On February 3rd, according to the auction information on Alibaba’s asset platform, 80% of a company’s equity in Jiangsu was sold for the price of 1 Yuan (Chinese currency). This news made it to the top of Baidu’s hot search list on February 6th.
The auction item displayed on Alibaba’s asset platform was the 80% equity of Yangzhou Kuai Supply Chain Management Co., Ltd. (Kuai Supply Chain Company), with the owner of the item being Wuxi Kuai De Culture Media Co., Ltd. (Kuai De Culture).
Only one person participated in this auction, with just one bidding record. The buyer’s bidding number was “Z3806” and their bid matched the starting price of 1 Yuan, which also eventually became the final transaction price.
According to a report by Red Star News on February 5th, Kuai Supply Chain Company was established in April 2023 with a registered capital of 1 million Yuan. The actual paid-up capital is unknown, and there are no insured employees. The controlling shareholder is Kuai De Culture (holding 80% of the shares), with an additional individual shareholder, Geng Lin (holding 20% of the shares).
Data also shows that Kuai De Culture was established in April 2023 with a registered capital of 1 million Yuan, similar to Kuai Supply Chain Company. The actual paid-up capital and the number of insured employees remain unknown. The 100% controlling shareholder is the individual Geng Lisheng, who is also the actual controller of Kuai Supply Chain Company.
The person in charge of the auction, Manager Ren, disclosed to Red Star News on February 5th that the starting price was determined based on the “Asset Value Adjustment Plan” and set through a normal and formal process. All relevant information that should have been disclosed is in the auction notice. Currently, the transfer of ownership has not taken place.
The announcement of the extremely low auction price sparked discussions among netizens.
“User DresdenRyze Dad” commented: “Buying equity for 1 Yuan may seem like a bargain, but the company’s debts and legal disputes are unclear. It could be a disaster if it turns out to be a trap.”
Another user, “loooooo123,” also expressed concerns: “Don’t get involved in lawsuits for just 1 Yuan. It’s already burdened with debts. It’s not a joke.”
However, netizen “364706587” argued: “I just checked, and the purchaser of equity in a bankruptcy auction does not need to repay the debts. Simply put, buy the shares and the debts are gone!!! Legal basis: According to relevant provisions of the People’s Republic of China Enterprise Bankruptcy Law, the purchaser of equity obtained through auction from a bankrupt company is not required to bear the debts of the bankrupt company.”
User “wolflwg” added: “A company buying its own controlling stake is just playing a game, right? The purpose is simple—avoiding debts and taxes.”