not repaying his personal debts as agreed, and sought to remove him as the chairman.
The company’s office was “controlled by a group of unidentified people from January 24 to February 6, causing staff to be unable to enter it”, a filing by the company on February 10 said.
Meng later said the group had consisted of security guards employed by him “to protect the assets of the listed company and the interests of shareholders”.
Cloud Live reported a net loss of 51 million yuan for 2016, a drop of 177.8 per cent from the previous year when it achieved net profit of 61.6 million yuan.
Though its name may suggest otherwise, the firm’s core business remains catering.