[EpochTimesOctober292021]In August, Li Ziqi, the number one Internet celebrity in mainland China, said on Weibo that “capital is a good method”, which makes people wonder whether there is a capital dispute with the partner . Recently, this speculation was finally confirmed. On October 25, Li Ziqi formally sued Hangzhou Weinian.
Liu Tongming, the owner of Hangzhou Weinian, is called Li Ziqi’s Bole by the outside world. So why did Li Ziqi sue this Bole? A few days before the prosecution, Li Ziqi had successively accepted high-profile interviews with Xinhua News Agency and CCTV. Is this related to the subsequent lawsuits? Today we will talk about these topics.
According to the company’s investigation, on October 25, Sichuan Ziqi Culture Communication Co., Ltd. initiated a lawsuit against the major shareholder, Hangzhou Weinian Brand Management Co., Ltd., and the company’s principal Liu Tongming. The reason was the equity issue and the handling party was Sichuan Province. The Mianyang Intermediate Court, the case is still being transferred.
Hangzhou Weinian used to be Li Ziqi’s brokerage company. The two began to cooperate in September 2016. In July 2017, the two parties changed their cooperation model from the contract model to the joint venture model, and jointly established Ziqi Culture Company, Weinian Li Ziqi and Li Ziqi hold 51% and 49%, respectively. Li Ziqi is responsible for content production, and Weinian is responsible for operations and business.
With the rapid popularity of Li Ziqi’s short video, more than 100 million fans at home and abroad. And Wei Nian, with the help of Li Ziqi’s IP, has also achieved rapid expansion in the investment landscape.
After cooperating with Li Ziqi, Hangzhou Weinian was sought after by capital and completed 7 consecutive rounds of financing. Nian’s valuation in this round of investment is as high as RMB 5 billion.
In addition, according to the data from Tianyancha, among the 10 companies that Weinian invested abroad, except for Ziqi Culture, which was established in 2017, other companies were established after 2018. These companies involve food sales, cultural communication, and Agricultural science research and other fields.
Among them, Li Ziqi’s Tmall store opened in August 2018. Six days after it went online, this store with only 5 products at that time had a sales volume of 150,000 orders and a sales volume of 10 million. A year later, the Li Ziqi flagship store sold 21 products, and the sales volume exceeded 1.3 million, with total sales reaching 71 million yuan. Undoubtedly, Li Ziqi’s popularity has made a big contribution to sales.
Guangxi Xingliu Food Co., Ltd., which was established in July last year, also benefited from plum snail noodles, with monthly sales of 1 million pieces and annual sales of 500 million yuan.
In 2020, the sales scale of the Li Ziqi brand is approximately RMB 1.6 billion. On YouTube, Li Ziqi’s channel is just advertising revenue, reaching $500,000 per month.
According to sources from the investment circle quoted by the “Deep Net”, the reason why the two parties have to go to court today stems from a business loophole at the beginning of the business. At the beginning of the establishment of Ziqi Culture, according to the contract agreement between Li Ziqi and Wei Nian Originally, the main body and all rights and interests of Li Ziqi’s IP development and operation were placed under Ziqi’s culture, but at the initial stage of business development, due to various reasons, the two parties decided that the registration and operation of Li Ziqi’s IP brand e-commerce channels were both It was carried out through Wei Nian, the main body of the company, and agreed on a specific revenue share ratio for this purpose, which paved the way for the subsequent outbreak of contradictions.
For Li Ziqi, she believes that the main beneficiary of Li Ziqi’s IP brand should be Ziqi culture. Among them, Li Ziqi holds 49% of the shares and Weinian holds 51%. However, in actual development, the Li Ziqi snail lion powder IP brand The beneficiary of Xingliu is Guangxi Xingliu, of which Weinian accounts for 70% of the shares, while Li Ziqi holds zero shares.
In addition, the main body of Li Ziqi’s Tmall flagship store is also Weinian, and YouTube is also operating by Weinian. Li Ziqi does not hold any shares in Hangzhou Weinian.
However, Wei Nian believes that he has invested a team of about 500 people to fully serve the Li Ziqi IP brand, and Li Ziqi only needs to be responsible for his own video content. Wei Nian has also divided Li Ziqi according to the agreed ratio. Due to complexity With the financing history and shareholding structure, Wei Nian believes that it is difficult to add more shares to Li Ziqi.
There are views in support of Li Ziqi that Li Ziqi’s contribution is large, so it should hold more interests in the parent company, at least to get back the control of the Li Ziqi brand.
However, whether “Li Ziqi” allowed Wei Nian to gain both fame and fortune, or Wei Nian successfully operated Li Ziqi, there are still different opinions. An insider revealed that the original negotiation between the lawyers of the two sides on cooperation and disagreement had made some progress, but he did not expect that after more than two months, the conflict between Li Ziqi and Wei Nian would eventually become public.
Some online analysts believe that according to the current shareholding structure, it is difficult for Li Ziqi to win the lawsuit. Then let’s take a look at the three important percentages in Chinese company law: 67%, 51% and 34%.
According to the provisions of the Chinese Company Law, generally speaking, those who hold 67% of the equity often have absolute control over a company; shareholders who hold 51% have relative control; and those who hold more than 34% of the equity Someone has the right to veto. Of course, many companies now have more complex equity structures to control the right to speak, so we won’t say more here.
Regarding this issue of equity, Chen Xin, a professor at the School of Advanced Finance of Shanghai Jiaotong University, believes that Hangzhou Weinian holds 51% of Ziqi Culture and should have relative control. If Ziqi Culture’s articles of association do not provide special provisions, then Hangzhou Weinian has the power to forcibly remove Li Ziqi from his position and take over the company.
Moreover, as the supervisor of Ziqi Culture, Liu Tongming not only has the right to propose to convene an extraordinary shareholder meeting, but also has a series of powers such as checking the company’s finances and proposing shareholder meeting proposals, and can exercise checks and balances when Li Ziqi does not cooperate.
In addition, important monetization accounts such as Li Ziqi’s flagship store on Tmall and Li Ziqi’s YouTube account are registered by Hangzhou Weinian in the name of the company after signing the contract. They are not directly related to Li Ziqi. Legally, Hangzhou Weinian is completely Have the right to refuse Li Ziqi to log in to the relevant account.
This shows that with the existing corporate governance structure, Li Ziqi is quite weak in the game with Hangzhou Weinian. In other words, in the cooperative structure, Li Ziqi lost control of IP.
And the capital dispute between Li Ziqi and Weinian may ultimately be a result of both losses. Some industry insiders believe that if Li Ziqi wants to get back Li Ziqi’s account and brand ownership, it is necessary to prove that the two parties are in the process of cooperation. Obviously unreasonable in the arrangement of interests, and used his dominant position to obtain improper negotiation interests, or Li Ziqi needs to prove that in the follow-up cooperation, Wei Nian violated the original cooperation agreement and did not pay the relevant rights and interests. , And even damaged Li Ziqi’s brand in the cooperation.
And if Li Ziqi wants to terminate the contract with Weinian and start a new start, he may have underestimated the difficulty and cost of account operation and product operation. Some e-commerce strategists believe that Li Ziqi currently has hundreds of millions of fans, but he wants to To achieve the same magnitude, it may require investment of hundreds of millions of dollars, and the difficulty of commodity operation is also very large. Weinian has invested a professional team of hundreds of people in building the supply chain. Therefore, it does not mean that there must be good user attention if there is good content.
However, for Weinian, the impact is also inevitable. If the account and brand ownership are finally obtained, but without the content output of Li Ziqi, the Li Ziqi brand will lack vitality and there will be no room for future growth. In July of this year, ByteDance, which invested in Weinian, announced on October 16 that it would start the exit process.
Li Ziqi may become a major foreign propaganda?
In fact, since Li Ziqi became popular, it has been included by the CCP as part of the “Great Foreign Propaganda”. Over the years, Li Ziqi has been given a series of political titles, such as a member of the 13th All-China Youth Federation of the Communist Party of China, a promotion ambassador for the leader of Chinese rural youth to get rich, and a good young Chinese netizen.
In the days before Li Ziqi prosecuted Wei Nian, he made several high-profile appearances. On September 23, Li Ziqi participated in the Chinese Farmers’ Harvest Festival. He also said, “Li Ziqi used to build his own small courtyard. I want to build a sustainable, developable and spreadable new century for the Chinese people in the future. China’s New Countryside”. From this sentence with party stereotypes, we find that Li Ziqi, whose real name is Li Jiajia, uses “Li Ziqi” and “I” separately, which seems to be deliberately distinguishing himself from Li Ziqi.
On September 29, Li Ziqi accepted an exclusive interview with the Chinese Communist Party media Xinhua News Agency. The interview started with Li Ziqi’s pastoral style food video, emphasizing Li Ziqi’s international influence on Youtube. What’s interesting is that the host seems to have completely forgotten. However, the Chinese cannot see Youtube at all, because the Chinese Communist Party stipulates that it is illegal to use Youtube on the wall. On October 22, Li Ziqi accepted an exclusive interview with CCTV. In her interview, she mentioned “common prosperity” and sharing “positive energy”. It sounded more like the official propaganda tone of the Chinese Communist Party.
Some analysts believe that when Li Ziqi accepted the “high-standard” interview at this time, he may hope that in the process, he will obtain better bargaining chips and gain more say in equity and brand than before. Therefore, Li Ziqi Willing to cooperate. Three days later, Li Ziqi sued Hangzhou Weinian.
Some commentators believe that these interviews are carefully planned to promote the image and brand of Li Ziqi, and the title of the interview, called “Times Gave Me a Gust of Wind”, also seems to be praising the so-called CCP through Li Ziqi’s mouth. New Era”.
“World Chinese Weekly” published an article on September 30, mentioning that “if Li Ziqi’disappears’, the biggest loss will be overseas.” This is actually what the Chinese Communist Party wants to say. It does not want to be so effective. The big foreign propaganda disappeared. The BBC also reported last year that the “Chinese stories” spread in Li Ziqi’s films are far superior to cultural output such as the Confucius Institutes that the CCP has deliberately built with huge sums of money and the copying of party constitutions in the bridal chamber.
Some people say that one Li Ziqi is worth ten Central Propaganda Departments. Li Ziqi has more than 16 million fans on Youtube, and his subscriptions surpassed CNN’s 12 million. The number of fans of CGTN (China Global Television Network), the top brand of the Chinese Communist Party, is less than 3 million. There are many Westerners among Li Ziqi’s fans, so Li Ziqi’s amazing influence has attracted the propaganda department of the Chinese Communist Party.
As early as 2013, Xi Jinping put forward the guidelines of “telling Chinese stories well”, and Li Ziqi’s propaganda method has the effect of “invisible rain and wet clothes, silent flowers on the ground”. What the Central Propaganda Department wants to do but cannot do.
However, ordinary people who really live in rural China think that Li Ziqi’s video is too far from the real life in rural China. Li Ziqi herself also mentioned in the interview that she also yearns for the idyllic scenery in the video, but in order to make the video, she has not yet been able to enjoy this idyllic life.
In fact, the popularity of Li Ziqi’s video is because that kind of Taoyuan Wonderland is the inner pursuit of many people. At its root, it is a deep nostalgia for traditional Chinese culture. However, the so-called Chinese culture promoted by the CCP only attracts attention visually, but does not reflect the connotation of true traditional culture. Some critics even call Li Ziqi’s video a spiritual opium.
So what the outcome of this lawsuit between Li Ziqi and Wei Nian will be, we still have to wait and see.
Institute of Finance and Economics
Planning: Yu Wenming
Written by: Chen Siyu
Editor: Wei Ran, Yu Wenming
Producer: Wen Jing
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