Zhejiang Zhenlei Technology Co., Ltd.’s actual controller and chairman, Yu Faxin, was recently “placed under control” by the authorities. In recent years, many private entrepreneurs have been arrested by the authorities through “custodial measures,” resulting in several fatalities, drawing attention from the public.
In the evening of September 21st, Zhenlei Technology (688270.SH), a special industry chip company, announced that the company’s actual controller and chairman, Yu Faxin, was subjected to control measures by the Huangshi City Supervisory Committee and temporarily unable to perform his duties as a director.
Zhenlei Technology stated that there has been no change in the company’s controlling rights, with daily operations managed by senior executives. During the chairman’s absence, Director Zhang Bing will temporarily assume the responsibilities of the chairman, while other directors and senior executives continue their normal duties.
According to the official website of Zhejiang Zhenlei Technology Co., Ltd., the company was established in September 2015 and was listed on the Shanghai Stock Exchange’s Sci-Tech Innovation Board on January 27, 2022. The company’s business is associated with the military industry market, focusing on products such as RF transceiver chips, high-speed and high-precision ADC/DAC chips, power management chips, microsystems, and modules. Its products are primarily used in phased array radars, satellite communication, with downstream clients including China Electronics Technology Group, China Aerospace Science and Technology Corporation, Chinese Academy of Sciences, and its affiliated enterprises and research institutes.
Zhenlei Technology’s 2025 interim report shows a significant growth in revenue in the first half of 2025, with operating revenue reaching 205 million yuan, a year-on-year increase of 73.64%, and a net profit attributable to the owner of the parent company of 62.3197 million yuan, a 1006.99% increase year-on-year.
As of the end of the reporting period, Yu Faxin held approximately 45 million shares, accounting for 21.04% of the shares. Based on Zhenlei Technology’s market value of 14.877 billion yuan on the 19th, the market value of Yu Faxin’s shares is about 3.13 billion yuan.
According to Zhenlei Technology’s 2024 annual report, Yu Faxin, born in March 1975, a Chinese national, served as a senior research and development engineer at UT Starcom from June 2002 to December 2005. Since January 2006, he has been a professor at the School of Aerospace Engineering at Zhejiang University, and since May 2017, he has served as a director of Zhenlei Technology, and has been the chairman of the company since its restructuring.
In recent years, more and more private entrepreneurs in mainland China have been subjected to control measures by the authorities.
Within the Chinese Communist Party’s anti-corruption campaign, the use of the “shuanggui” system (unlawful detention and interrogation at a designated time and place) has transitioned to the implementation of “liuzhi” by the Supervisory Committee system since 2018.
The new liuzhi detention system retains many features of shuanggui, such as the authority to detain suspects individually without independent supervision mechanisms. However, the scope of liuzhi is broader, extending from officials, public servants to managers of public schools, hospitals, sports organizations, cultural institutions, and state-owned enterprises, and can even detain ordinary citizens suspected of corruption.
The Spanish NGO “Safeguard Defenders” points out that “liuzhi” is similar to Residential Surveillance at a Designated Location (RSDL), as both involve solitary detention in a secret location for up to six months. However, “liuzhi” completely operates outside the legal system, without the right for the individual to hire a lawyer. While many of the victims may not be party members, their treatment appears to be within party affairs.
The liuzhi system was implemented in March 2018, and within a month and a half, the first known case of torture-related death occurred. On April 9, 2018, 45-year-old driver Chen Yong was placed under liuzhi by the Fujian Provincial Supervisory Committee due to his former boss’s involvement in a case. On May 5, Chen Yong suddenly fell during interrogation and was pronounced dead that night. Authorities refused to provide interrogation recordings. Caixin originally reported on this case but quickly deleted the report.
Since 2023, as China’s economy continues to decline, there has been a surge in cases of entrepreneurs being placed under liuzhi. In the first half of 2025, at least 19 entrepreneurs were placed under liuzhi. In mid-August, within a few days, at least five people were placed under liuzhi, including Diadem Data’s general manager Pi Yu, Cositek Technology’s director Liu Jiande, Xiling Information’s general manager Yue Yamei, Guotai Environmental Protection’s chairman Chen Boxiao, and another senior executive at Diadem Data, Chen Wen.
On July 27, 2025, Beijing Juran Home’s chairman Wang Linpeng committed suicide. Just four days earlier, on July 23, Wang Linpeng had been released from over four months of liuzhi investigation.
The Chinese authorities’ use of liuzhi on entrepreneurs has also been questioned for potential financial gains. On September 25, 2024, Deputy Director of the International Strategic Research Institute of the Central Party School of the CPC Zhou Tianyong called for an immediate ban on and halt to local authorities demanding money from private entrepreneurs in exchange for their release. The article was subsequently censored domestically.