CEO of Chinese online gaming streaming company detained amidst crackdown on top executives
The chairman and CEO of DouYu, a prominent Chinese video game live-streaming platform, has been arrested amidst a widespread crackdown on business leaders in China, signaling yet another instance of authorities clamping down on executives in the country's booming economy
Don't miss out on CNN's Meanwhile in China newsletter to stay informed about the country's growing influence on the world. Recently, the chairman and CEO of DouYu, a Chinese video game live-streaming platform, was arrested, adding to the list of business leaders facing challenges from the authorities in the world's second-largest economy.
DouYu (DOYU) announced in a regulatory filing on Tuesday that their CEO, Chen Shaojie, was arrested by police in Chengdu around November 16. The company was only notified of the arrest on Monday. They stated that they have not received an official notice regarding the investigation or the reasons for Chen's arrest, and cautioned that his ongoing detention and any related legal proceedings could significantly affect their business.
A 39-year-old man named Chen was arrested in Chengdu for allegedly running a casino, according to a statement posted by police on Chinese social media. The state-run news agency Xinhua confirmed that Chen, an executive at DouYu, had been arrested. This news followed reports from two weeks ago by the state-owned media outlet, Cover News, which stated that Chen had become unreachable and was rumored to be under investigation, having been missing for nearly three weeks.
On May 9, 2023, in Suqian City, Jiangsu Province, China, an illustration of DouYu platform is seen. Due to the platform's serious ecological issues such as pornography and vulgarity, the Cyberspace Administration of China instructed the Hubei Internet Information Office to send a working group to DouYu platform for a one-month supervision and rectification on May 8. (Photo credit should read CFOTO/Future Publishing via Getty Images)
CFOTO/Future Publishing/Getty Images
Yet another CEO goes AWOL in China
Chen disappeared five months after the Cyberspace Administration of China conducted an onsite inspection of DouYu for alleged "serious" issues, such as pornography and "vulgar" content, as stated in a May announcement from the internet watchdog. The platform, known as "fighting fish" in Chinese, has also faced accusations of hosting illegal online gambling in mainland China.
In December, the Intermediate Peoples Court in Chengdu sentenced three individuals running a popular platform account to up to six years in prison for operating illegal casinos, according to state media reports. The individuals had operated an online lottery that garnered approximately 4.4 million users and collected nearly 120 million yuan ($16.9 million), the court stated.
The court referred to it as the first gambling case involving a live-streaming platform that police had handled under the direct orders of the Ministry of Public Security, indicating its national significance and the need to serve as a "warning to society."
In its most recent submission, DouYu expressed its commitment to compliance with regulations. The company is currently operating as usual and has been working on contingency plans in response to Chen's arrest, it stated.
DouYu, which said in its filing that it could not comment on any pending legal proceedings, did not immediately respond to a request for comment from CNN.
Sweeping crackdown
Chen, a top executive in China, is the latest to face scrutiny from authorities. This year, over a dozen leaders in sectors like technology, finance, and real estate have disappeared, been detained, or come under investigation for corruption. International consulting firms are also at increased risk of raids and executive detentions.
The recent developments have caused unease in China's business community, leading some entrepreneurs to lay low in response to the uncertainty.
Chen established DouYu and rapidly grew it into one of China's most valuable startups.
Comparatively to Amazon's Twitch service, the Tencent-supported company hosts interactive live-streams of video games, allowing users to chat in real-time and inviting them to watch other content created for its platform. Following news of the arrest, DouYu's shares closed nearly 6% in New York on Tuesday.
