On September 2, a Chinese court froze all the assets of Chinese online game developer Boyaa Interactive, effectively seizing all of the RMB635 million ($88.6 million) in assets of the company. 
This appears to have been in response to the company’s former CEO and chairman Zhang Wei being sentenced to a prison term of 12 months after being found guilty of bribes by entitlement.
Zhang Wei had been found guilty of crimes related to bribery and was sentenced to 12 months in prison with an additional 18-month term suspended. He was also fined RMB2.5 million ($348,125) and appealed his conviction, but that was denied by the China’s Higher People’s Court in September, effectively sending the former CEO to prison.
The charges sent the value of the company plummeting. Their revenue fell sharply, and the stock price reached an all-time low by September of last year. The number of players dropped significantly as well, falling from 1.6 million in the third quarter of 2018 to less than 600,000 at the same point last year.
Boyaa also lost one of its biggest games when the Chinese government outlawed Texas Hold’em poker games in June 2018. This help to stifle the income, and was a primary reason why many stopped using the online service.
The sentencing of the former chairman didn’t end the legal woes for Boyaa. During the weekend, the Chinese court seized the assets of the company. The assets were frozen because, as the court explained, it was Zhang’s “alleged illegal activities conducted through one of the company’s onshore online gaming platforms” that necessitated the seizure.
It was further explained that the RMB 635 million ($88.4 million) that were frozen, would not only be used to pay the fine that was owed but that this money had very likely been obtained through the illegal conduct of Zhang. Since it was the former CEO”s misconduct that gave the company these cash reserves, they should be forfeited as part of the prosecution of this matter.
The company expressed surprise at the action, explaining that they had not been informed that any such action was being considered. However, they did explain that “the risk that the Company, its directors and its senior management will be subject to any prosecution by the relevant PRC judicial authority in relation to the alleged crime is remote.” No other litigation appears to be pending at this time.