China’s star electric vehicle maker claims former chief fled to the US after embezzling company funds
- YLE says it has filed several cases against its former chairman and major shareholder, as well as a former general manager involved in stealing US$175 million
- It alleges that the former chairman may have spent a portion of the stolen funds at casinos in Macau
A leading electric vehicle manufacturer in China has alleged that its former chairman and general manager together embezzled more than 1.2 billion yuan (US$175 million) from the company, with a considerable portion of that amount spent at casinos in Macau.
The company, Zhuhai Yinlong Energy (YLE), has been one of China’s shining stars in the new energy industry over the past few years. Leveraging on its strength in lithium battery development, YLE in 2016 received more than 3 billion yuan worth of investment from a consortium led by China’s “home appliance queen” Dong Mingzhu and former richest man Wang Jianlin’s Dalian Wanda Group.
The company ranked No 5 in sales of buses in the mainland in the first 11 months of 2018, tailing rivals including Shenzhen-based BYD, according to industry association data.
According to a statement posted on the company’s official WeChat account on Wednesday night, YLE had filed several cases against its major shareholder and former chairman Wei Yincang, and former general manager Sun Guohua. The cases had been accepted by related courts, and the duo’s encroachment of the company’s interests surpassed 1.2 billion yuan, it said.
“The company has confirmed that Wei left Hong Kong for the United States in December, but Sun has been barred from leaving the country,” said the statement.
“The company is checking on whether the former chairman Wei Yincang has indulged in gambling, taken company money to repay debts, and used a company-hired driver for the trips [to neighbouring Macau], as the media had reported,” it said.
Wei and Sun were removed from their positions in late 2017, but have kept their equity stakes in the company.
Wei has a 26 per cent stake in YLE, Sun controls 9.5 per cent, and Dong holds a 17.5 per cent interest.
YLE has been trapped in financial disputes with suppliers since early last year, due to delayed payments. It is also pursuing a US$20 million deal to take over of a unit under Singapore-listed and struggling electronics engineering firm Dragon Group International, The Straits Times reported on Saturday.
Dragon, whose stocks are suspended from trading, was placed on the Singapore Exchange’s watch list in 2015 and has faced delisting warnings.
More than 450 billion yuan has been injected into 70 new-energy vehicle projects in China in the recent years, motivated by the business success of US entrepreneur Elon Musk and his popular electric car brand Tesla, and pushed by Chinese government calls to curb emissions, according to an estimate by trade publication EvPartner.