520 million yuan transaction involved in Yindou.com illegal fund-raising case, Yibang International's listing path may change

Ebang International, one of the three largest mining machine giants, was revealed to be involved in the illegal fund-raising case of "Yindou.com". For Ebang International, which is in a critical period of listing, the road to IPO may encounter twists and turns.

Recently, according to a report in China Business News, investors of Yindou.com discovered that there were large financial transactions between Yibang International Holdings Co., Ltd. (hereinafter referred to as "Yibang International") and Yindou.com, and pointed out that Yibang International suspected of using 520 million yuan of funds from Yindou.com to inflate sales revenue.

Investors revealed that Cui Hongwei, the wife of Li Yonggang, the actual controller of Yindou.com, had financial transactions worth hundreds of millions of yuan with Yibang International.

Wang Hongyong, executive director of Ebang International, told investors and regulators that Cui Hongwei purchased cloud computing servers from Ebang. Specifically, the payment for cloud computing servers at the end of November 2017 was 144.9 million yuan, and the deposit for servers in March was 389 million yuan. Of this, due to supply and delivery issues (the length of time from the order placement date to the delivery date), the company was unable to meet customer needs, and the 389 million yuan payment had been fully refunded.

It is worth noting that the prospectus of Ebang International shows that its revenue increased by 878% in 2017. Ebang International said that the high growth rate was due to the shift of business focus to BPU in 2017. Public data shows that in the years ending December 31, 2015, 2016 and 2017, Ebang International’s five largest customers were all BPU buyers, and the largest customer in each year accounted for 34.6%, 20.6% and 12.1% of the total revenue, respectively, with a total revenue of 978.699 million yuan. The single transaction of 144.9 million yuan completed by Cui Hongwei and Ebang Communication in 2017 accounted for 14.8% of the total revenue of the consolidated statement.

Investors believe that if the transaction with Cui Hongwei is suspected of inflating revenue, Yibang International's revenue in 2017 may be greatly reduced.

In addition to the large-scale financial transactions between Cui Hongwei and Yibang International, Yindou.com accountant Zhu Xiaolin also holds 1 million shares of Zhejiang Yibang Communication Technology Co., Ltd. (hereinafter referred to as "Yibang Communication") and is an investor of Hangzhou Yibang Hongfa Technology Co., Ltd. (hereinafter referred to as "Yibang Hongfa").

According to the prospectus of Yibang International, Yibang Hongfa is the absolute controlling shareholder of Yibang Communications, holding 99.9964% of the shares.

Previously, the Haidian Public Security Bureau reported that Zhu Moumou, an important suspect in the Yindou.com illegal fund-raising case, had fled abroad before the incident. The police have issued a red warrant for him through Interpol. Zhu Moumou should be Zhu Xiaolin.

On the evening of June 24, 2018, Ebang International Holdings, one of the world's top three digital currency mining machine (BPU) manufacturers, submitted its IPO prospectus in Hong Kong.

The prospectus shows that Ebang International's revenue mainly comes from blockchain and telecommunications equipment. In 2017, the revenue from blockchain was 925 million yuan, accounting for 94.6%, and the revenue from telecommunications equipment was 53.25 million yuan, accounting for 5.4%. The prospectus shows that Ebang International's revenue in 2015, 2016, and 2017 was 92.14 million yuan, 120 million yuan, and 978 million yuan respectively.