The internal drama that led to Bitmain’s Micree Zhan ouster from the company he co-founded may have happened months ago, but the battle for control of the company is nowhere near done.
Zhan has filed a lawsuit against Fujian Zhanhua Intelligence Technologies, a Bitmain subsidiary, as well as Beijing Bitmain Technologies as a related third party. The court filing was made in Fujian, Zhan’s home province, rather than Bitmain’s headquarters of Beijing, as the subsidiary based there still has him listed as the legal representative. It’s also been listed by Bitmain as one of the four principal subordinate entities of Bitmain.
The hearing for the case was originally scheduled for February 11, although it’s possible the date was postponed due to the ongoing problems caused by the Covid-19 coronavirus outbreak. No precise allegations are listed, although it’s suggested the filing concerns a “shareholder qualification confirmation dispute.”
That qualification dispute likely involves the shareholder voting high jinks that led to Zhan’s ouster, and the following moves Bitmain CEO Jihan Wu took to reduce his influence. In January, documents revealed that despite Zhan owning the most shares in Bitmain, Wu was able to hold a majority vote in his absence to remove him from his legal representative role. He then used the same tactic to reduce Zhan’s voting power, reducing his Class B voting power from 10 votes per share down to 1.
Since being forced out of power, Zhan has criticized Wu’s strategy for the company. In early January, 2020, Bitmain announced there would be massive layoffs in anticipating of the BTC block reward halving. Zhan opposed these layoffs, noting Bitmain’s health cashflow, and his belief that the company could compete with any other mining organization in the world.
The decision to downsize might have been inconsequential in the end, as the same coronavirus outbreak that may have delayed Zhan’s hearing date has also heavily impacted Chinese cryptocurrency mining. With travel controls firmly in place, many employees are unable to report to work, and authorities have ordered some operations to shut down.
This all leaves a big question for Zhan: what is he fighting to control? With Bitmain laying off staff, unforeseen disasters causing havoc on the industry, and BTC block rewards about to wreck the profits of all miners, there may be little of value left at Bitmain for him to win back.
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