“Accountability is my top priority throughout this week,” declared one former employee, channeling the frustration of over 100 ex-staffers who have repeatedly petitioned Chinese courts to impose travel and high-consumption restrictions on Chen Haibo, founder and chairman of Shenlan Technology. The AI unicorn, once valued at ¥16 billion ($2.23 billion), now finds itself embroiled in a bitter labor dispute that threatens to tarnish its ambitious growth narrative.
Corporate Restructuring Meets Financial Contradictions
Multiple sources within a 100+ member WeChat group of former employees revealed systemic challenges at Shenlan AI (Shenzhen), which reportedly dissolved its entire workforce in March 2024. Compensation arrears allegedly exceed tens of millions of yuan, with delayed payments persisting despite a court-mediated agreement signed in 2023. Company leadership initially blamed capital flow complications from its reported backdoor listing preparations and multi-account financing structures – explanations met with widespread skepticism among affected staff.
Chen’s legal entanglement intensified when Shenzhen courts rejected his appeal to lift travel restrictions imposed due to unpaid salaries. The founder controversially distanced himself from operational responsibilities, claiming to be “merely an investor representative serving as nominal legal entity.” Court records reveal judges deemed Chen fundamentally responsible given his dual role as法定代表人 (legal representative) of both the Shenzhen subsidiary and Shanghai parent company.
Strategic Counteroffensive Raises Eyebrows
As labor disputes escalated, Shenlan adopted aggressive legal countermeasures against former employees. Multiple sources describe retaliatory lawsuits citing non-compete agreement violations, with one case demanding ¥1 million ($139,600) in damages despite HR communications explicitly waiving such restrictions. “This feels like intimidation tactics to silence whistleblowers,” a former project manager told CNBC under anonymity.
Funding Windfall vs. Operational Reality
The company’s recent announcement of a nine-figure Pre-IPO funding round (investors undisclosed) brought partial debt settlements but failed to quell concerns. Employees highlight glaring discrepancies between promotional materials and operational metrics: while investor decks touted billions in revenue, audited financials reportedly show 2022 revenues barely crossing ¥100 million ($13.96 million) with 95% debt-to-asset ratios. “Our Shenzhen division operated over a year without substantive contracts – just endless prototypes,” disclosed a former R&D lead.
IPO Ambitions Face Credibility Test
Having raised 12 funding rounds from heavyweight investors including Yunfeng Capital and Hua Ying Capital, Shenlan’s prolonged IPO delays now raise structural questions. Its 2023 attempt to acquire a listed shell company (Huamai Technology) stalled indefinitely, while employee lawsuits create fresh regulatory compliance risks. Industry analysts note the paradox: “When labor disputes reach this scale, it either signals acute cashflow mismanagement or deeper corporate governance issues – both red flags for public market investors,” commented TechNode Research Director Anton Lipov.
Neither Shenlan’s corporate office nor Chen responded to multiple interview requests. With employee activists vowing daily court filings until full payment, this unfolding drama presents a cautionary tale of China’s AI gold rush – where breakneck valuations sometimes outpace operational fundamentals.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/750.html
