• Key Excerpts
  • VIE Structure
  • VIE Risks
  • VIE Revenue
  1. {"Beijing Paipairongxin currently has five shareholders"=>"Jun Zhang, our co-founder, chairman and chief executive officer, Tiezheng Li, our co-founder, director and chief strategy officer, Honghui Hu, our co-founder, director and president, Shaofeng Gu, our co-founder, director and strategy adviser, and Wei Luo, our angel investor, each holding 11.58%, 4.21%, 11.26%, 59.37% and 13.58% of Beijing Paipairongxin’s equity interests, respectively."}

Key excerpts from filing(s) - related to VIEs

Foreign ownership of internet-based businesses, such as distribution of online information, is subject to restrictions under current PRC laws and regulations. For example, foreign investors are generally not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider and any such foreign investor must have experience in providing value-added telecommunications services overseas and maintain a good track record in accordance with the Guidance Catalog of Industries for Foreign Investment promulgated in 2007, as amended in 2011, 2015 and 2017, and other applicable laws and regulations.
We are a Cayman Islands company and our PRC subsidiaries are considered foreign invested enterprises.
We believe the online consumer finance services offered through our online platform constitute a type of value-added telecommunication services that foreign ownership and investment is restricted and therefore we should operate our online platform through a variable interest entity to ensure compliance with the relevant PRC laws and regulations.
The equity interests of Beijing Paipairongxin are held by Mr. Jun Zhang, Mr. Tiezheng Li, Mr. Honghui Hu and Mr. Shaofeng Gu, our co-founders and shareholders, and Ms. Wei Luo, our angel investor and shareholder. Their interests in Beijing Paipairongxin may differ from the interests of our company as a whole.

Risks identified in filing(s) - related to VIEs

If the PRC government deems that the contractual arrangements in relation to, Beijing Paipairongxin, one of our variable interest entities, and its subsidiaries, in particular Shanghai PPDai, do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
We rely on contractual arrangements with Beijing Paipairongxin, Shanghai PPDai and shareholders of Beijing Paipairongxin for a significant portion of our business operations, which may not be as effective as direct ownership in providing operational control.
Any failure by Beijing Paipairongxin, Shanghai PPDai or shareholders of Beijing Paipairongxin to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.
The shareholders of Beijing Paipairongxin, one of our variable interest entities, may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.
Contractual arrangements in relation to Beijing Paipairongxin and Shanghai PPDai may be subject to scrutiny by the PRC tax authorities and they may determine that we or Beijing Paipairongxin and Shanghai PPDai owe additional taxes, which could negatively affect our financial condition and the value of your investment.
We may lose the ability to use and enjoy assets held by Beijing Paipairongxin and Shanghai PPDai that are material to the operation of our business if the entity goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
Year Total Revenue VIEs Revenue Contribution of VIEs %
RMB (in millions)
2014 na na -
2015 197 196 99.49%
2016 1,209 1,217 100%

Ownership and Voting power details

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