Every Daily Hot Comment | Xilinmen's Door Was "Pried Open" by an Insider: Three Questions About the 100 Million Yuan Investment In and Out

Question to AI: How do regulatory blind spots in parent companies lead to losses of hundreds of millions?

Commentator: Du Hengfeng

On March 27, the listed company Xilinmen announced that it had discovered that its subsidiary, Xitu Technology, was involved in internal personnel allegedly misappropriating funds using their positions, resulting in up to 100 million yuan being illegally transferred from bank accounts. To further prevent financial safety risks, the company has protective frozen relevant bank accounts that may be involved, with the amount of protective judicial freezing exceeding 900 million yuan.

Currently, Xilinmen has disclosed relatively little information about the incident, but based on the company’s announcement and business information, three key questions regarding the illegal transfer of 100 million yuan have emerged, which are worthy of investors’ attention and the company’s focus.

The first question: Where did the 100 million yuan come from?

Xilinmen’s cash is mainly concentrated in the parent company, but the total amount of funds deposited in over 30 subsidiaries is also very substantial. In the semi-annual report for 2025, the company’s consolidated financial statements show that there are monetary funds of 1.972 billion yuan, while the parent company’s financial statements show monetary funds of 1.444 billion yuan, with a difference of about 530 million yuan, which roughly represents the funds deposited in subsidiaries (not considering consolidation offsets of fund exchanges, etc.). The annual reports from 2021 to 2024 show that this difference ranges between 540 million yuan and 870 million yuan. The funds that Xilinmen has seen illegally transferred and frozen are all from subsidiary accounts, totaling over 1 billion yuan, marking the highest period of fund accumulation in subsidiaries in recent years.

Xitu Technology was officially established in January 2021 and is considered a relatively new subsidiary within the Xilinmen system, with a registered capital of 50 million yuan. The account of Shaoxing Xinxin, which was frozen for about 80 million yuan, was established in October 2022, with a registered capital of 10 million yuan. In regular reports, the presence of Xitu Technology and Shaoxing Xinxin is not strong; they do not belong to Xilinmen’s “important subsidiaries.” In other words, the assets, revenue, or net profit of these two companies account for no more than 10% of Xilinmen’s total. Apart from the initial investment funds, where these funds come from—whether formed by business accumulation or obtained through financing—can only be truly managed for the safety of subsidiary funds once Xilinmen understands the source of the funds.

The second question: Who manages the massive funds?

According to annual report information compiled by Tianyancha, Xitu Technology had 64 insured persons in 2021, and Xilinmen assigned the strategic mission to Xitu Technology to be responsible for the development and expansion of hotel channel business. However, after that, the number of insured persons at Xitu Technology continued to decline, dropping to 8 by 2024. Both Shaoxing Xinxin and another company, Xiyue Sales, which also had its funds frozen, had similarly low numbers of insured persons. At the same time, key personnel in these subsidiaries are few; for example, Xiyue Sales has over 800 million yuan in its accounts, yet its legal representative, director, and manager are all held by Zhu. I found that key personnel in the subsidiaries do not hold positions in the listed company’s board or senior management, indicating a low hierarchy.

Xilinmen’s announcement states that the transferred funds “total 100 million yuan,” implying that the transfers occurred more than once, and the parent company did not detect it after the first incident. The small number of personnel in subsidiaries leads to a lack of effective checks and balances for large fund transfers, with excessive personal authority being a common reason for financial loss of control; the low hierarchy of core personnel in subsidiaries makes it easy for the parent company’s oversight to have blind spots, resulting in management loss of control. In the latest announcement, Xilinmen stated that it would strengthen the legal and regulatory education of all directors, senior executives, and key personnel, but this is merely formal; for subsidiaries managing massive funds, the parent company should dispatch higher-level personnel to concurrently hold key positions and take a hands-on approach to effectively prevent similar issues.

The third question: Where did the funds go?

Xilinmen stated that the company has established communication channels with relevant parties and is actively negotiating the return of the transferred funds. This indicates that the first layer of the funds’ destination is very clear. The illegal transferred funds should ideally be returned along the original route, but Xilinmen also indicated that “the recovery process still has certain uncertainties.” The reason for this uncertainty could be that the payee has transferred the funds again, with the perpetrators having the intent of unlawful possession; it is also possible that the payee has business or financial dealings with Xitu Technology and believes the funds to be legally theirs, thus refusing to return them. Of course, there could be other possibilities, but whichever the case, it indicates that Xilinmen has been negligent in supervising the finances and business of its subsidiaries.

With numerous subsidiaries, Xilinmen has adopted a strategy of “strong branches and weak roots.” A simple calculation shows that from 2021 to 2024, the ratio of revenue amounts in the parent company’s financial statements to the consolidated financial statements ranges from 45% to 50%, while the ratio of net profit amounts ranges from 86% to 162%. This indicates that subsidiaries mainly serve a cost function, with profits largely concentrated in the parent company. However, merely controlling the profit aspect is not enough; while subsidiaries bear cost functions, there will inevitably be large transactions, raising concerns about the safety of the funds deposited as a result. Related management costs cannot be economized.

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