In recent years, many entrepreneurs have been investigated by the Chinese Communist Party through the method of detention. The latest example is Che Jianxing, the founder of the large Chinese home furnishing chain brand Red Star Macalline.
On May 13th, Red Star Macalline Group (known as Macalline) announced that the Yunnan Provincial Supervisory Committee of the Chinese Communist Party has initiated an investigation and implemented detention measures against the company’s director and general manager Che Jianxing.
Macalline stated that the chairman of the company, Li Yupeng, will temporarily assume all responsibilities of the general manager.
Public records show that Che Jianxing was born in June 1966. In December 1990, he founded the Changzhou Red Star Furniture City and served as the general manager from 1990 to 1994. In June 1994, he founded the Red Star Furniture Group and served as chairman and general manager from 1994 to 2007. In 2007, he founded the predecessor of Macalline, Shanghai Red Star Macalline Home Furnishings Company, and served as chairman and general manager from 2007 to August 2023.
In 2023, the then controlling shareholders of Macalline, Red Star Macalline Holdings Group and actual controller Che Jianxing, transferred 29.95% of the company’s shares at a price of 4.82 yuan per share. After the transfer, Macalline changed ownership, with the Xiamen State-owned Assets Supervision and Administration Commission becoming the actual controller. Che Jianxing, known as the “King of Chinese Malls,” stepped down, but remained as a director and general manager of Macalline.
Red Star Macalline Group Corporation Limited is a Chinese home retail chain listed in Hong Kong and mainland China, with headquarters in Shanghai. In addition to operating department stores in mainland China, the company also promotes various home decoration and furniture brands, with hundreds of self-operated and franchised stores nationwide.
Red Star Macalline was once the largest home furnishing market in China. However, with the downturn in the real estate market and sluggish demand in the home industry, the operation of Red Star Macalline has faced challenges. The company’s financial report for 2024 showed a decrease in revenue and net profit. Starting this year, Red Star Macalline has begun closing stores across the country.
In addition to Red Star Macalline, on the evening of April 17th, another household giant, “Julian Smart Home,” suddenly announced that its actual controller, chairman, and CEO Wang Linpeng, has been detained recently.
Julian Smart Home, formerly known as Julian Home, mainly engages in retail business, including modern department stores, shopping centers, supermarkets, home furnishing stores, home building materials supermarkets, and home decoration businesses. It is a large commercial chain group mainly focusing on home furnishings. It has introduced well-known companies such as Alibaba, Taikang Life, and Beijing Jinyu Group as strategic partners, and was listed through a backdoor listing with Wuhan Zhongshang in 2019.
In recent years, many board members and supervisors of listed companies in mainland China have been detained. According to incomplete statistics from Prism Insight, since 2020, 54 A-share listed companies have had their executives detained, with cases in the past year accounting for 74%. The situation is particularly severe when chairpersons or actual controllers are placed under detention. Since 2024, 14 listed company chairpersons have been detained for alleged bribery, illegal activities, and other reasons.
In 2018, the Chinese Communist Party merged the Central Commission for Discipline Inspection and established the National Supervisory Commission. The Central Commission for Discipline Inspection used to have the power of “shuanggui” (informing the suspect in a designated time and place without legal representation), which was transformed into the power of “liuzhi” exercised by the supervisory commission system after 2018. “Liuzhi” is similar to Residential Surveillance at a Designated Location (RSDL), both involving solitary confinement at a secret location for up to six months, but “liuzhi” operates completely outside the legal system.
According to data from the Central Commission for Discipline Inspection of the Chinese Communist Party, the utilization rate of the “liuzhi” system nationwide in 2024 increased by nearly 50% compared to 2023.