An express mail delivery company based in Beijing, Rufengda Express Corporation, has suddenly shut down its business operations.
Hundreds of the company’s employees, suppliers, and logistics partners from different regions in China rushed to Beijing in an attempt to recover unpaid wages and other financial compensation, which they claim total more than 70 million yuan ($10.4 million).
Rufengda operates in more than 3,000 cities in 31 provinces and provincial-level regions, according to the company’s website.
But Rufengda had been losing money for the past few years as larger companies eclipsed the competition, a person familiar with the firm’s finances told Caixin, a Chinese business publication.
Tech giants JD.com and Alibaba both have their own courier services, often popular choices among Chinese online shoppers.
Protests
Protesters surrounded the company’s headquarters building in Beijing for several days in a row. Riot police arrived on the evening of April 4 to disperse the crowd.
One of the protesters told the Chinese-language Epoch Times in an interview: “The company stopped paying salaries since March 16. We went to the Beijing headquarters to defend our rights. At the beginning, there were about 400 people who stayed here for quite some time, but to no avail. The cost of food and accommodation in Beijing is very costly, so many people went back home.”
Another protester said there were more than 400 riot police, against roughly 200 protesters. The police also forbade them from recording video footage. “Whoever tried to shoot video would have his cell phone grabbed away by the police, so protesters didn’t dare to shoot videos anymore,” he said.
It was said that protesters found the company’s new CEO Ying Hang inside the building and surrounded him. In the end, police chased away all the protesters.
A female Rufengda staff who said she worked at the headquarters said her employer owed her two months’ salary, or nearly 10,000 yuan ($1,489). “It [company shutdown] happened all of a sudden. The company stopped all business operations on March 12, but did not give any explanation,” she told the Chinese-language Epoch Times. “Moreover, none of the company managers came out to do anything about it. The new shareholders have never made any public appearance. We have never seen them at all.”
Some media have reported that the company owed employees a total of 30 million yuan ($4.5 million) in wages.
The Company
Public data shows that Rufeng Express Co. was founded in April 2008 with initial funding from e-commerce firms. In fact, the company was the in-house delivery service for VANCL, an online fashion store.
On Jan. 7, the company’s shareholder was changed from the Suzhou Wanlong Huayu Logistics Co. to Shenzhen General Logistics E-Commerce Co., where the business is registered under Ying Hang.
However, Ying has a record of legal trouble, according to an online public database on China’s business executives, called the Executive Information Open Network. From Nov. 10, 2015, to Aug. 27, 2018, Ying was listed on an “untrustworthy” list for repeatedly “refusing to fulfill obligations required from legal documents while having the capability to fulfill those obligations.” A recent labor dispute involving Ying led to a court decision on March 12 that compelled his company to provide roughly 27,000 yuan (about $4,000) in financial compensation to an unnamed litigant.
According to an April 3 report by Chinese media The Economic Observer, General Logistics E-Commerce decided to acquire Rufengda at 45 million yuan ($6.7 million), but suddenly requested to pause the acquisition on March 28. So far, General Logistics has only paid 15 percent of the 45 million yuan.
One of Rufengda’s suppliers told The Economic Observer that the company owed 45 million yuan to its suppliers and logistics partners.
Mr. Gao, who owns a small logistics company in Beijing that partners with the courier company, said that Rufengda owed four months of payments to his company, which amounted to 5.65 million yuan ($840,000).
Ying Hang entered the company headquarters on April 4. Protesters immediately surrounded him. Eventually, police came and chased away the protesters.
