Chinese tech founder taken away by authorities

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The founder of Tencent-backed game-streaming site DouYu has been taken away by Chinese authorities, becoming the latest tech entrepreneur to run into trouble in the country.

Two people familiar with the matter said 39-year-old Chen Shaojie, chief executive of the Nasdaq-listed group, was taken away several weeks ago. One of the people said authorities were probing pornography and gambling, both of which are illegal in China, on DouYu’s platform.

“We have been unable to contact him since October,” said one of the people close to Chen. “He was taken away by the public security department for investigation related to the pornographic and gambling content on the site.”

Chen’s disappearance comes after China’s powerful internet watchdog in May dispatched a team of officials to DouYu’s offices for a one month of “intensive rectification and supervision” of “porn and vulgar content” discovered on the platform.

Chen could not be reached for comment. DouYu declined to comment on Chen’s whereabouts and said its “business operations remain normal”. State-owned Cover News, which first reported Chen’s disappearance, said DouYu had confirmed to the media outlet they had “lost contact” with Chen.

The troubles of another well-known Chinese executive is a setback to the ruling Communist party’s attempts to reassure entrepreneurs and stabilise an economy facing a crisis of confidence in the private sector.

The party unveiled a 31-point plan in July vowing to improve the business environment, rolling out policy pledges alongside plaudits from the country’s leading tycoons, including Tencent founder Pony Ma.

But the party has yet to succeed in turning around sentiment, with business confidence and spending tepid, especially in the country’s tech sector, which was the subject of a two-year crackdown.

Previous targets of Chinese authorities’ ire, such as Alibaba’s Jack Ma and China Renaissance’s Bao Fan, have not been fully rehabilitated. Ma remains mostly out of public view and spends some of his time in Japan, while Bao has not been seen since February.

Since founding DouYu in 2014, Chen had built the company into one of China’s leading game-streaming and esports brands, drawing about 50mn users a month to the platform to consume everything from streams of League of Legends battles to live cooking shows.

The group raised $775mn from US investors in 2019 when it went public at a nearly $4bn valuation. But Beijing’s crackdown on tech and tightened scrutiny of live-streaming has damaged its business and scared away investors. DouYu’s market value has collapsed to less than $300mn, well below the value of nearly $900mn in cash and short-term investments on its balance sheet.

Tencent holds a 38 per cent stake in DouYu and at one time was planning to merge the company with rival streaming platform Huya. The companies abandoned the merger in 2021 after failing to get sign-off from Chinese antitrust authorities.