Micree Zhan, the co-founder and CEO of Bitmain who was ousted in a coup by fellow co-founder Jihan Wu last year, has filed a second lawsuit in an attempt to recover the shareholder power of which he was stripped in 2019.
Zhan Seeking to Reclaim his Status
Zhan’s suit, filed in Changle District court in China’s Fujian province in December, targets Bitmain’s fully-owned subsidiary Fujian Zhanhua Intelligence Technologies alongside Bitmain itself. The case itself has yet to be heard, with the first hearing delayed due to the coronavirus outbreak, meaning that details are so far thin on the ground, although court documents state that the case is related to a “shareholder qualification confirmation dispute.”
Given that Zhan’s shareholder power was vetoed when he was stripped of his directorship in October last year, it is very likely related to this.
Zhan has already won the first battle in this case, with the court siding with his request to freeze 36 percent of Fujian Zhanhua’s incorporated shares owned by Bitmain, worth $500,000.
Zhan Already Seeking Retribution
The case echoes the sentiments of another case filed by Zhan in December last year in the Cayman Islands, which detailed the extraordinary events that Wu’s reemergence on the scene last October and Zhan’s removal.
At the time, Zhan had been attending a conference in London on behalf of Bitmain. Using Zhan’s absence to his advantage, Wu managed to get the board to convene and remove Zhan from his position as director in his absence.
Zhan’s Cayman Islands claim argues that the meeting was intentionally held in his absence, and that, as a major shareholder, he should have been informed about it. As a result, he is seeking to use Cayman Islands law to get the decision to remove him overturned.
Unseemly Power Struggle Will Impact IPO
The unseemly power struggle at Bitmain will do little to improve the desirability of their IPO, which came under scrutiny in January this year when it was discovered that the Department of Justice was looking into their alleged sale of mining equipment to Bitcoin Ponzi scheme BitClub.
For the time being the IPO seems to still be going ahead, although these legal battles will not reflect well on the organisation, with potential investors demanding clarification on who exactly is in charge at the company before putting a cent into the company.