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Chinese game developer miHoYo, creator of Genshin Impact, sues Minmetals trust firm in a case of speculative investment gone bad

  • Shanghai-based miHoYo slapped Minmetals International Trust, a unit of state-owned China Minmetals Corp, with a lawsuit over a ‘business trust dispute’
  • The same Minmetals trust firm has been separately sued by Lilith Games, the Chinese creator of hit mobile game Rise of Kingdoms

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Genshin Impact creator miHoYo’s lawsuit reflects how even the wealthiest companies in China’s hi-tech sector must exercise prudence in speculative investments. Photo: Shutterstock
Ann Cao
Chinese video gaming company miHoYo, creator of hit action role-playing game Genshin Impact, has slapped a unit of state-owned metals and mineral trading giant China Minmetals Corp with a lawsuit that has triggered extensive local media coverage of the country’s business trust sector.
The dispute between Shanghai-based miHoYo and Minmetals International Trust (Mintrust) – a firm that provides capital, real estate, movable property and securities trusts – is expected to offer the latest glimpse into the country’s murky world of shadow banking, which has attracted so-called new money from affluent enterprises in internet services and video gaming, according to lawyers.

The “business trust dispute” was filed by miHoYo at the Chengzhong District People’s Court in Xining, a city in northwestern Qinghai province where Mintrust is headquartered, according to a notice by the court on June 22. The initial hearing of this case is scheduled on July 25.

While the court notice did not provide details, the phrasing of the dispute implies that miHoYo may have stepped on a landmine, referring to a default, in China’s wealth management market, according to lawyers. Mintrust has defaulted on at least 15 trust investment projects totalling 2.3 billion yuan, according to a report by Guangzhou-based The Time Weekly earlier this week.

A large poster of hit action role-playing game Genshin Impact, created by Shanghai-based developer miHoYo, is seen inside Ginza Station in Tokyo, Japan, on December 3, 2020. Photo: Shutterstock
A large poster of hit action role-playing game Genshin Impact, created by Shanghai-based developer miHoYo, is seen inside Ginza Station in Tokyo, Japan, on December 3, 2020. Photo: Shutterstock

Lilith Games, creator of hit mobile game Rise of Kingdoms and also based in Shanghai, separately sued Mintrust for a business trust dispute, according to another notice issued by the same court.

Trust investment firms like Mintrust generally raise money from rich investors by pledging high returns on their investment, which are used in various industrial and property projects. China’s property market, however, has deteriorated since May last year after policymakers and monetary authorities moved to cool the speculative fervour that underpinned it.
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