Ofo claims operations are ‘normal’ despite bankruptcy application
Apr 3, 2019
In a post on microblogging platform Weibo Tuesday evening, troubled bike-rental company Ofo denied reports of impending bankruptcy and maintained that the company is “currently operating normally.”
“Related debts are in the process of being litigated or negotiated. Fake news seriously endangers Ofo’s operations…” the statement read in part. Ofo added that it’s already offered up “evidence” to authorities and reserves the right to pursue legal action.
Chinese media originally reported on Tuesday an entry on the national bankruptcy disclosure e-platform, which showed that an individual named Nie Yan filed a bankruptcy application for Beijing Baike Luoke Technology, Ofo’s domestic operator. The application to the People’s Court of Beijing’s Haidian District is dated Mar. 25.
According to an industry source cited by domestic outlet Yicai, however, an application for bankruptcy doesn’t necessarily mean that the company has begun legal proceedings. By law, a debtor is allowed seven days to raise objections after being notified of the case by the court.
But even if Beijing Baike Luoke Technology isn’t facing bankruptcy, the bike operator must still surmount a mountain of debt. In February, a Tianjin court froze RMB 1.45 million (about $220,000) of its assets after a supplier sued the company. In January and February, Ofo’s offshore operator Dongxia Datong Management and Consulting also failed to pay legal fines for close to 50 payment default cases, according to business intelligence platform Qichacha.
For months now, Ofo has been plagued by bankruptcy rumors and the all-too-real problem of returning millions of user deposits. That set the scene for a tongue-in-cheek post on one of Ofo’s Twitter accounts on April 1: “Everyone is getting their money back.”
An Ofo representative said that the apparent April Fool’s joke wasn’t the work of the company. When asked on April 2 whether the account had been hacked, she said that the company was still looking into the matter. The tweet has since been deleted.