Shenzhen Dama founder is under investigation? Here is his latest response

Last Friday, Cross-border Communication issued an announcement stating that the company recently learned from the public security authorities that the company's former chairman and general manager Xu Jiadong has been investigated by the Wanbailin Branch of the Taiyuan Public Security Bureau for suspected occupational embezzlement . After he resigned, the company discovered that he had committed crimes that infringed the company's interests during his tenure, which has now been investigated and verified by the public security authorities .

Once the announcement was issued, it quickly sparked heated discussions in the industry. Facing the accusation, Xu Jiadong, who was at the center of the topic, also quickly issued a statement saying that there was another hidden story. In order to learn more about the matter, Yien.com interviewed Xu Jiadong.

Xu Jiadong: Very shocked, false accusation and frame-up

In its announcement, Cross-Border Link disclosed that Xu Jiadong was suspected of embezzlement. Xu Jiadong said in his statement that he was shocked. Many people may have doubts about the reason for filing the case of "embezzlement".

Xu Jiadong said that since Global Easy Shopping was merged into Cross-Border Link in 2014, the business has developed rapidly and there is a large cash gap. Therefore, he and Yang Jianxin, the former actual controller of Cross-Border Link, have made equity pledge loans to the company. Over the years, the two have lent the company a total of about 1.91174 billion yuan. During this period, the company has returned part of the money to the two for repayment of equity pledges and other overdue debts.

" The company still owes me about 650 million yuan. These debts caused my brokerage to be unable to repay the money when it was due, and my stocks were forced to be auctioned . Currently, Cross-border Communication defines all the repayments from the company to me as embezzlement. " Xu Jiadong said in a statement: " The accusation of embezzlement of huge amounts of company assets is completely a false accusation. "

At the same time, Xu Jiadong pointed out in his statement that the investigation he was facing was due to the economic disputes and personal grudges between him and Yang Jianxin, the former actual controller of Cross-Border Link, and that Yang Jianxin had previously changed the charges and filed a case against him many times, but to no avail.

In the interview, Xu Jiadong explained: "In April 2021, Yang Jianxin falsely accused me of defrauding him of 15 million yuan to the Taiyuan Public Security Bureau. The Taiyuan Public Security Bureau sent police officers to Shenzhen to investigate in July 2021, which lasted until October 2021. In the end, the case was dropped because there was no evidence to prove a crime.

In September of the same year , in order to gain control of Global Easy Shopping's high-quality assets (apparel division, Zhaoqing warehouse, electronic website, distribution division assets, etc.), and then have me personally assume the supplier's payment debts, Yang Jianxin reported the case to the Xinzhou Municipal Public Security Bureau. At the end of January 2022, the Xinzhou Municipal Public Security Bureau arranged for a number of police officers to conduct a large-scale investigation and evidence collection at Global Easy Shopping, but in the end there was no evidence to prove that a crime had been committed.

Before the delisting of Cross-Border Link in 2022, Yang Jianxin asked me to reconcile with him. I answered his questions through an intermediary, but we were unable to reach a settlement. On September 28, 2022, the day the delisting took place, a large number of Shanxi economic investigation police officers came to Shenzhen for investigation.

From Xu Jiadong's statement, we can learn that before the media reported it, he did not know that he had been investigated for suspected embezzlement. In the interview, he also questioned: "Why has no one informed me that the case has been filed, and I have not seen the decision letter. Even if the case has been filed, how can the announcement of Cross-border Communication say that it has been verified before the judgment is made?"

Although the final outcome of the "occupational embezzlement" is still unknown, what is certain is that Xu Jiadong's transition from being a returnee PhD and founder of a billion-dollar company to being in trouble today is inseparable from one thing: backdoor listing. In the cross-border circle, such attempts to go public through backdoor listings that ended up in a mess are not isolated cases.

Returnee PhD started a business, but had to leave after going public

In the cross-border e-commerce industry, sellers with a high education background like Xu Jiadong are rare. Public information shows that Xu Jiadong graduated with a Ph.D. from the University of California, Davis.

In 2007, he founded GlobalE-Commerce, one of the earliest cross-border e-commerce platforms in China, with the halo of a returnee and a top student.

Riding on the dividends of the times, Global Easy Shopping has been rising rapidly. At the same time, the A-share listed company Baiyuan Pants Industry was going downhill. So it was natural to have the acquisition in 2014. That year, Baiyuan Pants Industry purchased 100% of the equity of Global Easy Shopping held by Xu Jiadong, Li Pengzhen, Tian Shaowu, Shenzhen Capital Group and Red Soil Venture Capital for 1.032 billion yuan, and changed its name to "Kuoguotong" the following year.

After the merger and listing, Global Easy Shopping became the most popular company. As the revenue pillar of Cross-Border Link, founder Xu Jiadong also joined Cross-Border Link in 2014 and served as the chairman and general manager of Cross-Border Link. From September to November 2018, he also briefly became the actual controller of Cross-Border Link.

In 2020, Cross-Border Communication's performance suddenly plummeted, and in May 2021, it was even issued a "delisting risk warning". The stock abbreviation was changed from "Cross-Border Communication" to "*ST Cross-Border". Shortly thereafter, Xu Jiadong applied to resign from the positions of Chairman and General Manager of Cross-Border Communication for personal reasons.

As of now, Xu Jiadong holds a 6.77% stake, making him the third largest shareholder of Cross-Border Link.

Although Xu Jiadong has resigned, there is one issue that has always attracted much attention and has been repeatedly mentioned in this incident, that is, the debts owed by suppliers.

In June 2021, Cross-border Communication issued an announcement that it planned to set up a special working group for the liquidation of Global Easy Shopping's debts and appointed Xu Jiadong as the head of the global debt liquidation working group. However, this resolution was rejected by Xu Jiadong at the time.

In this regard, Xu Jiadong said in this interview that he had already announced his resignation at that time. Whoever is responsible for the company management will solve the problem, and the responsibilities and rights are equal. "I don't know how to deal with the supplier debt later. At the beginning of my resignation, I suggested to solve part of the supplier debt by doing projects, but it was rejected."

"Global Easy Shopping's debts should be resolved with a development attitude, rather than stripping off all of Global Easy Shopping's high-quality assets and leaving a shell to go bankrupt."

Continuous explosions make it difficult for backdoor listings to end successfully

In the cross-border circle, the once hot backdoor listing has now become a mess. Now, not only Global Easybuy, but also the founders of Zebao and Jiazhilian are in trouble.

Last year, Zebao was still talked about by industry insiders as a typical example of a company that successfully completed a bet on backdoor listing, but a year later the situation took a sharp turn for the worse.

Since the beginning of this year, Xinghui Co., Ltd., the parent company of Zebao, has sued Zebao founder Sun Caijin twice. At the beginning of this year, Xinghui Co., Ltd. took Sun Caijin and his persons acting in concert to court because in the past few years, Zebao's overseas subsidiaries were pursued for taxes by the US, German and French tax authorities, and the unpaid and overdue taxes totaled up to RMB 50 million. Sun Caijin and his persons acting in concert and other parties to the restructuring performance bet were required to fulfill the relevant compensation obligations in accordance with the Agreement on Issuing Shares and Paying Cash to Purchase Assets.

In June, Zebao and its parent company Xinghui Co., Ltd. sued Sun Caijin, Zhu Jiajia and other stakeholders, demanding that the acquisition price of Zebao be reduced from 1.53 billion yuan to 430 million yuan, and that the defendant Sun Caijin and others return 1.04 billion yuan of the acquisition price of Xinghui Co., Ltd. The reason for the lawsuit was that the defendant failed to fulfill the performance commitment and violated Amazon's regulations, resulting in the account suspension. Xinghui Co., Ltd. suffered huge losses as a result, and Zebao could no longer maintain its original business model.

In the cross-border circle, the "love-hate relationship" between the founder of a cross-border e-commerce company and its parent company first took place between Xunxing Co., Ltd. and Jiazhilian. The huge compensation case of 1 billion yuan for cross-border e-commerce also first fell on Gan Qingcao and Zhu Ling, the founders of Jiazhilian.

At the beginning of the acquisition, Gan Qingcao and Xunxing Co., Ltd. signed a three-year cumulative net profit bet of 510 million yuan, but Jiazhilian ultimately failed to deliver on its promise. According to the performance compensation principle agreed in the "Profit Compensation Agreement", Gan Qingcao, Zhu Ling and Common Dream need to pay Xunxing Co., Ltd. the performance commitment compensation amount and impairment test compensation amount in cash, which is 1 billion yuan.

Gan Qingcao and his wife, who were eventually forced to pay 1 billion yuan in compensation, fled abroad.

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Cross-border communication