100 million in cash missing, company sues the actual controller! "China's No. 1 Mattress Stock" Xilinmen experiences a consecutive week of "explosive news," with the stock price evaporating nearly 1 billion

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On April 2, “China’s #1 mattress company” Xilinmen (rights protection) Health Sleep Technology Co., Ltd. (Xilinmen, 603008.SH) opened with a one-tick limit-down. As of the close that day, the stock was 13.68 yuan per share, with a market cap of 5.038 billion yuan. From last Friday’s (March 27) 16.3 yuan per share to the current price, the stock has累计 fallen by more than 16%, and its total market cap has shrunk by about 965 million yuan.

Behind the limit-down is the market’s concentrated reaction to a series of multiple announcements it released recently. Since last Friday, Xilinmen has successively disclosed multiple company matters, covering illegal transfers of 100 million yuan from a subsidiary’s bank account, the listed company suing its controlling shareholder and the actual controller, and the CSRC filing a case for Xilinmen and the actual controller, among other issues. A series of matters has also fully exposed its internal-control shortcomings and capital-risk issues.

On April 2, a reporter from The Paper (澎湃新闻) called Xilinmen’s company phone number. An insider said that, according to the information disclosed in the announcements, the illegal transfer of funds from the subsidiary’s bank account and the lawsuit against the controlling shareholder are two independent events, and they are currently in the corresponding investigation and filing stage.

1.00 billion yuan transferred away from a subsidiary’s bank account

On March 27, Xilinmen disclosed that recently the company found that funds in the bank account of its controlling subsidiary, Xitu Technology Co., Ltd., had been illegally transferred, with the total transferred amount reaching 100 million yuan. After its own review, the company found that the relevant personnel were suspected of illegally misappropriating company funds by taking advantage of their positions.

To further prevent risks to the safety of funds and to protect the listed company’s funds, Xilinmen stated in its announcement that it had, on March 26, 2026, applied to the public security authorities for case-filing and investigation, and would place possible related bank accounts under protective freezes. The protective judicial freeze amount is about 900 million yuan. Together, the two amounts exceed 1.0 billion yuan, accounting for 26.54% of the company’s latest audited net assets, and 42.69% of the company’s latest audited monetary funds.

Regarding the illegal transfer of funds from the subsidiary’s bank account, an insider at Xilinmen said that, at present, the specific personnel involved have not yet been finally confirmed, and the public security authorities’ investigation work is still ongoing. The subsequent outcome will be based on the announcements.

It is worth noting that the above matters also drew the attention of the Shanghai Stock Exchange and prompted it to issue a regulatory work letter. Xilinmen said it has promptly carried out a self-check on fund safety and strengthened its fund-safety control system. At the same time, it actively cooperates with the public security authorities in handling the case for investigation, to quickly recover the transferred funds, eliminate unsafe factors related to company account funds, and ensure the safety of the company’s property. In addition, the company will hold personnel accountable and carry out internal-control rectification, strengthen all directors and senior management personnel, as well as personnel in key positions, in learning laws and regulations, improve the awareness of standardized operations, and effectively enhance the company’s corporate governance and internal-control management capabilities, while strengthening the construction and implementation of internal control systems.

Controlling shareholder has been filed for a lawsuit

Just 5 days after the incident involving the illegal transfer of subsidiary funds was exposed, Xilinmen issued four more announcements, releasing progress on another core matter. On April 1, Xilinmen announced that on March 31 it received the “Notice of Acceptance of Cases” issued by the People’s Court of Yuecheng District, Shaoxing City (“2026” Zhejiang 0602 Min Chu No. 4695). Xilinmen and its two wholly owned subsidiaries, Zhejiang Shunxi Supply Chain Co., Ltd. (referred to as “Shunxi Company”) and Zhejiang Yingxi Supply Chain Management Co., Ltd. (referred to as “Yingxi Company”), brought a lawsuit in court on the grounds of a dispute over liability for harming the interests of the company. They named Xilinmen’s controlling shareholder Zhejiang Huayi Intelligent Manufacturing Co., Ltd., the party acting in concert Zhejiang Huahan Investment Co., Ltd., and the actual controller Chen Ayu as co-defendants, with the total amount involved at 478 million yuan. Currently, the relevant cases have already been filed and accepted by the court.

According to the litigation facts and reasons disclosed in the announcement, in 2026, for business needs, Xilinmen and its subsidiaries borrowed from banks. The controlling shareholder and its party acting in concert occupied 72 million yuan without repayment by using a loan-rolling business model. Among this, Xilinmen is involved with 15 million yuan, and Yingxi Company is involved with 57 million yuan. In addition, between 2025 and 2026, Xilinmen and its subsidiaries carried out factoring financing business. For the payments it had made to suppliers, the defendant used the factoring financing business model to apply for financing with the suppliers’ names to the bank. Ultimately, the funds flowed to the defendant and its designated accounts. Based on preliminary understanding, the defendants obtained total funds of about 406 million yuan.

The announcement shows that, as of the disclosure date, the balance of non-operating funds occupied by the controlling shareholder and its related parties totals 189.6 million yuan (this amount is based on the company’s initial statistics; the final amount will be based on the amount ultimately confirmed by further investigation and regulatory authorities). It has exceeded the absolute value of 5% of the company’s latest audited net assets. If the controlling shareholder and its related parties cannot complete settlement or rectification within 1 month, the company’s stock may face the risk of being subject to other risk warnings.

At the same time, the announcement discloses that some shares of the controlling shareholder, the actual controller, and their party acting in concert have been judicially frozen.

The announcement shows that Xilinmen’s controlling shareholder Huayi Intelligent Manufacturing holds 23.03% of the company’s shares. The number of shares judicially frozen this time accounts for 3.73% of the total shares it holds, and 0.86% of the company’s total share capital. The company’s actual controller Chen Ayu holds 2.20%. The number of shares judicially frozen this time accounts for 100.00% of the total shares it holds. One of the controlling shareholder’s parties acting in concert, Huahan Investment, holds 9.99% of the company’s shares; the number of shares judicially frozen this time accounts for 22.82% of the total shares it holds, and 2.28% of the company’s total share capital.

With the exposure of the lawsuit matters and the issue of capital occupation, Xilinmen’s controlling party and actual controller also face regulatory investigations filed by regulators. On April 1, Xilinmen disclosed in parallel that its actual controller Chen Ayu and the company both recently received the CSRC’s “Notice of Filing of a Case.” Due to suspected violations and irregularities in information disclosure, the CSRC decided to file investigations against the two parties separately.

Regarding the CSRC’s filed case matter, Xilinmen explained that this filing is targeted at the matters related to capital occupation and litigation, and is conducted separately for the two entities—the listed company and the actual controller. Therefore, both the company and the actual controller received the notice of filing.

Xilinmen stated in its announcement that during the period of the filing investigation, the company will actively cooperate with the CSRC’s investigation work and strictly fulfill its information disclosure obligations in a timely manner in accordance with relevant laws and regulations and regulatory requirements. As of the disclosure date of this announcement, the company’s production and business activities are operating normally, and the company’s directors and senior management personnel are currently performing their duties normally. The above matters will not have a major impact on the company’s production and operations.

Xilinmen’s official website shows that the company was founded in 1984. It is the first listed company in China’s mattress industry. It is currently defined as a health sleep technology company driven by technological innovation at its core. It has 7 major production bases globally and more than 5,200 stores.

Reporter at The Paper: Ji Simin

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