From spotlights to trial court: Once the youngest VP at Huawei now stands trial for insider trading
Chinese e-scooter startup Niu’s CEO and founder Li Yinan stood trial on Monday in Shenzhen for illegal trading on insider information.
There have been rumors since the end of 2015 that Li is under the investigation of the China Securities Regulatory Committee (CSRC), but Niu denied them, saying Li was in the US recovering from illness. According to Caixin, Li has been detained by authorities in Shenzhen since June.
Li had an illustrious career prior to these allegations, becoming the vice-president of Huawei at age 27, serving as Baidu’s first CTO, working as the CEO of 12580, a service platform under China Mobile, and founding Harbour Networks, which was later acquired by Huawei. Li started Niu in May 2015, saying it would be his last venture.
His career development at Huawei was a legend. Getting into college at the age of 15, Li attained his master degree at the age of 23 and joined Huawei. Two years later, he’s already the head of Huawei’s central research branch and then became the youngest vice-president at Huawei at the age of 27.
It’s was said that Li was an “incredibly smart” engineer who can get all the gist of a new technology based on a three-minute briefing of a subordinate and presented all the essences of the new technology perfectly to other high executives at the board meeting right after.
Before he “betrayed” Huawei by bringing almost his entire team away and establishing Harbour Networks, he was regarded as one of the most possible candidates to Huawei’s founder and then CEO Ren Zhengfei. Huawei didn’t give him an easy time for being their competitor. Thus, eventually, the company was acquired by Huawei, and Li went on to work in a couple of companies, which he never got the same prestige again.
His latest position was the CEO of an e-scooter startup named Niu. Niu is a startup that aims to produce quality electric scooters for the Chinese market. It landed USD 50 million from investors including IDG, GGV and Sequoia last July. In a flash sale in October, Niu announced that it sold 20,000 units of its flagship N1 model in 15 hours and brought in 100 million RMB.
The illegal trading took place while Li was working at GSR Ventures, an investment firm he started in 2004. According to Caixin, Li contacted Li Xiaotao, the president of Huazhong CNC multiple times while the company was undergoing an M&A from February to May 2014, receiving tips that he then used to buy Huazhong stock.
In April 2014, he used the stock accounts of his sister to make around RMB 11.5 million (USD 1.7 million) in trades, earning around RMB five million. He also allegedly persuaded his sister to buy the same stock, earning around RMB 2.4 million.
Li has denied these charges, saying he wasn’t very well acquainted with the president of Huazhong CNC and that he never told his sister to buy the stocks.
(Top photo: N1 release. From toodaylab.com)
Originally published at www.allchinatech.com on March 16, 2016.