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royole technology showcased a stylish backpack embedded with a flexible oled screen at ces 2019. photo by wang zhen, china business news

on august 31, a reporter from the first financial daily exclusively learned from a former royole employee that liu zihong, the founder of royole technology, is no longer the chairman and ceo of royole technology, and he only has the status of a major shareholder in royole technology.

on the evening of august 30, liu zihong appeared in the audience of the 2024 us open women's singles match between zheng qinwen and niemeyer, which attracted attention. currently, royole technology is going through bankruptcy procedures due to arrears of employee wages, and liu zihong has been restricted from high consumption and restricted from leaving the country. on september 13, royole technology will hold its first creditors' meeting, and liu zihong, who is in the united states, may not attend.

on may 15, 2024, the shenzhen intermediate people's court accepted the bankruptcy liquidation applications of royole employees' creditors against shenzhen royole technology co., ltd. (hereinafter referred to as royole technology), shenzhen royole display technology co., ltd. (hereinafter referred to as royole display), and shenzhen royole electronics technology co., ltd. (hereinafter referred to as royole electronics) on the grounds of "inability to repay debts due and obvious lack of repayment ability", and appointed bankruptcy liquidation administrators for the above three cases on june 6, 2024.

a reporter from china business news learned that after the bankruptcy liquidation administrator accepted the appointment, he found that some employees of three royole companies were still working during the takeover investigation. in addition, royole display has a flexible display screen production line under its name. the production line needs to maintain liquid nitrogen, water and electricity supply to keep the production line running normally. at the same time, a large number of people are required to maintain the operation 24 hours a day. once the operation stops, the production line will be directly scrapped, causing the debtor's property value to depreciate.

therefore, considering the maintenance of production line value and the handling of property in the subsequent liquidation process, the above-mentioned bankruptcy liquidation administrator carried out the personnel placement and diversion work of royole group. on july 9, 2024, the above-mentioned administrator issued a notice announcing the first batch of employees who did not need to be hired in the bankruptcy procedure, a total of 77 people. from the date of the announcement, the labor relationship between royole group and these 77 employees was terminated in accordance with the law, and these employees were required to complete the handover work before leaving before july 15, 2024.

the reporter saw in the relevant documents that liu zihong was ranked first in the list of employees who did not need to be hired in the bankruptcy process of royole technology announced on july 9, and his work number at royole technology was "100001". this means that liu zihong, who was once the chairman and ceo of royole technology, is no longer an employee of royole technology. he only has the status of a major shareholder in royole technology.

tianyancha shows that in the equity structure of royole technology, liu zihong currently still holds 38.61% of the shares and is the largest shareholder; citic capital holds 6.05% and is the second largest shareholder; wei peng holds 4.97% and is the third largest shareholder; shenzhen capital investment group holds 4.64% and is the fourth largest shareholder; yu xiaojun holds 4.47% and is the fifth largest shareholder; in addition, shenzhen huigang investment partnership, shenzhen songhe venture capital, fan junchao, china merchants securities, qianhai equity investment fund, etc. are also shareholders of royole technology.

royole technology was once a unicorn company in the field of flexible displays. since the end of 2020, it has fallen into financial difficulties and began to operate at a minimum level (production line equipment was shut down or maintained in a weak power state) in april 2021. the above-mentioned former royole employee told the first financial reporter that royole technology has owed employees wages for nearly 20 months, and the amount of wages and options owed to employees exceeds 100 million yuan. on march 27, 2024, royole's employee creditors jointly submitted an application for bankruptcy liquidation of royole to the shenzhen intermediate people's court.

at present, the creditors of royole employees hope to push royole technology from bankruptcy liquidation to bankruptcy reorganization, and introduce bankruptcy reorganization investors as soon as possible to revitalize the remaining production lines of royole and make rational use of the production lines to achieve the transformation and development of royole after bankruptcy. according to the above-mentioned former royole employees, liu zihong refused to solve the company's problems through judicial procedures, causing the company to fall into a worse situation. this may be one of the important reasons why the administrator "cleared" him from the list of royole employees.

august 30 is the deadline for royole's creditors to declare their claims. after that, royole will hold its first creditors' meeting on september 13. as a rule of thumb, liu zihong, as the largest shareholder of royole technology, needs to attend royole's first creditors' meeting, and he also has the right to vote on the debt settlement plan. the aforementioned former royole employee believes that liu zihong, who is currently in the united states, may not necessarily attend royole's first creditors' meeting, and there is still uncertainty as to whether royole can move from bankruptcy liquidation to bankruptcy reorganization.

lawyer deng peiqi, director of the debt restructuring and pre-restructuring professional committee of the guangdong bankruptcy administrators association, told the first financial reporter that first of all, in a reorganization case, the draft reorganization plan is likely to involve the adjustment of shareholder rights and interests. as a major shareholder of royole, liu zihong's failure to attend the first creditors' meeting is obviously not conducive to safeguarding his own legitimate rights and interests. however, liu himself is in the united states, which does not mean that he will not attend the meeting. he can attend the meeting online or entrust a lawyer to attend the meeting on his behalf. secondly, if liu zihong does not attend the first creditors' meeting, it will not have much impact on the progress of the reorganization procedure, and the administrator will advance the procedure as planned. however, when the draft reorganization plan is voted on in the future, liu, as a major member of the investor group, will have a certain influence on the group's vote to pass the draft reorganization plan.