From calling for a rescue to declaring bankruptcy, Quanyi took only 5 days

Latest news! Shenzhen Quanyi Cross-border Supply Chain Co., Ltd. (hereinafter referred to as "Quanyi"), which has recently caused heated discussions, has declared bankruptcy. At this time, the words of its head, Ms. Yao, "We will not go bankrupt, we will save the market." are still fresh in our minds. And it took only 5 days from her saying this to issuing the bankruptcy notice.

Recently, I believe that many sellers are discussing the issue of Quanyi raising millions of yuan to redeem goods. Yien.com also reported on this, "Thunderbolt! Shenzhen freight forwarder's capital chain broke, asking customers to raise 4 million to redeem goods" . When this happened, there was an uproar in the industry, and many people said that it was the first time they had seen such a rogue. In the comment area of ​​the article, a highly praised fan left a message to express his feelings after reading the article: "Anyway, I have no money, and you victims have to give me money to redeem the goods. I am not a rogue, I am being a hero to save the logistics market." "I am really ashamed for the person in charge." The fan finally sighed.

What is even more unexpected is that the person who had said with certainty that the market would be rescued and that the country would not go bankrupt was slapped in the face in just a few days.

In fact, Quanyi's bankruptcy was not without warning. For example, its former employees revealed that the company's office had long been deserted and there was a serious problem of wage arrears. For another example, someone revealed that after their on-site visit, they found that the new warehouse address announced by Quanyi was fake.

It is no secret that logistics service providers have changed their shells and reborn. Many logistics service providers operate by quickly changing to another company with another name to continue to collect goods after a company encounters an incident. Therefore, it is hard to guarantee that this incident will not happen again to Quanyi. In addition, Shenzhen Jinbaotong, another logistics company controlled by Ms. Yao, was widely discussed in the industry because of a transportation contract dispute with Banggu Technology, a South China giant.

Qichacha shows that Ms. Yao has as many as 16 personal risks, related risks and historical risks . It can be said that the problems of Ms. Yao and her logistics company have been around for a long time.

Filed for bankruptcy liquidation, former employees revealed that the company had long been deserted

On June 14, a "Notice of Company Bankruptcy" issued by Quanyi caught the sellers and freight forwarders who were still trying to find ways to get the stranded goods out of the port off guard.

Quanyi stated in the notice that due to various reasons such as the epidemic, the company's operations were in trouble, and a large amount of debts such as compensation and refunds were incurred. The company was unable to repay these debts and was in extreme financial difficulties. It was unable to maintain normal operations and could only declare bankruptcy. It has now applied for bankruptcy in court.

In the notice, Quanyi clarified three things:

1. Use the N+1 severance method for employees and pay severance pay;

2. The goods in transit will be abandoned and the customer will be compensated at the rate of 40 yuan/kg according to the lost goods compensation agreement ;

3. All channel fees and revenues payable to partners shall first be registered in full based on actual amounts incurred and paid.

Quanyi said that it is now necessary to register assets, claims and debts before the court sets up a liquidation team. The liquidation team set up by the court will verify the registration information. The actual compensation, indemnity and payment amount will be subject to the court's ruling. The registration deadline is July 15, 2022.

It is worth noting that Quanyi stated in the announcement that relevant level procedures must be handled in the office. However, according to the company's former employees, its office has long been empty.

Previously, when Quanyi issued a fundraising announcement for redemption of goods, it stated that the company's capital chain was broken. In the notice issued this time, Quanyi also clearly stated that the company's operations have been under great financial pressure since last year, and the management has been unable to resolve the problem by raising funds from various sources.

Quanyi’s financial difficulties were confirmed by revelations from its former employees.

Not long ago, Xiao Wei, who claimed to be a former customer service representative of Quanyigang, revealed that Quanyigang had been owing her salary for more than three months. "The HR department informed me that I didn't need to report to work after the holiday, and that I would be paid after the holiday. When I returned to Shenzhen after the holiday, the company was empty and there was no response when I asked about my salary."

At the same time, Xiao Wei also said that she was not the only one who was owed wages: "As long as (the employees) resigned or were fired, they would not get their wages. (Even) some colleagues who left the company did not get their wages paid for last year."

A former Quanyi employee who worked in the warehouse said he was also fired and owed wages for almost half a year. "Salaries started to be in arrears in October last year. We only got a little bit every month, even during the Chinese New Year."

At the same time, the former employee also reported that he currently cannot find Quanyi’s office location and the other party has blocked him.

In fact, Quanyi's bankruptcy was not sudden, but was planned in advance. In Xiaowei's revelations, she mentioned that when she went to the Labor Bureau to apply for mediation on June 8, no one from Quanyi showed up, and the staff of the Labor Bureau told her that Quanyi said it was going bankrupt and asked her to apply for labor arbitration.

In addition, this is not the first time that Quanyi has lost contact. In February this year , when the Longgang District People's Court of Shenzhen was handling a labor dispute case involving Quanyi, it said in the notice of delivery: "Because your whereabouts are unknown, the relevant legal documents cannot be delivered directly."

In addition, on June 5, Quanyi issued a notice of warehouse address change, saying that due to the sluggish market, declining business, and rising funds, in order to save costs, the warehouse will be changed from the first floor of C1 Building, Zhenhan Industrial City, Jihua Street, Longgang District, Shenzhen to the first floor of Manyixin Industrial Park, No. 5 Luogang Road, Longgang District, Shenzhen, starting from June 6. However, after an on-site visit, it was found that this was a false address. It was an abandoned industrial area that was to be renovated, and Quanyi's warehouse did not exist.

However, Ms. Yao, the actual controller of Quanyi, stated firmly in a conversation with Yine.com on June 9 that "the company will not go bankrupt and the market must be rescued." This is a bit intriguing.

The actual controller holds 6 logistics companies, with as many as 16 risk warnings

Those who have been following the Quanyi incident must have noticed that there is a person who is always closely tied to it, and that is Ms. Yao. According to Qichacha, although Ms. Yao is not the legal person of Quanyi, she is the actual controller behind it, holding 98% of the shares and serving as the company's executive director.

Ms. Yao controls more than just Quanyi. Through the equity penetration chart of Enterprise Check, we can see that the companies she controls also include Shenzhen Jinbaotong International Freight Forwarding Co., Ltd., Shenzhen Guangheshun Trading Co., Ltd., Guangzhou Wubao Jintong Supply Chain Management Co., Ltd. (deregistered), and Shenzhen Giraffe Large-scale Logistics Co., Ltd. At the same time, she also serves as the general manager and executive director of Shenzhen Huamei Yousu Freight Forwarding Co., Ltd. The business scope of these companies all involves logistics.

Through further inquiries, Ennet found that some of these companies have long been plagued by problems. Shenzhen Jinbaotong has the most problems. In 2020, it was hotly discussed in the industry due to a transportation contract dispute with Banggu Technology, a big seller in the industry. At present, Shenzhen Jinbaotong has 6 risks of its own, 4 related risks, and as many as 12 historical risks.

In terms of its own risks, it was listed as a person subject to enforcement by the People's Court of Longgang District, Shenzhen and the People's Court of Qianhai Cooperation Zone, Shenzhen in May and June of this year, respectively, and was enforced by the court for failure to perform its legal obligations. At the same time, it was sued four times for contract disputes and other civil cases from December 2020 to January 2022, the most recent of which occurred in January of this year, when it was sued by a Shenzhen logistics company for contract disputes.

In terms of historical risks, it was listed as a dishonest debtor by the court in September last year . At the same time, the company was restricted from high consumption because it failed to fulfill its legal obligations. In addition, it was listed as a debtor by the Longgang District People's Court of Shenzhen and the Longgang District People's Court of Shenzhen four times from September 2019 to September 2021, and was enforced by the court for failing to fulfill its legal obligations on time.

In addition, historical risks show that Shenzhen Huamei Yousu was also listed as a dishonest debtor by the court in May 2018, and was restricted from high consumption in November of the same year because the company itself failed to fulfill its legal obligations. Quanyi, which is at the center of this storm, was also sued in February this year for confirming the cause of labor relations dispute.

As the actual controller of these companies, Ms. Yao has as many as 16 personal risks ( 4), related risks (7), and historical risks (5).

In terms of her own risks, she was listed as a person subject to execution by the Shenzhen Longgang District People's Court and the Shenzhen Qianhai Cooperation Zone People's Court in May and June this year , with a total execution amount of 931,800 yuan. In addition, the historical persons subject to execution showed that she was also listed as a person subject to execution by the Shenzhen Bao'an District People's Court and the Shenzhen Longgang District People's Court in June and September last year, with a total execution amount of 229,100 yuan. Among them, one of the applicants for execution is Banggu Technology.

In terms of historical risks, she was listed as a dishonest person by the court in September last year , and was restricted from high consumption because she failed to fulfill her legal obligations. In addition, due to the transportation contract dispute between Shenzhen Jinbaotong and Banggu Technology, her equity in Guangzhou Jinbaotong International Freight Forwarding Co., Ltd. was frozen, with the equity amounting to 458,980,210 yuan.

According to Yien.com's observation, the vast majority of the risks faced by Ms. Yao were related to companies such as Shenzhen Jinbaotong.

According to Qichacha, Ms. Yao owns a total of 8 companies (Guangzhou Jinbaotong International Freight Forwarding Co., Ltd. has been cancelled), controls 6 companies, holds a position in 7 companies abroad, has overseas investments in 6 companies, and serves as the legal representative of 5 companies.

Small and medium-sized freight forwarders feel wronged after falling into a deep pit

According to statistics from Een.com, as of now, Quanyi has issued a total of four announcements /notices, namely the warehouse address change notice, the fundraising announcement for redeeming goods, the announcement of entrusting Ashmore to proceed with the fundraising for redeeming goods, and the company bankruptcy notice.

But it was these four announcements that allowed people in the industry to see how Quanyi went from actively raising money to redeem goods to quickly declaring bankruptcy in less than half a month.

The most widely discussed one is the one asking customers to "raise money to redeem the goods."

“——How many freight forwarders, how many cargo owners, and how many innocent families are implicated;

——Asking the owner to pay to redeem the goods, isn’t this a complete rogue?

——Here you are again, you are really a black sheep.”

But before people could get over the anger brought by this announcement, on June 7, Quanyi issued another announcement stating that due to the large number of customer groups and the complexity of large-scale lines, there were great disagreements and distrust in the crowdfunding process, resulting in no actual progress in the crowdfunding. Quanyi said that in order to address everyone's concerns, it commissioned Ashmore Optoelectronics Technology (Beijing) Co., Ltd. to promote the matter. All funds were collected by Ashmore and the progress was coordinated with it.

At the same time, the announcement stated that in the future, Quanyi's European oversized cargo routes will be commissioned by Ashmore and Beijing Walker. All the raised fees can be used to deduct shipments from Ashmore, 10% each time , until all the deductions are completed.

The announcement emphasized that Ashmore was committed to operating the entire business and handling subsequent matters if the crowdfunding was successful.

Many people were skeptical about Ashmore's reliability. However, when the freight forwarder was hesitating whether to trust this third-party company that suddenly appeared, on June 14, just one week after the announcement, Quanyi suddenly changed its attitude again, and this time directly released a "big move": announcing that it had filed for bankruptcy in court.

In the process of Quanyi going bankrupt, many sellers and freight forwarders have already stepped into a deep pit, especially the freight forwarders involved in the cargo stranded in Hong Kong this time, who are calling it unfair. Many freight forwarders said that because of Quanyi's operation, they have worked for a year or even longer in vain. Judging from the feedback in recent days, these freight forwarders who have stepped into the pit have lost a few thousand yuan at least, and as much as hundreds of thousands of yuan.

Among them, a freight forwarder said that they had two containers of goods that were affected, with a value of 500,000. Another freight forwarder said that he fell into the trap in December last year. Before shipping the goods, Quanyi agreed that Qatar Airways would deliver the goods within 25 days, and compensation of 1/kg would be paid for delays. However, it took 120 days in the end and arrived in mid-March this year. However, Quanyi refused to pay the debt, and finally caused them to compensate their customers for more than 90,000 yuan. Another seller told Ennet that his goods were also in that batch of goods stranded in Hong Kong, and he lost more than 6,000 US dollars including freight. "I entrusted them to transport in April. Normally, it would take 50 to 60 days from my shipment to the customer's receipt. But this time it was delayed. When I asked my freight forwarder, he first said on May 6 that the ship was late, and then on May 28 he said that the declaration was found to be inconsistent. Finally, on Tuesday (June 7), he suddenly told me that Quanyi's capital chain was broken."

As soon as Quanyi released the announcement of raising money to redeem the goods, a senior logistics company pointed out that Quanyi's operation would not succeed because the value of some goods is not as high as the freight. In addition, after the cabinets are delivered, there are also trailer fees, delivery fees, etc. If Quanyi has these fees, it will be another pitfall for those freight forwarders.

This concern is not without reason, because a freight forwarder has fallen into trouble here. The freight forwarder said that his goods were shipped in December and have now been cleared, but the goods are still in the overseas warehouse. This is because Quanyi did not pay the delivery fee and rent of the overseas warehouse, so others directly seized the goods.

As can be seen from the above, Quanyi’s problems have been around for a long time. Now that it has declared bankruptcy as a banker, it is conceivable how many small and medium-sized freight forwarders will be implicated. Some may have only worked for half a year or a year for nothing, and some relatively weaker ones are likely to go bankrupt as well. A senior logistics company with many years of experience said that Quanyi’s bankruptcy liquidation is equivalent to being a hooligan, and they have no assets to pay others.

Logistics service providers have been failing one after another. When will the chaos end?

In recent years, as the cross-border e-commerce industry has been booming, logistics companies of all sizes have sprung up like mushrooms after a rain, and competition in the logistics industry has continued to intensify. The industry has entered a period of reshuffle, and we have seen incredible things like Teng and Bang running away and withholding goods, and Quanyi will not be the last. In this process, small and medium-sized freight forwarders will face greater pressure.

In addition to these thundering incidents, we can see from many cases that when sellers have disputes with logistics companies, it is not so easy to resolve. Sellers often say: "They said a lot before delivery, but when something goes wrong, they made all kinds of excuses." Banggood Technology has learned this lesson.

As mentioned above, in 2020, Banggu Technology had a transportation contract dispute with Shenzhen Jinbaotong, which is controlled by Ms. Yao. Due to the delay, according to the agreement between the two parties, Jinbaotong needs to compensate Banggu Technology for more than 2 million yuan. However, because the amount of compensation is too large, Jinbaotong did not recognize the agreement signed in black and white, saying that it can only compensate 200,000 yuan, and it is not paid in cash, but needs to be deducted by shipping goods. Banggu Technology then sued Jinbaotong, and the lawsuit was filed in September 2020. According to the lawyer's opinion, Banggu Technology asked Jinbaotong to compensate more than 440,000 yuan.

The lawsuit lasted for a year, and Banggu Technology won the case. The judgment was received in October last year . However, the judgment received by Banggu Technology was only 160,000 yuan, which was much less than the compensation claimed by the lawyer and the gap was even greater than the amount stipulated in the agreement. In addition, in this lawsuit, Banggu Technology also had to pay more than 50,000 yuan in lawyer fees and other rights protection costs. After deducting the costs, it only received more than 110,000 yuan.

It is also worth noting that in the second-instance judgment, regarding the dispute over the amount of freight that Jinbaotong should refund, the court held that Jinbaotong had breached the contract in the process of performing the contract and should bear the liability for breach of contract. Banggu’s request for Jinbaotong to return the freight was essentially a claim that Jinbaotong should bear the liability for breach of contract based on the provisions of Article 9 of the contract in question, which had contractual and legal basis. However, it also stated that since the clause was essentially a breach of contract clause, according to Article 114 of the Contract Law of the People’s Republic of China, if the parties agreed on too high a liquidated damages, they could request the People’s Court to reduce it appropriately.

This also serves as a warning to the majority of sellers and freight forwarders that when signing relevant transportation agreements, they must not be misled by the high amount of compensation, because in actual judicial practice, excessively high liquidated damages agreed in the agreement will not be fully supported.

As a big seller, Banggood Technology has a hard time defending its rights in transportation agreement disputes. Some small and medium-sized sellers and freight forwarders have a harder time. Sometimes, when disputes occur, many freight forwarders often give up because the cost of defending their rights is higher than the amount of compensation. Therefore, it is important to learn how to avoid pitfalls when choosing a logistics provider. After consulting some professional logistics professionals in the industry, Ennet came up with several suggestions:

1. Disperse the logistics companies and do not entrust all the goods to the same logistics company for transportation. This way, if something goes wrong with one of them, you will not be unable to bear the losses.

2. There is nothing wrong with pursuing low prices, but you need to set a risk line to ensure that you can afford the loss. If you cannot afford it, choose a logistics company with higher prices and good market reputation.

3. When choosing a logistics company, you cannot simply judge their quality based on the size of the company and the time of registration.

Logistics is an important channel for cross-border sellers' goods to reach consumers smoothly. However, in recent years, there have been constant incidents of logistics companies running away, going bankrupt, and other incidents. Various disputes have occurred frequently during the delivery process. The common wish of sellers is that these chaos can be stopped as soon as possible.

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