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On July 17, 2020, Bitmain issued a letter to all colleagues, stating that "the change of management of Century Cloud Core marks a new stage in the relationship between Bitmain and Zhan Ketuan. The company has no illusions about whether Zhan Ketuan can maintain the basic bottom line during the company's dispute resolution and ensure that the interests of customers, companies, employees and suppliers are not harmed.
The company is determined to restore the mining machine production supply chain to normal as soon as possible. To this end, it has started the operation of the second supply chain department to replace Century Cloud Core's original role in the group system before Century Cloud Core's business management order is restored. The company will continue to develop mining machines and AI chips, activate backup plans, and ensure that employees' labor rights are not harmed. "
In addition, the article pointed out that Zhan Ketuan spread the rumor that the executive directors of BitmainTech have been replaced by Zhan Ketuan and Li Qizhi since June 8. However, neither Cayman Bit nor BitmainTech has changed the executive directors, and the only director of Bitmain Tech is still Wu Jihan.
The full text is as follows:
A letter to all colleagues in Beijing Bitmain:
Since the last release of the "Letter to All Colleagues", the dispute between the company and Zhan Ketuan has continued to develop, and many colleagues have also asked about it. In view of the fact that all aspects of work have inevitably been affected, the company believes it is necessary to spend some space to further explain the cause and effect to all colleagues.
As the earliest Chinese translator of Satoshi Nakamoto's blockchain technology white paper, Mr. Wu Jihan invited Zhan Ketuan to cooperate in 2013 to introduce and promote the concept of blockchain. He asked Zhan Ketuan to organize a team to develop mining machine products and promised that after the development was successful, Zhan Ketuan and the technical team would hold the majority of the company's shares. Mr. Wu Jihan was employee No. 001 of the company, and Zhan Ketuan was employee No. 002 of the company. With the advent of the company's first generation of mining machines, Mr. Wu Jihan kept his promise, which is the origin of Zhan Ketuan's 60% stake in the company in the early days. However, Zhan Ketuan did not fulfill his equity commitment to the technical team, which led to the departure of the first generation of technical team members, including employee No. 004 of the company.
It was also at the beginning of the company's business that Mr. Wu Jihan proposed the "full customization" strategy for mining machines and persuaded Zhan Ketuan and the company team to implement it. As a result, the company developed ASIC chips and launched generations of iconic products, establishing its position in the industry. However, Zhan Ketuan once again failed to properly handle the distribution of interests with core technical personnel, which led to the departure of the core of the company's second-generation technical team, and instead became the company's main competitor.
In 2016, Mr. Wu Jihan also proposed that the company should expand its business and enter the field of AI, and the company has achieved success. However, as one of the earliest companies in China to carry out AI business, we have not been able to maintain our leading position. The reasons for this are well understood by colleagues who have gone through this journey with the company.
In 2017, with the explosion of the concept of digital assets, the company made rapid progress and became a hot industry star and unicorn enterprise. Unfortunately, Zhan Ketuan's leadership ability could not match the company's growth rate. Instead, he was extremely self-inflated. On the one hand, he blindly expanded the scale of personnel and launched projects beyond the company's technical capabilities, even launching nearly 200 projects at the same time. The company was overstaffed and the ineffective investment was shocking. On the other hand, he regarded the company as his own property and squandered the company's resources. In mid-2018, he ignored the industry environment of the bear market, overturned the company's established strategy, and insisted on producing chips that had been found to have defects during testing. Only one project wasted more than US$600 million. His management style was rough and he often insulted employees. Many colleagues had personal experience. The company sometimes even had some sympathy for the several "people" who gathered around him.
At the end of September 2018, the company discovered that there was a funding gap of several hundred million yuan in October. This was the first time that the company encountered the risk of a broken capital chain after the start-up period. Mr. Wu Jihan insisted that the company needed to cut costs and reduce its size, which led to serious disagreements with Zhan Ketuan.
The company had previously implemented a dual CEO system. In the early morning of December 17, 2018, Mr. Wu Jihan was on a business trip in Hong Kong, and Zhan Ketuan called and texted the management team members one by one, asking how they would choose if the company could only have one CEO. He also brought the management team to Fengdu Jiahe Hotel for a meeting that morning, demanding that he must be selected as the only CEO, and even threatened to cancel the options of colleagues who disagreed. But even so, most of the management team members still did not agree with him being the only CEO. Mr. Wu Jihan rushed back to Beijing and reached a compromise with him. Both parties promised to step down from the company's management, and the management team would select another CEO to lead the company. The company then elected a new CEO, initially shrunk and streamlined, and survived the first crisis.
However, Mr. Wu Jihan kept his promise and stepped down, but Zhan Ketuan immediately made a comeback, requiring the new CEO to report to him and make decisions by him, and even sidelined the new CEO, and the company fell into chaos again. In September 2019, the financial department estimated that the company's funding gap had reached 300 million US dollars by the end of October. The star enterprise that seemed to be in great glory to the outside world was actually on the verge of collapse, and the severity of the capital chain crisis this time was completely different from the previous one. As a result, the shareholders decided on October 28, 2019 to relieve Zhan Ketuan of his original position in the company.
Zhan Ketuan was unwilling to accept this, and on December 9, 2019, his holding entity convened a meeting of Cayman Bit shareholders again, proposing to reinstate Zhan Ketuan and continue to manage the company. However, at the meeting, all other shareholders, whether from inside or outside the company, disagreed with the proposal.
Looking back at the company's history is not to deny Zhan Ketuan's previous contributions to the company, but to clarify the source. It is easy for colleagues to understand that the removal of Zhan Ketuan from his position is not due to personal grudges, but a choice that Bitmain Group has to make in order to continue to survive and develop. The company's success is not only the contribution of the two founders, but also the result of the joint efforts of all colleagues. No one can override the company and act on his own. The company is not trying to prove that Zhan Ketuan has always been incompetent or that Mr. Wu Jihan has made every decision correctly. But for Zhan Tuan, especially his changes since 2017, the company's old employees have seen it. After his success, he has become so arrogant that he can't listen to any different opinions and can't extricate himself. He can share hardships but not happiness, which is exactly applicable to him.
After Mr. Wu Jihan returned, he devoted all his efforts to saving the company. The company's strategy was fully adjusted, and it re-adhered to customer first and developed products around market and customer needs, including the launch of the new star product Antminer S19 in March. As a result, in the first half of this year, the company achieved huge positive cash flow, not only quickly got out of the crisis, but also survived the special period of the epidemic and had a good eight months. I believe that all colleagues have their own feelings and judgments about the changes in all aspects of the company. Please also ask yourself, if the company is handed back to Zhan Ketuan for management, and the company atmosphere returns to the state of the first three quarters of last year, how long can the company last?
The original intention of the company to change the management was just to survive the crisis and develop, without any intention of revenge. Therefore, Zhan Ketuan's positions in Century Cloud Core, Fujian Maker and other companies were not changed at the end of 2019, and Zhou Feng's position as general manager of Shenzhen Century Cloud Core was retained, and he continued to be entrusted with important tasks.
However, Zhan Ketuan did not reflect on why he lost the recognition of the management team and other shareholders of Cayman Bit, but tried his best to interfere with and disrupt the company's business management order. In particular, after he obtained the company's business license temporarily through administrative reconsideration in May this year, he lied that the company's seal was lost and made and filed a new seal without authorization. Knowing that he had been relieved of all his original positions in Beijing Bit, Zhan Ketuan took advantage of the time when he was still registered as the legal representative of the company and the seals and certificates in his hands, and intensified his behavior:
He led security guards and outsiders to break into the company's office premises, attempting to hijack the company, exposing the company's assets, archives, documents, and trade secrets to possible embezzlement and leakage;
He changed the reserved seals of the bank accounts of the company and some of its subsidiaries, changed the online banking permissions, causing the company's bank accounts to be out of control and the financial department to be unable to operate. He also changed the company's tax registration, hindering the company's normal tax declaration and payment. The company's financial management was on the verge of paralysis, and it was unknown whether the loan could be repaid on time.
He filed a lawsuit to confirm that the 36% equity of Fujian Zhanhua belongs to him personally, and even issued a so-called power of attorney, trying to appoint lawyers to participate in the trial for the defendant Fujian Zhanhua and the third party Beijing Bit, so as to control both parties in the lawsuit. Fortunately, the judge saw through it and did not allow it;
With the cooperation of Zhou Feng and others, he obstructed Century Cloud Core from shipping according to the unified arrangement of the group, and even arbitrarily transferred and sold Century Cloud Core's inventory worth more than 100 million yuan through his personal shareholding company. The whereabouts of the proceeds from the sale are still unknown. At the same time, he owed suppliers money, even after Chongqing Silicon Yuan paid him more than 100 million yuan for the sake of customer interests, he still did so, seriously damaging the reputation of Century Cloud Core and Bitmain Group;
He made a wish to dismiss the company's mining farm employees, and tried to change the settings of some of the company's mining machines through individual employees. Fortunately, he was discovered and stopped in time. However, he recently "raided" the Zhenglanqi mining farm in the middle of the night and illegally transferred more than 10,000 supercomputing servers hosted in the mining farm. Their whereabouts are currently unknown and may have been resold.
He constantly harassed the company's service providers, trying to convince them to recognize that he could represent Beijing Bit. Fortunately, most service providers understood the company's actual situation and refused, but some service providers were temporarily deceived by him. He even took this opportunity to enter the company's server hosting room in the early morning of July 10 and personally unplugged the company's server network cables, causing some of the company's core departments to be unable to work to this day;
He got involved in the company's publicity tools, causing the company's WeChat public account to be out of control, the Weibo public account to be unable to be used normally, and even published the Shantai version of Bitmain's payment account, after-sales service website and email address;
What is particularly unacceptable is that he constantly harassed and threatened company employees, forcing them to work according to his instructions. When most of the company's employees refused, he issued many so-called suspension notices and labor termination notices, and even sent people to harass employees at their homes. After being stopped by the police, he then posted notices at the entrance of the employee community, exposing the employees' personal privacy. His behavior is extremely despicable.
Based on what Zhan Ketuan has done since he was dismissed, the company can only further cut ties with him and do its utmost to protect its own and employees’ rights and interests. Therefore, the company dismissed Zhan Ketuan and Zhou Feng from their original positions at Fujian Maker and Century Cloud Core, and announced this to Century Cloud Core colleagues on July 13. Compared with what he has done, Zhan Ketuan’s response of “don’t involve employees in shareholder struggles, and don’t let employees violate discipline because of this” is so hypocritical.
Zhan Ketuan spread rumors that since June 8, the executive directors of BitmainTech have been replaced by Zhan Ketuan and Li Qizhi. However, neither Cayman Bit nor BitmainTech has made such a decision, and the only director of Bitmain Tech is still Mr. Wu Jihan (see the attachment for the latest Bitmain Tech company registration information). Zhan Ketuan also tried to endorse it with the government's credit. However, for a company like Beijing Bit, the appointment and removal of management and legal representatives are matters of company autonomy rather than government approval. Zhan Ketuan's approach is certainly inappropriate.
Indeed, the change of Beijing Bit’s company registration information was fully obstructed by Zhan Ketuan, and the relevant work may not be completed overnight. The company has no intention of concealing it from colleagues. However, the company still believes that both administrative and judicial institutions will eventually maintain the bottom line of the rule of law and handle it impartially in accordance with the law.
The change in Century Cloud Core's management team marks a new phase in the relationship between the company and Zhan Ketuan. The company has no illusions about whether Zhan Ketuan can maintain the basic bottom line during the company's dispute resolution and ensure that the interests of customers, the company, employees and suppliers are not harmed.
The company is determined to restore the mining machine production supply chain to normal as soon as possible. To this end, it has started the operation of Supply Chain Department 2 to replace Century Cloud Core's original role in the group system before Century Cloud Core's business management order is restored.
The company is determined to ensure the stability of the mining pool business. It will decisively take all necessary legal measures to stop and punish anyone who disrupts the mining pool business, especially those that may affect the group's commitments to customers or the safety of the group's property.
The company is determined to continue to explore the research and development of mining machines and AI chips, keep its feet on the ground, and truly be guided by market and customer needs. It will also restore IT system support as soon as possible so that affected colleagues can return to work, and take measures to ensure that such incidents do not occur again.
The company is determined to implement the backup plan, fulfill its commitment to all colleagues, and ensure that the labor rights and interests of employees are not harmed.
The company is determined to take all necessary legal measures to investigate the responsibilities of relevant parties for damaging the company's interests, disrupting the company's order, and misappropriating the company's assets. It concerns the fundamental interests of the company. Every case is important to the company, and the company will resolutely push the legal process to the end. The company firmly believes that right and wrong will be judged by the public, the law must be followed, and violations will eventually pay a price.
Most importantly, Bitmain will never change its vision of becoming a world-class technology company, no matter when or where, and will move forward towards this goal unswervingly. To this end, Bitmain will continue to increase investment in research and development, remove obstacles and obstructions, retain and introduce talents, and ensure its leading position in the industry.
As the epidemic in Beijing is under control, the company will gradually resume on-site work, which is in line with the company's current business management needs and is believed to be supported by the vast majority of colleagues. Taking into account the actual situation at this stage, the management has decided to temporarily arrange for all colleagues to work in a temporary office area so that everyone can work with peace of mind and avoid friction or disputes with those who disrupt or undermine the company's management order as much as possible, which will unnecessarily increase everyone's pressure and burden.
It is no exaggeration to say that although Bitmain has come out of the crisis of broken capital chain in the fourth quarter of last year, it has come to the critical moment of life and death for the third time. This crisis is not caused by poor business operation, but by the destruction of corporate governance order. Bitmain is not afraid of any difficulties and challenges, but it must ensure its own operation. This will rely on all colleagues to continue to boost the morale since the fourth quarter of last year, insist on doing the right thing, fulfill their duties in their respective positions, and share weal and woe.
The sword is sharpened by grinding, and the fragrance of plum blossoms comes from the bitter cold. All the hardships and setbacks will only make Bitmain and all colleagues more mature and powerful. All colleagues shoulder the fate and future of the company. The company and BitmainTech once again express their deep gratitude to all colleagues for their understanding, support and dedication to Bitmain during this extraordinary period. We look forward to growing and thriving together with all colleagues! (Golden Finance) |
