Xunlei has sued its former CEO Chen Lei, alleging that he misappropriated company funds for illegal cryptocurrency trading.

Xunlei Corporation (Nasdaq: XNET) has filed a lawsuit against its former CEO Chen Lei and his core team, accusing them of misappropriating company funds and seeking up to 200 million yuan in damages. The case has been accepted by the relevant court in Shenzhen. Sources familiar with the matter stated that Chen Lei joined Xunlei as CTO in 2014 and became CEO in 2017. In 2020, Xunlei dismissed him on suspicion of embezzlement. Subsequently, the Shenzhen Public Security Bureau launched an investigation into Chen Lei and others for suspected embezzlement. To evade investigation, Chen Lei and former Xunlei Senior Vice President Dong Xue have fled the country. It is reported that Chen Lei, through former Xunlei Senior Vice President Dong Xue, recruited a group of Dong Xue's fellow townsmen and close friends from Hegang, Heilongjiang Province, placing them in key positions within the company. They allegedly embezzled company funds through illegal means such as fabricating transactions and creating false contracts, involving a substantial amount of money. The new management has already cleaned up and adjusted Xunlei's relevant businesses and personnel. Chen Lei is also suspected of misappropriating tens of millions of yuan of company funds for illegal cryptocurrency trading, which is explicitly prohibited by the state. To evade investigation, Chen Lei left the country in early April 2020. (The Paper)