More than 12 board members have simultaneously departed from Ximalaya’s domestic company, one of China’s most popular podcasting and digital audio platforms, according to Chinese business news outlet Jiemian. Among the 12 departures was Feng Hong, a co-founder and VP of Xiaomi.
Furthermore, a minority shareholder, Tianjin Jinxing Venture Capital, which is wholly owned by Xiaomi, withdrew RMB 314 million (USD 45.5 million) from Ximalaya, reducing its stake by 5.22%. Curiously, Tianjin Jinxing only just invested in Ximalaya for the first time in February.
Ximalaya responded by saying the changes were due to its variable interest entity (VIE) structure, and that domestic shareholders had transferred their ownership to Ximalaya’s overseas parent. The company also clarified it has no clear plans to go public.
A VIE is a legal business entity used by Chinese companies in sensitive or strategic sectors to sidestep restrictions on foreign investment. For instance, Alibaba uses the structure for its listing on the New York Stock Exchange.