• Key Excerpts
  • VIE Structure
  • VIE Risks
  • VIE Revenue
  1. The shareholders of Heng Cheng are Mr. Ning Tang, Mr. Fanshun Kong and Ms. Yan Tian, owning 40%, 30% and 30% of Heng Cheng’s equity interest, respectively. Mr. Ning Tang is our executive chairman, Mr. Fanshun Kong is a non-executive PRC employee of CreditEase, and Ms. Yan Tian is a third-party individual designated by CreditEase.
  2. The shareholders of Yi Ren Wealth Management are Mr. Ning Tang, Mr. Fanshun Kong and Ms. Yan Tian, owning 40%, 30% and 30% of Yi Ren Wealth Management’s equity interest, 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 not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except e-commerce) 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, and other applicable laws and regulations.
We are a Cayman Islands company and our PRC subsidiaries are considered foreign-invested enterprises.
To comply with PRC laws and regulations, we conduct our operations in China through a series of contractual arrangements entered into among Yi Ren Heng Ye Technology Development (Beijing) Co., Ltd., or Heng Ye, Heng Cheng Technology Development (Beijing) Co., Ltd., or Heng Cheng, and the shareholders of Heng Cheng, and a series of contractual arrangements entered into among Chongqing Heng Yu Da Technology Co., Ltd., or Heng Yu Da, Yiren Financial Information Service (Beijing) Co., Ltd., or Yi Ren Wealth Management, and the shareholders of Yi Ren Wealth Management.
As a result of these contractual arrangements, we exert control over Heng Cheng and Yi Ren Wealth Management and consolidate their operating results in our financial statements under U.S. GAAP.
These contractual arrangements may not be as effective as direct ownership in providing us with control over our consolidated variable interest entities.
If we had direct ownership of Heng Cheng and Yi Ren Wealth Management, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Heng Cheng and Yi Ren Wealth Management, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level.
The equity interests of Heng Cheng and Yi Ren Wealth Management, our consolidated variable interest entities, are held by Mr. Ning Tang, our founder and executive chairman, and two other individuals, Mr. Fanshun Kong and Ms. Yan Tian. Their interests in Heng Cheng and Yi Ren Wealth Management 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 Heng Cheng and Yi Ren Wealth Management, our consolidated variable interest entities, 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 Heng Cheng and Yi Ren Wealth Management, our consolidated variable interest entities, and their respective shareholders for a portion of our business operations, which may not be as effective as direct ownership in providing operational control.
Any failure by Heng Cheng or Yi Ren Wealth Management, our consolidated variable interest entities, or their respective shareholders to perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.
The shareholders of Heng Cheng and Yi Ren Wealth Management, our consolidated 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 Heng Cheng and Yi Ren Wealth Management, our consolidated variable interest entities, may be subject to scrutiny by the PRC tax authorities and they may determine that we, Heng Cheng or Yi Ren Wealth Management, owe additional taxes, which could negatively affect our financial condition and the value of your investment.
We may lose the ability to use and benefit from assets held by Heng Cheng and Yi Ren Wealth Management, our consolidated variable interest entities, that are material to the operation of our business if any of these entities goes bankrupt or becomes subject to a dissolution or liquidation proceeding.
If the chops of Heng Ye and Heng Yu Da, our PRC subsidiaries, and Heng Cheng and Yi Ren Wealth Management, our consolidated variable interest entities, are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.
Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
Year Total Revenue VIEs Revenue Contribution of VIEs %
RMB (in millions)
2014 197 197 100%
2015 1,314 1,317 100.2%
2016 3,238 3,238 100%

Ownership and Voting power details

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