Chinese cloud‑services and peer‑to‑peer download firm Xunlei has launched a civil suit against its former chief executive, accusing him of diverting corporate assets through a network of shell companies and seeking roughly Rmb200 million in damages. The lawsuit, made public by multiple Chinese outlets on January 15, alleges that the former CEO used a supplier called Xing Ronghe — in name a bandwidth vendor — to siphon funds from Xunlei’s wholly owned subsidiary NetHeart Technology, with payments of about Rmb170 million recorded between early 2019 and early 2020.
The accused, Chen Lei, was a high‑profile hire in 2014, arriving from stints at Google, Microsoft and Tencent and promoted within Xunlei from CTO to CEO. Internally he cultivated a “technology idealist” image and repeatedly claimed he was indifferent to money, a persona that helped justify rapid elevation and broad operational authority over cloud and blockchain initiatives that would later generate heavy losses.
Xunlei’s complaint threads alleged financial misconduct with a set of personal relationships and internal promotions. The company says Chen installed a former colleague, identified as Dong Xue, into senior commercial and human resources roles; her pay rose sharply after joining Xunlei and she is alleged to be a beneficiary or controller of several entities tied to Xing Ronghe. Employees say Dong and Chen had a long‑running extramarital relationship that produced a child while both were in senior roles.
The suit paints a familiar procurement‑fraud picture: a supplier with no real staff, qualifications or capital is used as a vehicle to extract company funds. Xunlei’s internal audit and subsequent public reporting say that Xing Ronghe’s shareholders and officers were largely Dong’s relatives, friends and local contacts, and that the company paid inflated consultant fees — including roughly Rmb2 million to two claimed “blockchain experts” who were later identified as elderly relatives from Dong’s hometown.
Beyond money flows, former employees describe a workplace captured by patronage and ritual. Staff report that participation in worship and singing at annual meetings became effectively a cultural litmus test for promotion, while Chen’s office allegedly contained domestic furnishings like a king‑size bed and he authorised lavish purchases on corporate cards. In the months before Chen’s dismissal in April 2020, core teams were reportedly shepherded to the shell supplier, prompting severance and option repurchases that cost NetHeart nearly Rmb9 million.
Xunlei removed Chen in April 2020; the criminal complaint filed earlier at local police that year was later withdrawn, in part after Chen is said to have left for the United States. His whereabouts are now unclear and phone numbers tied to him are unreachable. The current civil action accompanies a broader corporate clean‑up under new chairman Li Jinbo, who shut down the loss‑making blockchain and aggressive shared‑computing programmes and refocused resources on membership services, compliant cloud computing and overseas markets.
Xunlei’s financials, the company says, have recovered since the management change: its 2025 third‑quarter statement reported revenue of Rmb126 million, a 57% year‑on‑year rise, and a net profit figure of Rmb551 million. Whether the civil suit will succeed and whether it will precipitate renewed criminal inquiries remain open questions, but the case has already reopened public scrutiny of governance practices across China’s tech sector.
The Xunlei affair is part of a pattern: procurement and supplier relationships repeatedly surface in recent corruption cases because large, poorly standardised purchases create opportunities for collusion. The simultaneous disclosure that game developer Perfect World has criminal complaints pending over similar project‑level malfeasance underscores that the risk spans multiple subsectors. For investors and boards alike, the episode is a reminder that rapid executive hiring, concentrated sign‑off authority and weak procurement controls can turn technological ambitions into a vector for insider enrichment.