Bitmain co-founder in legal war against shareholders of the company

[Baofeng]

Last October-Nov, there was a coup in Bitmain company bringing back Jihan to power, now the ousted co-founder is fighting back.

Bitmain co-founder in legal war against shareholders Micree Zhan Khetuan owned four million Class B shares, which translated to ten votes per share. However, the shareholders decided to reduce Zhan’s control of the firm by reducing each Class B share’s value to one vote instead of ten. As such, Zhan asked Cayman Islands Court to discredit this decision and restore his power. As per the reports, Zhan owned around four million Class B shares while Wu Jihan, the only other holder of the special stocks, only owns half as much. The issue arose in October 2019 when Bitmain co-founder Jihan Wu decided to relieve Zhan Khetuan of his duties. Wu announced in an email that Zhan has left the company and that he has been dismissed of all roles. Since then, Zhan has declared that he was removed from his post without his consent, and he would fight for Bitmain “till the end with legal weapons.” Zhan stated that he was betrayed by his trusted partners and stabbed in the back. He added that for those who want “war,” he would give them one. On the other hand, Wu has warned Bitmain employees against interacting with Zhan. Wu has advised employees from taking directions or participating in meetings organized by Zhan. He has explicitly stated that the company may choose to terminate employment contracts of employees that interact with Zhan. Bitmain intends to reduce the workforce by nearly 50 percent as part of its “personnel optimization plan.” It is believed that this is due to the upcoming Bitcoin halving that would reduce mining rewards by half. Since Bitmain is a crypto mining firm, it cannot support its employees with half block rewards and needs to make adjustments.

https://www.cryptopolitan.com/bitmain-co-founder-in-legal-war-with-company/

[hugeblack]

I do not think that the justification for bitcoin halving is the main reason for exempting employees, because it is a naive comparison, for example, 50% of employees, because the value of the rewards goes down by half.

[Baofeng]

I do not think that the justification for bitcoin halving is the main reason for exempting employees, because it is a naive comparison, for example, 50% of employees, because the value of the rewards goes down by half.

I think it's just one excuse to reduced its employees, maybe because the company is not really earning as it is supposedly claim. Or probably Jihan is using it to purge the ranks of Bitmain of people who are against him. So nothing to do with bitcoin halving but personal vendetta inside his company.

[tippytoes]

I do not think that the justification for bitcoin halving is the main reason for exempting employees, because it is a naive comparison, for example, 50% of employees, because the value of the rewards goes down by half.

I think it's just one excuse to reduced its employees, maybe because the company is not really earning as it is supposedly claim. Or probably Jihan is using it to purge the ranks of Bitmain of people who are against him. So nothing to do with bitcoin halving but personal vendetta inside his company.

More than likely, a weak excuse to discard employees and those that are in close connection with Zhan will be the first to be terminated. Though we don't know his real intentions here but it will come later once the dust settles. Jihan should give the fair share to Zhan to avoid further conflict and "war". If he doesn't want Zhan within the company, at least give him his share. Because I think, if the other side is being given unreasonable compensation, then he will not stop the "war" that he's talking about.

[CryptoBry]

I do not think that the justification for bitcoin halving is the main reason for exempting employees, because it is a naive comparison, for example, 50% of employees, because the value of the rewards goes down by half.

I think it's just one excuse to reduced its employees, maybe because the company is not really earning as it is supposedly claim. Or probably Jihan is using it to purge the ranks of Bitmain of people who are against him. So nothing to do with bitcoin halving but personal vendetta inside his company.

The war going in Bitmain is quite interesting to watch. Both of these personalities are known in the Bitcoin mining industry and whatever they are saying and doing will have ripple effects on the company they are fighting for. Whoever win the upper hand at the end certainly deserves some form of congratulations. Personally, I have no stake on this company and its future so I really do not care, just a spectator of the fight is my fittest description. Whatever can be the real reasons for the plan to trim down the employee list drastically are things these people only know fully. Let's watch further development on this internal Bitmain conflict.

[Mahanton]

I do not think that the justification for bitcoin halving is the main reason for exempting employees, because it is a naive comparison, for example, 50% of employees, because the value of the rewards goes down by half.

I think it's just one excuse to reduced its employees, maybe because the company is not really earning as it is supposedly claim. Or probably Jihan is using it to purge the ranks of Bitmain of people who are against him. So nothing to do with bitcoin halving but personal vendetta inside his company.

More than likely, a weak excuse to discard employees and those that are in close connection with Zhan will be the first to be terminated. Though we don't know his real intentions here but it will come later once the dust settles. Jihan should give the fair share to Zhan to avoid further conflict and "war". If he doesn't want Zhan within the company, at least give him his share. Because I think, if the other side is being given unreasonable compensation, then he will not stop the "war" that he's talking about.

For sure he had some thoughts in regards to this and i do saw that one pushes him is his pride.If they do really care about the company then they should settle it quickly because these conflicts would surely give out negative impressions towards the company.

Alibi or not, the reducing of its employees neither a reason of profit issues or rather personal.

[Baofeng]

I do not think that the justification for bitcoin halving is the main reason for exempting employees, because it is a naive comparison, for example, 50% of employees, because the value of the rewards goes down by half.

I think it's just one excuse to reduced its employees, maybe because the company is not really earning as it is supposedly claim. Or probably Jihan is using it to purge the ranks of Bitmain of people who are against him. So nothing to do with bitcoin halving but personal vendetta inside his company.

More than likely, a weak excuse to discard employees and those that are in close connection with Zhan will be the first to be terminated. Though we don't know his real intentions here but it will come later once the dust settles. Jihan should give the fair share to Zhan to avoid further conflict and "war". If he doesn't want Zhan within the company, at least give him his share. Because I think, if the other side is being given unreasonable compensation, then he will not stop the "war" that he's talking about.

Obviously, his intentions are very clear, get rid of Zhan at all cost and get back the power which he succeeded. So this is really a power struggle between the two and I doubt that anyone will give an inch here. I do hope that we remember how Steve Jobs was kick out of his company Apple before.

@CryptoBry - Yeah I agree, it will have a ripple effect and I think the competitors are greatly benefiting from the said 'war'.

[audaciousbeing]

Topics of discussion such as this are more of politics than it relates to legal section of the forum. Its not a legal action for the adoption of bitcoin neither is it about laws making that relates to crypto currency couple with the tax element of things. This is purely board room politics that no one cares about. Its simply some capitalists fighting each other on who will get the maximum share of the cake and nothing else eventually they would meet in hotel lobby and greet each other after they must have even resolve to settle out of court with a bigger paycheck.

[1Referee]

Or probably Jihan is using it to purge the ranks of Bitmain of people who are against him. So nothing to do with bitcoin halving but personal vendetta inside his company.

I think that makes a lot of sense, especially when you take into consideration that the same tactics were used to get him off his CEO seat. In that regard, who is the bad guy? It's pretty much fire against fire and there isn't much that the regular employees can do than to accept being used as collateral damage.

https://www.blockchain.com/pools

Bitmain is losing the battle as most dominant entity within the mining space and that's a great thing for Bitcoin. I hope it will stay like that, but the problem is that you never know what else fills up that gap. It's great seeing such a toxic company lose power slowly but surely, but what if the competitors are even worse?

[hv_]

Some might speculate they lost the hash war . ABC tricked them into a split cause fear of strong governance for stable compliant  BitCoin BSV was against their wishes

[Kemarit]

I do not think that the justification for bitcoin halving is the main reason for exempting employees, because it is a naive comparison, for example, 50% of employees, because the value of the rewards goes down by half.

I think it's just one excuse to reduced its employees, maybe because the company is not really earning as it is supposedly claim. Or probably Jihan is using it to purge the ranks of Bitmain of people who are against him. So nothing to do with bitcoin halving but personal vendetta inside his company.

The war going in Bitmain is quite interesting to watch. Both of these personalities are known in the Bitcoin mining industry and whatever they are saying and doing will have ripple effects on the company they are fighting for. Whoever win the upper hand at the end certainly deserves some form of congratulations. Personally, I have no stake on this company and its future so I really do not care, just a spectator of the fight is my fittest description. Whatever can be the real reasons for the plan to trim down the employee list drastically are things these people only know fully. Let's watch further development on this internal Bitmain conflict.

Well it has drastically affected them as a whole, internal bickering like this one will have a domino effect on the industry that they are part of. And look at what @1Referee has posted, it looks like Bitmain is losing their grip and power, is has a bad effect on them. But in the long run, we do love to see them losing some ground so that other might take the place and make mining more decentralised. And let other mining companies learn a lesson from Bitmain internal conflict, CEO should get everything on one page.

[Theb]

Topics of discussion such as this are more of politics than it relates to legal section of the forum. Its not a legal action for the adoption of bitcoin neither is it about laws making that relates to crypto currency couple with the tax element of things. This is purely board room politics that no one cares about. Its simply some capitalists fighting each other on who will get the maximum share of the cake and nothing else eventually they would meet in hotel lobby and greet each other after they must have even resolve to settle out of court with a bigger paycheck.

Honestly you cannot really talk about law without including the politics behind it, even if you attend law school they don't just talk about laws they also talke about vases and politics. This case on Micree about him being forced out of his company is a really big deal especially now when Bitmain is planning to go publicly listed in the USA. This may not be directly related to laws governing on Bitcoin and its adoption but these covers how  a co-founder of a mining manufacturing company got ousted from his company. If these case is done I'm sure that it will give a new precedence in the law which may change the courses of the outcome of other cases related to this.

[Baofeng]

Just a quick update on the case:

Micree Ketuan Zhan, the ousted co-founder of Bitmain, has filed another lawsuit in his fight to regain control of the bitcoin mining giant – this time in his home country.

A recent notice from the Changle District court in China’s Fujian province indicates Zhan has filed a lawsuit against Bitmain’s fully-owned subsidiary Fujian Zhanhua Intelligence Technologies, as well as Beijing Bitmain Technologies as a related third party.

A hearing of the case was scheduled on Feb. 11, according to the notice, although it's likely postponed due to the disruption caused by the coronavirus outbreak. While it’s not clear what the exact allegations are, the court says the case relates to a “shareholder qualification confirmation dispute.”

The case adds to the ongoing litigation in the Cayman Islands Zhan has filed against the company that he co-founded with Jihan Wu in 2013, casting further uncertainty on the outcome of the power struggle at the world’s largest miner maker as well as its planned initial public offering in the U.S.

https://www.coindesk.com/exiled-bitmain-co-founder-is-fighting-back-with-second-lawsuit

So he is not going down without a fight, again, this case might drag Bitmain again, I haven't check their quarterly profits, I'm assuming they are still way below their target and this case could cause them millions. So let's see how this power struggle goes.

[hv_]

Just a quick update on the case:

Micree Ketuan Zhan, the ousted co-founder of Bitmain, has filed another lawsuit in his fight to regain control of the bitcoin mining giant – this time in his home country.

A recent notice from the Changle District court in China’s Fujian province indicates Zhan has filed a lawsuit against Bitmain’s fully-owned subsidiary Fujian Zhanhua Intelligence Technologies, as well as Beijing Bitmain Technologies as a related third party.

A hearing of the case was scheduled on Feb. 11, according to the notice, although it's likely postponed due to the disruption caused by the coronavirus outbreak. While it’s not clear what the exact allegations are, the court says the case relates to a “shareholder qualification confirmation dispute.”

The case adds to the ongoing litigation in the Cayman Islands Zhan has filed against the company that he co-founded with Jihan Wu in 2013, casting further uncertainty on the outcome of the power struggle at the world’s largest miner maker as well as its planned initial public offering in the U.S.

https://www.coindesk.com/exiled-bitmain-co-founder-is-fighting-back-with-second-lawsuit

So he is not going down without a fight, again, this case might drag Bitmain again, I haven't check their quarterly profits, I'm assuming they are still way below their target and this case could cause them millions. So let's see how this power struggle goes.

Op - Risks all the way down in PoW / mining. This is good for 'decentralization' of powers btw

We will soon see more regulated and more stable mining companies - like TAAL

Original Bitcoin and its setup is such disruptive, don't play its rules - go bankrupt ...

[squatter]

I'm not sure how far to read into this, but apparently it's a partial victory for Micree Zhan. He had lobbied the Bureau of Justice to block Bitmain's recent corporate officer reshuffling, and they just ruled in his favor. Jihan Wu is pissed off, saying Bitmain is going to sue the City:

The bureau had approved the registration switch on Jan. 2, but Zhan appealed the decision in February and asked the bureau to register him as the legal representative, a title he once held, instead.

While the bureau did not register Zhan as the legal representative, its reversal of the change from Wu to Liu could be significant. In China, naming a legal representative is much more than a formality; usually the chairman or CEO, this person has broad powers to act on a company’s behalf.   

“We deeply regret the decision and think the bureau has violated corporate laws, and our company’s autonomy via administrative measures,” Bitmain said in a statement the same day. Hong Kong-based Bitmain Technologies Limited, whose CEO is Wu, has the right to change its legal representative since it is the Beijing subsidiary’s sole shareholder, the company said.

“We will file a lawsuit against the bureau to protect our company, shareholders and employees,” the company said in the statement.

Apparently this legal representative position is a big deal.

[Baofeng]

^^ Thanks for updating this thread.

Yes I would consider this a win for Zhan because it was ruled in his favour. I think this is very big win for him and this might pose another road block to Jihan's grand scheme to have full control again. I'm still seeing that this case will be drag for years in China's court and it might take a toll on Bitmain. Lol, at Jihan suing the city, he really thinks that he is untouchable now. I think this will also create a lot of uncertainty within Bitmain itself including their investors.

[Jating]

[..snip..]
Apparently this legal representative position is a big deal.

Probably is, as it oversee's the company's legal affairs, so it is one powerful position with Bitmain.

@Baofeng - Bitmain has been struggling in the past couple of years and Jihan Wu want's to consolidate his power and he want's everyone on his side. Unfortunately, Micree Zhan will be a pain in his ass and won't really give up his position in the company, specially they did it when he was away. So they will keep on struggling as long as Zhan is on their way.

[gentlemand]

https://twitter.com/DoveyWan/status/1258667286455398401

Slightly hard to tell what's going on here but it looks like that some sort of licence pertaining to Bitmain was physically grabbed by Jihan's goons in a government office.

Had there been an IPO and stuff I wonder what their respectable shareholders would make of stuff like this. Maybe it's business as usual in China. Dunno.

[Yaunfitda]

And according to this article, the decision to removed Zhan was the decision of the board of of shareholders. But what influences the share holder to vote on no-confidence resulting to the ouster?

The statement also notes that if Zhan attempts to interfere with company business and employees they will take him to court. The statement shows that the removal of Zhan was based entirely on all the shareholders’ decisions.

The statements also detail that Zhan should not talk to Bitmain employees and try to sway them. Bitmain employees have been told to ignore Zhan or they could be faced with legal actions.

https://news.bitcoin.com/bitmain-cofounder-allegedly-expelled-could-face-litigation-for-operation-interference/

I'm not sure about Jihan goons taking some stuff in the in a government office, but if this is true then this is going to be a long battle for Jihan, against the government and Zhan.

[stompix]

You will need lots of popcorn for this

So, everything is a mess with Bitmain Technology Co., Ltd part of Beijing Bitmain Ltd being owned by Bitmain Technologies Limited based in Hong Kong but managed by BitMain Technologies Holding that also held the business license and there are two more subsidiaries which are not under this management control but part of Beijing Bitmain ...
Yeah, everything is pretty clear ...

I wonder how long it will take till the courts get tired of all this end advise them to stop playing games or they will all end in a stadium, with no matches being played.

Had there been an IPO and stuff I wonder what their respectable shareholders would make of stuff like this.

If Bitmain had an IPO a lot of pretty shady stuff that is going around there would have been exposed, and if respectable people would have invested in it even with those probably all the previous leadership would have been retired or assigned some nice paid jobs but with no decisional power left.
Anyhow, bad times for this infighting with the best gear going to ROI in one year assuming 2c/kWh and no other expenses, really really bad timing.