(Yicai) Nov. 1 — Shanghai Yitan Network Technology is asking authorities to unfreeze the company’s accounts as the Chinese e-sports company that is part of the Play Dreams gaming network is on the brink of closing down after a large amount of funds were frozen last year as part of a police investigation into suspected online casino operations.
Yitan Tech is no longer able to keep going, it said. The Shanghai-based company has let a lot of its employees go and has canceled all year-end bonuses. In the first eight months, revenue plunged 52.7 percent year on year and its tax contributions have slumped 32 percent.
Yitan Tech is appealing to the authorities for a fair judicial process to help unfreeze the company’s accounts, and is actively cooperating with the police during the investigation, it added.
Yitan Tech, which operates the skill sharing e-sports apps Bixin and Yu’er voice, was raided by police from Taoyuan county in central Hunan province in December last year, after a user convicted of embezzlement invested funds in the platform.
Several of its employees were detained and CNY420 million (USD59 million) of funds across the Play Dreams ecosystem were frozen, it said. This includes CNY270 million from Play Dreams and other independent companies. The company had already had CNY15 million (USD2.1 million) in bank funds frozen last October.
A preliminary investigation conducted by Taoyuan police has shown that Yitan Tech’s Bixin app actively recruited guild partnerships, utilizing streamers to attract players to participate in gambling, which may constitute the crime of operating a casino.
However, Yitan Tech avers that the “gambling game” is a sub-module of interactive gameplay on the YuEr app and is designed to enhance platform engagement and user participation. There are no cash payouts and the platform does not profit from this activity.
At the time of going to press, Yicai had not received any updates from the Taoyuan County Public Security Bureau nor the County Committee Propaganda Department regarding the case.
Yitan Tech claims that despite paying CNY12.4 million (USD1.7 million) to the local government as requested by the Taoyuan County Public Security Bureau in January and over CNY7.5 million (USD1 million) to the father of the suspect, the funds remain frozen.
Editor: Kim Taylor