A big seller revealed that he owed tens of millions in taxes?

After the honeymoon period, disputes between Dama and listed companies continued.

The "marriage" between Zebao and Xinghui shares has always attracted much attention. Similarly, the disputes between the two parties in recent years have also become a hot topic in the cross-border circle. However, some completely different opinions have been heard in the industry recently, concerning Zebao's taxation and the litigation between the two parties.

The big seller owed tens of millions in taxes and it turned out to be self-exposure?

Recently, Xinghui Co., Ltd. transferred 100% of the equity of Zebao's subsidiary SKL to Guangdong Xingyang Interactive Entertainment Technology Co., Ltd. (hereinafter referred to as "Xingyang Interactive Entertainment") for 100,000 yuan, which once again attracted the attention of industry insiders to both parties.

On the surface, Xinghui shares may just be dealing with a subsidiary that has been suffering from continuous losses, but a deeper look will reveal that things are not that simple.

SKL is a subsidiary of Zebao, mainly responsible for the procurement of e-commerce and the registration and operation of Amazon stores. It directly holds 100% of the equity of Hangzhou Zebao and STK, and indirectly holds 100% of the equity of Linyoutong through Hangzhou Zebao. And who is the buyer of SKL? Xingyang Interactive Entertainment, a company in which Xingye Investment (Cai Gengxi and his wife) holds 70% of the shares . It is equivalent to Xinghui Shares just replacing SKL with a controlling company at a very low price and separating it from the company.

But you have to know that SKL is a key member of Zebao's tax debt. According to the financial report of Xinghui Co., Ltd., SKL's taxes and fines between 2017 and 2021 totaled 6.4245 million euros (equivalent to about 4,956 yuan). Another Zebao subsidiary, STK, had a total of 2.3784 million US dollars (equivalent to about 17 million yuan) in taxes and fines between 2016 and 2021.

Legal documents show that the above-mentioned taxes in Italy and the United States totaling more than 60 million yuan were all proactively reported by Xinghui Co., Ltd. to the tax bureau (no feedback from peers has been received).

According to US tax law, when taxpayers voluntarily disclose their tax payments, they will only disclose taxes within the first four years. Taxes beyond the four years will be exempt from the obligation to pay, which is equivalent to directly turning the page.

However, the relevant overseas companies not only failed to negotiate with the local tax authorities on the amount of tax reduction and exemption, but also proactively confirmed through voluntary disclosure that they owed taxes for more than four years, indicating that they were willing to accept higher taxes, related penalties and interests ...

Xinghui shares have repeatedly stated that more than 80% of the above taxes and fines are taxes and corresponding fines that were not fully paid before 2018, and demanded that Sun Caijin and other relevant responsible parties bear the tax payment obligations. Xinghui shares also plans to wait until the tax compensation of Zebao founder Sun Caijin and others is paid before fulfilling the tax payment obligations.

Today, Xinghui Holdings has directly sold the tax-owing entity SKL, and some of Zebao’s overseas companies have ceased to exist, which also means that the tax-owing entity has been sold, and there is a possibility that the related companies will not be responsible for paying taxes.

According to people familiar with the matter, these tax defaulters are all small trading limited liability companies, which means they only have to bear liability for an amount corresponding to their investment, and some companies have not even made actual payments.

For example, two subsidiaries of Zebao, STK has an actual issued capital of only US$100,000, and ZBT has a registered capital of US$25,000, both of which are limited liability companies.

It voluntarily disclosed taxes that exceeded the deadline, was willing to accept higher fines and interest, and required Sun Caijin and other relevant parties to fulfill their tax payment obligations, but it continued to separate the tax-owing entities. What is Xinghui Co., Ltd.'s intention?

After many lawsuits, Xinghui shares are in trouble!

For a long time, the "marriage" with listed companies has been the dream of countless big sellers, but behind this is often a bloody reality. The honeymoon period after the marriage between Zebao and Xinghui Shares did not last long. The two sides began a years-long tug-of-war over disputes, but it is obvious that Xinghui Shares does not have the upper hand.

In April this year , Xinghui Co., Ltd. issued a notice letter to Sun Caijin and other related parties, continuing to claim that Sun Caijin and other related parties had failed to fulfill their performance commitments on the grounds of overseas tax issues. However, before this, the Shenzhen Qianhai Court had repeatedly ruled against Xinghui Co., Ltd.

According to the net profit requirements for 2018-2020 in the gambling agreement , Zebao's net profit in the three years must not be less than 108 million yuan, 145 million yuan and 190 million yuan respectively. Zebao has achieved all of them, with profits of 109 million yuan, 154 million yuan and 247 million yuan respectively in the three years.

However, Xinghui shares did not pay the bonus to Sun Caijin's team as agreed in the agreement. Instead, it hired a new accounting and law firm to recalculate Zebao's performance during the gambling period, stating that Zebao's performance during 2018-2019 did not meet the target, and required the other party to perform the performance compensation business in accordance with the agreement. This contradicts its previous announcement that "Zebao has completed its performance commitment."

Before this, the litigation between Xinghui Co., Ltd. and Sun Caijin had not stopped, but most of the related lawsuits mentioned by Xinghui Co., Ltd. against Sun Caijin ended in failure.

In July 2021, Cai Gengxi failed to release the pledge of 15 million shares of Xinghui shares in accordance with the "Transfer Agreement". Sun Caijin filed a lawsuit against Cai Gengxi, and the Shenzhen International Arbitration Court finally ruled that Cai Gengxi should compensate for the relevant losses. To date, Cai Gengxi needs to compensate Sun Caijin for more than 30 million yuan, and the court is currently enforcing Cai Gengxi's property.

In January 2023, Xinghui Co., Ltd. again reported the crime of contract fraud to the Foshan Public Security Bureau. During this period, Xinghui Co., Ltd. submitted a large amount of financial data and "evidence of brushing orders". On February 21, 2023, Sun Caijin accepted detailed questioning by the public security, and no case was filed after initial investigation.

In April 2024, there has been no progress in the 245 million lawsuit filed by executives in April for damaging the interests of the company.

On the one hand, there are constant litigation disputes with the founder Sun Caijin, and on the other hand, the development of Xinghui Shares itself is getting worse and worse.

Data shows that Xinghui shares continued to lose money in 2023, with a net profit of -76.09 million yuan. Since then, Xinghui shares have been losing money for three consecutive years, with net profits of -1.524 billion yuan and -260 million yuan in 2021 and 2022 respectively. In the first quarter of 2024, Xinghui shares continued the downward trend, with revenue of 360 million yuan and profit of only 4.65 million yuan, with both revenue and profit falling.

Zebao still carries the profit banner of Xinghui Shares, with a net profit increase of 158.293 million yuan in 2023 and a loss reduction of 71.52%. However, revenue has been shrinking in recent years, from 2.573 billion yuan in 2021 to 1.224 billion yuan in 2022, and then to 808 million yuan in 2023.

The turmoil of Zebao seems unable to save Xinghui Shares. According to industry insiders, 90% of Zebao's core staff have resigned. Salary is one of the reasons. Factory-style management and cross-border e-commerce management have led to the core team not being valued. Another major reason is that the original team members from Google and Apple have been replaced by factory personnel.

What was once a good card has now become a complete failure. How far can Zebao go under the leadership of Xinghui Shares?

Zebao

SKL

Xinghui Shares