Zhaopin employees convicted, delisting moves forward
14 Jul 2017
Two employees of Chinese recruitment platform Zhaopin (智联招聘, NYSE: ZPIN) have been found guilty of violating the data rights of the platform’s users.
The employees – named only as “Shen” and “Li”, a sales representative and a customer service representative at the company – were sentenced to three years and six months and one year and six months of jail time, and fines of 300,000 RMB ($44,230 U.S.) and 50,000 RMB respectively.
Between March and October 2016, Shen acquired more than 150,000 CVs using a loophole in the company’s internal computer system. He (or she) then subsequently sold these to an HR manager – “Yu” – at an unnamed tech company. The HR manager also received a three-and-a-half-year sentence for his/her involvement.
Shen profited from the arrangement to the tune of 200,000 RMB, of which 40,000 RMB was then given to Li via WeChat’s “red packet” cash gifting system. WeChat (微信) is operated by conglomerate Tencent (腾讯).
Shen and Yu have lodged appeals following the verdict.
In April, Zhaopin announced that it would be merging with Australian recruitment giant SEEK Limited (ASX: SEK). As part of the deal, SEEK announced plans to delist Zhaopin from the New York Stock Exchange. The deal valued Zhaopin at $1.01 billion U.S..
Two private equity groups, Hillhouse Capital Group and FountainVest Partners, will buy the publicly traded shares in Zhaopin, while SEEK retains its 61.3 percent interest in the share capital of Zhaopin and an effective controlling stake.
At the time of its initial announcement, the transaction was expected to be completed in the second half of 2017. In line with that, Zhaopin declared a special dividend – precursor to the eventual buyout (at $9.10 U.S. per share) – of $0.94 U.S. per share, payment of which is also conditioned upon the consummation of the merger.
The announcement is the first indication for several months that the merger and delisting of Zhaopin are still on track.
Zhaopin claims over 120 million registers users. In the financial year to June 30, 2016, approximately 36.9 million jobs were listed on the platform by 509,813 unique customers. In the financial year ending 31 December 2016, Zhaopin recorded revenue growth of 11 percent y-on-y.