Briefing: Supplier takes Ofo to court over RMB 25 billion manufacturing bid
Jun 19, 2019
2.5亿标的无法执行 法院认定ofo“无财产” – Xinhua
What happened: A bike manufacturer in the northern Chinese city of Tianjin has taken bike rental company Ofo to court over a RMB 25 billion (around $3.6 billion) unfulfilled bicycle production bid. However, the court found that Ofo has no assets, including real estate, investments, or vehicles. In addition, the company’s bank accounts have been frozen by other courts. Since Ofo has no way to pay for the bid, enforcement has been suspended. As of Wednesday, Ofo has received more than 170 enforcements from courts around China. Several of the company’s executives have also been blacklisted, prohibiting them from buying high-class services in China, including first-class air travel and stays in luxury hotels.
Why important: Ofo has yet to refund 15 million users’ deposits, but still claims that the company is operating normally. Following reports of the company’s cash crunch, users have requested their deposits be returned en masse, with the company owing more than RMB 14 billion. In addition, Ofo reportedly owes billions to its suppliers. The latest court appearance draws even more attention to Ofo’s financial issues.