Xunlei sues former CEO Chen Lei for 200 million: stayed abroad for five years without returning, audit exposes the path of fund maneuvering
Shenzhen court recently accepted a civil lawsuit filed by Xunlei and its subsidiary Wangxin Technology. The plaintiff is seeking 200 million in losses from former CEO Chen Lei and his core team, accusing them of hollowing out company assets through related-party transactions during their tenure. This dispute, which began in 2020, has not been resolved due to Chen Lei staying abroad, and the resumption of the civil lawsuit may reveal more insider information.
Shell companies attracted nearly 200 million
According to an internal investigation document from Xunlei in 2020, Chen Lei was accused of transferring funds by controlling the supplier 'Xing Ronghe (Shenzhen Xing Ronghe Technology Co., Ltd.)'. Business information indicates that this company, established in 2019, was initially arranged by Chen Lei for employees to hold shares on his behalf, and later underwent three changes in equity.
From 2019 to 2024, transferred to Zhao Yuqin, mother of Liu Chao, former management of Wangxin Technology (not involved in management)
Later transferred to Shenzhen Hong'en Technology Company at the price of 1 yuan (controlled by Dong Xue's relatives)
Despite Xingronghe having no actual office space, no professional team, and no external clients, it became the core supplier for Wangxin Technology, collecting nearly 200 million yuan in 'bandwidth service fees' over three years. The audit report pointed out that its pricing was significantly higher than market prices, and all fund approvals were ultimately confirmed by Chen Lei.
Interestingly, the website system and settlement platform of Xingronghe were all maintained for free by the technology team of Wangxin Technology. From March 31 to April 1, 2020, just three days before his dismissal, Chen Lei urgently approved a payment of over 20 million yuan to Xingronghe. During the same period, more than 30 core Xunlei employees were laid off and immediately reinstated at Xingronghe, raising suspicions of 'ghost employment.'
The power alliance surfaces
The close connection between the core figure of the case, Dong Xue (former senior vice president of Xunlei), and Chen Lei has attracted attention. Both were former Tencent employees, according to an investigation by Jiemian News:
In 2014, Dong Xue joined Xunlei with Chen Lei, rising from a Tencent employee with a monthly salary of 25,000 yuan to business director (monthly salary of 126,000 yuan), and later served as senior vice president (monthly salary of 550,000 yuan)
Insiders revealed that the two had an extramarital affair, which was 'common knowledge' within Xunlei, and they had an illegitimate child.
Chen Lei previously denied the rumors to the board as a 'Christian,' but it was revealed that he requested the office to install a Kingsize bed and an independent bathroom.
The funding operation chain shows that Dong Xue was directly responsible for the approval of Xingronghe's business, and his relatives actually controlled the company through multiple layers of representation. According to reports from Yicai, Dong Xue also arranged for two farmers from Hegang, Heilongjiang, to impersonate blockchain experts and collect consulting fees from Wangxin Technology, with funds actually transferred to bank cards held by him.
Five years of overseas detention became an obstacle to the case
In early April 2020, Chen Lei and Dong Xue were accused of using an overseas inspection opportunity to remain in the United States. On October 8 of the same year, Xunlei announced that Chen Lei was under investigation by the Shenzhen police for suspected embezzlement and called for him to return to cooperate with the investigation. However, by 2025, Chen Lei had still not appeared.
"Executives often use concealed methods such as shareholding representation and shell companies for crimes," analyzed Professor Zhu Wei from China University of Political Science and Law. "It is easier for suspects to destroy evidence after fleeing abroad, and cross-border evidence collection is restricted by judicial jurisdiction, making case investigation difficult."
Chen Lei had previously defended himself to the media, stating that Xingronghe 'did not generate any profits, and funds did not flow into personal pockets,' but Xunlei's audit found that 100% of the company's income came from Wangxin Technology, and all operating costs were borne by Xunlei.
Performance collapse and litigation tug-of-war
When Chen Lei took over as CEO in 2017, Xunlei's stock price soared due to blockchain concepts. However, during the three years in charge, the company accumulated losses of nearly 1 billion yuan, with core business in negative growth. In April 2020, the Xunlei board dismissed Chen Lei, and the new management initiated an internal review and filed a lawsuit.
Key timeline
2017.07 Chen Lei appointed CEO of Xunlei
2019.06 Xingronghe Company established
2020.03 Chen Lei urgently transferred over 20 million before his dismissal
2020.04 Chen Lei and Dong Xue have not returned from overseas
2020.10 Shenzhen police withdrew the case after filing it
2025.05 Shenzhen court accepted civil lawsuit