Involving over 1 billion, the original founder of Zebao and Xinghui Shares sued each other!

Before one crisis is over, another crisis arises.

In the cross-border circle, the "love-hate drama" between big sellers and listed companies seems to be always going on. The mess between Xunxing Shares and Jiazhilian has not been cleaned up yet, and now the original founder of Zebao and Xinghui Shares may go to court over "equity transfer disputes."

To recover 1 billion yuan, the original founder of Zebao was sued!

Recently, Zebao's parent company, Xinghui Precision Manufacturing Co., Ltd. (hereinafter referred to as "Xinghui Shares"), disclosed an announcement about the lawsuit. The content of the announcement showed that Xinghui Shares sued Zebao's original founders Sun Caijin, Zhu Jiajia and other stakeholders, demanding that Zebao's acquisition amount be reduced from 1.53 billion yuan to 430 million yuan, and the defendant Sun Caijin and others must return Xinghui Shares' 1.04 billion yuan acquisition amount.

Regarding the reasons for the lawsuit, Xinghui shares stated: "During the performance commitment period, the defendant Zebao's founder and his interest group manipulated Zebao to violate Amazon's regulations in order to achieve the performance commitment, which led to Amazon's account suspension and the company suffered huge losses. "

At the same time, Xinghui Co., Ltd. also stated that the assumption in the "Appraisal Report" that Zebao "continues to maintain its original business management model and continue to operate" is no longer valid, so it is required to return the purchase price.

In fact, this is not the first time that Xinghui Holdings has sued the former founder of Zebao.

As early as the beginning of 2022, Xinghui Co., Ltd. sued the original founder of Zebao and his persons acting in concert because Zebao's overseas subsidiaries were pursued for taxes by the US, German and French tax authorities, involving unpaid and overdue taxes totaling up to RMB 50 million. Therefore, Xinghui Co., Ltd. required Sun Caijin and others to fulfill the relevant compensation obligations in accordance with the gambling agreement.

Amid the dispute, Sun Caijin went to the China Securities Regulatory Commission, the Securities Regulatory Bureau and other relevant departments to report under his real name that Cai Gengxi, the actual controller of Xinghui Shares, was suspected of embezzling the assets of the listed company. This also brought the power struggle of the actual controller of Zebao to the table.

At that time, Sun Caijin's statement was: When Zebao was injected into Xinghui Shares at a price of 1.53 billion yuan, the actual controller of Xinghui Shares stated that the control of the listed company would be transferred to him in the future. However, Cai Gengxi later explicitly denied that there had been any promise to transfer actual control. Under the dispute over control, Sun Caijin finally decided to quit.

The original founder of Zebao also filed a lawsuit against Xinghui Shares. In April 2021, Sun Valley Company, controlled by Sun Caijin, filed a lawsuit against Xinghui Shares, demanding that it pay the cash consideration of 53.119 million yuan promised in the merger case.

In the litigation progress disclosed by Xinghui Co., Ltd. on June 17, 2022, it showed that it had received the "Civil Judgment" issued by the Shenzhen Intermediate People's Court of Guangdong Province, the content of which showed that Xinghui Co., Ltd. must pay RMB 53.119 million in cash consideration for the equity transfer to Sun Valley Company within five days from the date of the judgment's effectiveness .

The protagonist of this "wonderful fate" is the performance betting agreement signed by both parties in 2018.

The store closure trend became the fuse: Xinghui shares and Zebao are in a mess again

Founded in 2007, Zebao is one of the sellers that operates on Amazon in the boutique model. Its overseas business is mainly operated through four subsidiaries. As early as 2017, Zebao had less than 1,300 SKUs and its annual revenue had reached 1.743 billion yuan, of which 90% came from the Amazon platform.

Zebao, with its outstanding performance, naturally attracted the attention of many people in the industry, and Xinghui Co., Ltd. was one of them.

In 2018, Xinghui Shares negotiated with the founder team of Zebao to acquire Zebao, whose market value exceeded that of Xinghui Shares at the time, and set a merger transaction price of 1.53 billion yuan. As an additional condition, the two parties signed a three-year performance betting agreement, requiring Zebao to achieve net profits of no less than 108 million yuan, 145 million yuan and 190 million yuan in 2018, 2019 and 2020, respectively.

Zebao has lived up to expectations and completed the gambling agreement for three consecutive years, doubling its performance. Its net profits in 2018-2020 were 109 million yuan, 154 million yuan and 247 million yuan respectively. According to common sense, after Zebao completed the gambling, both parties should be happy.

But when the Amazon account ban wave hit in 2021, everything changed.

I still remember that many foreign media pointed out by name that RAVA Power, a subsidiary of Zebao , put winning cards in the express delivery sent to sellers, and accused Zebao of using the opportunity of returning coupons to consumers to manipulate reviews and obtain user information.

This incident affected six major brands of Zebao, including RAVPower , Taotronics, VAVA, Anjou, Sable, and Hootoo , with a total of 367 accounts blocked . Among them, the revenue of the blocked sites accounted for about 72.52% of Zebao's operating income on the Amazon platform in 2021. Based on the calculation that Zebao's total annual revenue on Amazon in 2021 was 2 billion yuan, the total revenue of Zebao's blocked sites last year may have been as high as 1.45 billion yuan.

As of the end of 2021, the balance of funds frozen at the above sites was 32.24 million yuan. Xinghui Co., Ltd. also made an impairment provision of 677 million yuan for the goodwill of the asset group where Zebao Technology is located , and made an inventory impairment provision of 416 million yuan for the inventory at the end of Zebao Technology . It can be seen that the Amazon account suspension incident has dealt a heavy blow to Zebao.

Of course, it is not just Zebao's revenue that has changed, but also the relationship between Zebao and Xinghui Shares, which should have been "close". Since 2021, the founder of Zebao has sued Xinghui Shares, and Xinghui Shares has sued the founder of Zebao, and the dispute between the two parties seems to have never stopped.

At the same time, after the management of Xinghui Co., Ltd. took over Zebao, the management level encountered difficulties in adapting to the local environment and the loss of talent was also very serious. An industry insider pointed out: " The major changes in the management and the Amazon crisis have planted huge hidden dangers for Zebao's future development. "

In fact, the dispute between Zebao and Xinghui shares is just a microcosm of e-commerce platforms. In recent years, there are many listed companies that have carried out capital operations on cross-border e-commerce sellers. After these e-commerce sellers were merged into listed companies, almost all of them were spared from Amazon's store closures last year, and their vitality was severely damaged. This seems to confirm the saying of industry insiders: "Once performance betting is involved, most of them do not have a good result."

As we mentioned before, Jiazhilian's 1 billion performance bet on Xunxing Co., Ltd. triggered a series of "black swan" events after the failure of the bet. The founder also fled overseas, and the huge performance compensation was difficult to recover. Of course, Xunxing Co., Ltd.'s e-commerce sector also failed to get out of the loss situation.

There is no doubt that these repeated incidents have undoubtedly taught the industry a very profound capital lesson. In the future, the exchanges between capital and cross-border sellers, performance betting, etc. may undergo certain changes.