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Shenzhen, China – The founder of Royole Technology, Liu Zihong, has been relieved of his position as chairman and CEO of the company, retaining only his status as a majority shareholder, according to recent reports. The news, which emerged on August 31, 2024, via IT Home, citing a report from First Financial Daily, indicates that Liu’s departure from the leadership role comes as the company navigates through bankruptcy proceedings.
Royole Technology, once a unicorn in the flexible display sector, has been facing financial turmoil, including allegations of failing to pay employee wages. The company, which Liu co-founded in 2012, has been making headlines for its innovative products, including the launch of the world’s first foldable smartphone, the FlexPai, in 2018.
Background of the Company
Royole Technology was established with the vision of pioneering the flexible display industry. The company quickly gained recognition and investment, becoming one of the fastest-growing unicorns globally. By May 2020, after completing its F round of funding, Royole was valued at a staggering $6 billion. However, the rapid growth appears to have come with significant financial challenges.
Liu Zihong’s Departure
The reports suggest that Liu Zihong’s departure from his executive roles was confirmed by former employees of the company. The shift in his status was notably coincide with his appearance at the 2024 U.S. Open Women’s Singles match between Zheng Qinwen and Niemeyer on August 30. During this time, Liu has been under restrictions, including limitations on high consumption and travel abroad.
Bankruptcy Proceedings
The company’s financial distress has escalated to the point where it is now undergoing bankruptcy proceedings. The Shenzhen Intermediate People’s Court announced on June 6 that it had accepted the bankruptcy liquidation case of Royole Technology. The court appointed the Guangdong Huashang Law Firm as the administrator for the company.
Creditors of Royole Technology have been directed to file their claims with the company’s administrator before August 30, 2024. The first creditors’ meeting is scheduled to take place on September 13, 2024, at the Shenzhen Intermediate People’s Court. Given Liu’s current location in the United States, it is uncertain whether he will attend the meeting.
Previous Bankruptcy Rumors
This is not the first time Royole Technology has faced bankruptcy rumors. In March of this year, similar reports emerged, prompting the company to issue a statement on April 1,否认ing that it had either applied for bankruptcy or entered bankruptcy procedures. The company claimed that it was still operational, and the bankruptcy rumors originated from a former employee who had filed a bankruptcy review application over an equity settlement dispute.
Impact and Future Outlook
The removal of Liu Zihong as chairman and CEO marks a significant shift in the company’s leadership structure. As Royole Technology continues to navigate through its financial challenges, the future of the company remains uncertain. The upcoming creditors’ meeting will likely shed more light on the company’s financial status and the next steps in its restructuring or liquidation process.
Royole Technology’s journey from a promising startup to a unicorn and now facing bankruptcy is a stark reminder of the volatile nature of the tech industry. As the company’s creditors and stakeholders await further developments, the fate of this once-promising innovator hangs in the balance.
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