The chairman of electronics retailer Newegg has been detained in China.
Zhitao He, a Chinese citizen, is CEO and controlling shareholder of Beijing-based Hangzhou Lianluo Interactive Information Technology Co. and chairman of the board for Newegg, which Hangzhou Lianluo acquired in 2016.
Newegg acknowledged He's arrest in a Jan. 20 SEC filing . "Mr. He's detention does not currently impact Newegg's business or operations, and Newegg's board continues to function in the ordinary course of business during Mr. He's absence."
Hangzhou Lianluo released a statement translated into English that doesn't provide many details about the investigation. The "matters pertain personally to Mr. He Zhitao," it says.
The company received a "Notice of Detention" and a "Notice of Investigation" from the Chinese government authority, the Haibei Prefecture Supervisory Commission, about He's arrest. "As of the date of this announcement, the Company is unaware of the progress or conclusions of the aforementioned matters," the statement, dated Jan. 8, adds.
Hangzhou Lianluo was delisted from the Shenzhen stock exchange in 2024 due to the company's shares trading too low. Some observers are speculating that China is investigating He over corruption charges since the country has a history of disappearing executives and government officials as part of anti-corruption crackdowns and purges.
Newegg didn't immediately respond to a request for comment. The electronics retailer is currently led by CEO Anthony Chow.
In its statement, Hangzhou Lianluo adds: "The Company has a sound governance structure and internal control mechanism, and its daily operations and management are handled by its executive officers. Currently, all other directors and executive officers are performing their duties normally."
