Chinese Divorce Settlement Breaks $1 Billion
December 1, 2016
In September 2016, as part one of the highest divorce settlements in the nation, the controlling stakeholder of Grindr, a gay-dating app, Zhou Yahui will transfer 278 million shares equaling an estimated $1.1 billion to his soon-to-be ex. The agreement stands as one of the most expensive settlements on record. Zhou will keep control of the company as he will retain $1.5 billion in inventory or a 34.5 percent stake.
Zhou originally earned his fortune via the distribution of Chinese games online and overseas, bringing his revenue totals to 1.78 billion yuan in 2015. Nearly three-fourths of his earnings were overseas. He graduated from the Beijing institution of Tsinghua University. The company is now expanding into social media and online finance. He also invested in a British lending company, LendInvest.
This is not the first divorce settlement in China to hit a record amount. In 2012, another couple negotiated an extremely high settlement of $2.75 billion, which Wu Yajun paid to her ex-husband, Cai Kui. She is the chairwoman of a property development company, Longfor Properties. Another hefty settlement of $359 million was paid by the vice president of heavy equipment, Yuan Jinhua, to his ex-wife, Wang Haiyan.
Wang Wei, the founder of an online video site, potentially lost the most money during his divorce. In 2011, during the divorce process, his ex-wife sought to have the value of the shares frozen for his company, Tudou. This delayed the initial public offering of the stock on Nasdaq. Although he did come to an agreement of $7 million with his wife, a rival company, Youku, took advantage of the delay. That company proceeded to accelerate the sale of shares, which in turn, affected demand for Tudou. Eventually, Youku acquired Toudu, but Alibaba, the e-commerce conglomerate, now owns the company.
According to the Ministry of Civil affairs, the divorce rate, while still very low, rose from 1.7 percent in 2008 to 2.8 percent nationally in 2015. A state newspaper indicated that the divorce rate rose by 5.6 percent from 2014 to 2015, according to the BBC.
Earlier during the summer of 2016, yet more people in the nation began talking about divorce. Social media chatter and related hashtags escalated after when another famous couple, Wang Baoqiang filed for divorce from his wife, Ma Rong, after she reportedly slept with his agent, Song Zhe. Wang has accused his ex of hiding assets from him. China still holds to highly stereotypical roles of a woman who stays home and cares for her family while the husband works.
During a high asset divorce, both parties need seasoned legal representation with the experience to handle the related nuances of the case. Contact our law firm if you have questions about asset division when a marriage ends.