Chinese court orders sale of shares on stuff site
01 Feb 2017
Alibaba’s (NYSE: BABA) popular c-to-c marketplace Xianyu continues to make headlines for unusual reasons.
The Intermediate People’s Court of Zhuhai recently ordered Wu Changjiang, founder of NVC Lighting Technology Corporation, the largest lighting manufacturer in China, to auction off his 130 million shares in the LED manufacturer Electech (Guangdong Dehao Runda Dianqi Gufen Youxian Gongsi) on the platform.
Mr. Wu was recently sentenced to 14 years in prison for financial improprieties, and the sale will be put towards his outstanding debt.
The 130 million shares will be sold in two separate auctions, one set at an initial price of RMB 43 million ($6.25 million U.S.), the other at RMB 35 million.
Xianyu competes with 58.com’s Zhuanzhuan and Tencent’s Xianbei platforms. Although Taobao is often dubbed “China’s EBay,” its sister platform Xianyu is diversifying rapidly and looks a more appropriate candidate for that analogy.
Somewhat ironically, NVC Lighting is a major client of Alibaba’s TMall platform.
This isn’t the first time that Xianyu has been used for this purpose. In November 2016, the High People’s Court of Zhejiang ordered that all assets and equity in Zhejiang Jintian Property Development Ltd. be auctioned off on Xianyu, to pay off outstanding debt owed to Zhejiang Qianjiang Shuili Ltd.
Initially listed at RMB 650 million, the total package eventually sold for RMB 1.3 billion, attracting 517 bids from four potential buyers.
A further two cases involving Xianyu, one from Guangdong and the other from Fujian, have been reported in the previous two months.