Xunlei has restarted legal proceedings against former CEO Lei Chen, accusing him of embezzling the company, claiming damages of up to 200 million yuan; Chen Lei left the country in 2020.
According to a report by Yicai on January 15, more than five years later, Xunlei and its subsidiary Wangxin Technology have filed a civil lawsuit against former CEO Lei Chen and his core team for 'disputes over liability for damaging the company's interests,' with claims amounting to 200 million yuan.
The case has been accepted and registered by the relevant court in Shenzhen.
According to a report by The Paper, in 2014, Chen Lei joined Xunlei as CTO and was promoted to CEO in 2017. In 2020, Xunlei removed him from his position on suspicion of embezzlement. Subsequently, the Shenzhen Public Security Bureau launched an investigation into Chen Lei and others for suspected embezzlement. To evade the investigation, Chen Lei and former Xunlei Senior Vice President Dong Xue have left the country.
On October 8, 2020, Xunlei issued an announcement stating that its former CEO, Chen Lei, had been placed under investigation by the Shenzhen Public Security Bureau on suspicion of embezzlement. In the announcement, Xunlei urged Chen Lei to return to China as soon as possible to cooperate with the investigation.
Informed sources within Xunlei told the media that during Chen Lei's tenure, he transferred assets by establishing external companies. He also behaved improperly within the company, having an inappropriate relationship with subordinate Dong Xue. Through fabricated transaction processes and falsified contracts, among other illegal means, he siphoned off company funds, involving a substantial amount of money.
The report stated that six years later, one of the main reasons Xunlei filed a lawsuit with the court is that it is challenging to obtain evidence when fighting against corruption internally within enterprises, especially regarding illegal activities by senior management. Moreover, since Chen Lei is overseas, the case proceedings will be more complex.
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