Xilinmen suddenly defaulted, 100 million was seized, and 900 million was frozen.

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Pengpai News reporter Ji Simin

On April 2, “China’s first mattress brand” Xilinmen Health Sleep Technology Co., Ltd. (Xilinmen, 603008.SH) opened with a one-line limit-down. As of market close that day, it was 13.68 yuan per share, with a market cap of 5.038 billion yuan. Since last Friday (March 27), when the share price was 16.3 yuan per share, to its current price, the share price has cumulatively fallen by more than 16%, and the total market value has cumulatively evaporated by about 965 million yuan.

Behind the limit-down is a concentrated reaction from the capital market to several announcements it has recently issued. Since last Friday, Xilinmen has successively disclosed multiple company matters, including a situation where a subsidiary’s bank account was illegally transferred by 100 million yuan, the listed company suing its controlling shareholder and actual controller, and the company and the actual controller being placed on file by the CSRC, among other issues—this series of matters has also thoroughly exposed its internal control loopholes and capital risks.

On April 2, Pengpai News called Xilinmen’s company phone line. An insider said that, according to the information disclosed in the announcements, the two matters—illegal transfer of funds from the subsidiary’s bank account and the lawsuit against the controlling shareholder—are independent events, and they are currently in the corresponding investigation and filing stage.

Funds from the subsidiary’s bank account were transferred away illegally by 100 million yuan

On March 27, Xilinmen disclosed that recently the company found that funds in the bank account of its controlled subsidiary, Xitu Technology Co., Ltd., were illegally transferred, with the transferred amount totaling 100 million yuan. After verification by the company, it found that the relevant personnel allegedly misappropriated company funds illegally by taking advantage of their positions.

To further prevent capital safety risks and safeguard the company’s funds, Xilinmen stated in its announcement that on March 26, 2026, it applied to public security authorities for filing and investigation, and it will place potentially involved bank accounts under protective freezes. The amount of protective judicial freeze is about 900 million yuan; together, the two add up to more than 1 billion yuan, accounting for 26.54% of the company’s latest audited net assets and 42.69% of its latest audited monetary funds.

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

Notably, the above matter also drew attention from the Shanghai Stock Exchange and resulted in the issuance of a regulatory work letter. Xilinmen said that the company has promptly carried out a self-inspection of capital safety and strengthened its capital safety control system. At the same time, it has actively cooperated with the public security authorities in handling case investigation, to recover the transferred funds as soon as possible, eliminate any unsafe factors related to the company’s account funds, and ensure the safety of the company’s property. In addition, the company will hold personnel accountable and carry out internal control remediation, strengthen all directors and senior management personnel as well as key-post personnel’s study of laws and regulations, improve awareness of compliant operations, and effectively enhance the company’s ability in corporate governance and internal control management, as well as strengthen the building and execution of internal control systems.

The lawsuit against the controlling shareholder has been filed

Just five days after the incident where the subsidiary’s funds were illegally transferred 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 “Case Acceptance Notice” (2026) Zhe 0602 Min Chu 4695 from the People’s Court of Yuecheng District, Shaoxing City. Xilinmen and its two wholly owned subsidiaries, Zhejiang Shunxi Supply Chain Co., Ltd. (abbreviated as “Shunxi Company”) and Zhejiang Yingxi Supply Chain Management Co., Ltd. (abbreviated as “Yingxi Company”), filed a lawsuit with the court on the grounds of a dispute over responsibility for harming company interests. They listed the company’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. The total amount involved is 478 million yuan; the related cases have now been accepted for filing by the court.

According to the litigation facts and reasons disclosed in the announcement, in 2026 Xilinmen and its subsidiaries, for business operation needs, borrowed from banks. Through a loan-in-advance or rollover (transfer loan) business model, the controlling shareholder and its parties acting in concert occupied 72 million yuan of funds that were not returned. Among them, 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 payments already made to suppliers, the defendant side, through a factoring financing business model, applied to the bank for financing in the name of the supplier; ultimately, the funds flowed to the defendant and its designated account. Based on preliminary understanding, the defendant collectively obtained funds of about 406 million yuan.

The announcement shows that, as of the date of disclosure, the balance of non-operational fund occupation by Xilinmen’s controlling shareholder and its related parties is cumulatively 189.6 million yuan (this amount is based on the company’s preliminary statistics; the final amount will be subject to the amounts ultimately determined by further investigations and regulators). It has exceeded 5% of the absolute value of the company’s latest audited net assets. If the controlling shareholder and its related parties fail to complete repayment or rectification within one month, there is a risk that the company’s stock could be subject to other risk warnings.

Meanwhile, the announcement discloses that some shares of the controlling shareholder, actual controller, and their parties 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 number of shares it holds, and 0.86% of the company’s total share capital. The company’s actual controller, Chen Ayu, holds 2.20% of the shares; the number of shares judicially frozen this time accounts for 100.00% of the total number of shares he holds. One of the controlling shareholders’ 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 number of shares it holds, and 2.28% of the company’s total share capital.

With the exposure of the lawsuit matter and the issue of fund occupation, Xilinmen’s controlling party and actual controller have also entered a CSRC filing and regulatory investigation. On April 1, Xilinmen simultaneously disclosed that its actual controller, Chen Ayu, and the company itself have both recently received the CSRC “Notice of Filing for Investigation”. The CSRC decided to file and investigate each of them separately due to suspected violations of information disclosure laws and regulations.

In response to the CSRC filing matters, Xilinmen explained that this filing is specifically targeted at the issues related to fund occupation and the lawsuit. Therefore, investigations are conducted separately on the two entities: the listed company and the actual controller. As a result, both the company and the actual controller received the notice of filing for investigation.

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

According to Xilinmen’s official website, 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 enterprise driven primarily by technological innovation, with a global layout of seven production bases and more than 5,200 stores.

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