Is the 100 million yuan under "mattress" gone?

Does AI Family Centralization Worsen the Crisis at Xilinmen?

“Xilinmen urgently freezes 900 million yuan accounts,” “Xilinmen is under investigation,” “Xilinmen hits the daily limit down,” a series of trending topics have left investors dizzy.

In recent days, a series of actions by “China’s No. 1 mattress stock” Xilinmen resemble a suspense drama in business warfare.

First, it was revealed that 100 million yuan of funds from its subsidiary Xitu Technology had been illegally diverted by an “insider,” and to prevent further risks, the company immediately froze other accounts under its control, totaling over 900 million yuan.

This 1 billion yuan is just the prelude. Subsequently, the company’s actual controller, Chen Ayu, was placed under investigation by the China Securities Regulatory Commission for suspected information disclosure violations.

How did the money under the mattress simply vanish? Where did the trouble at Xilinmen originate?

A Major Incident Triggered by 100 Million Yuan

The incident was sparked by a recent self-inspection. Xilinmen suddenly discovered that its subsidiary, Xitu Technology Co., Ltd., had a total of 100 million yuan of funds illegally transferred from its bank accounts.

After verification, this was most likely an insider theft involving abuse of position to illegally embezzle company funds. To prevent the remaining money from being moved, Xilinmen applied for criminal investigation with the police on March 26, 2026, and urgently froze other potentially involved accounts, involving over 900 million yuan.

Xilinmen recently issued a series of announcements. Image/Wind Financial Terminal screenshot

For ordinary people, these are just staggering numbers, but for Xilinmen, it’s more than just a large sum.

The illegally diverted and frozen funds total over 1 billion yuan, accounting for more than a quarter of the company’s latest audited net assets. This means that more than a quarter of the company’s assets have been directly locked or lost.

Even more alarming, this 1 billion yuan accounts for 42.69% of the company’s cash on hand, nearly draining the “cash lifeblood” used for business operations.

Why could such a large sum of money be easily diverted from a listed company?

Nankai University finance professor Tian Lihui pointed out sharply that this is a combination of uncontrolled fund approval authority, lack of financial supervision, and runaway related-party transactions.

He explained that the involved subsidiary has only 8 employees, with the legal representative claiming to be a “nominee,” yet holding over 100 million yuan in funds. In such a situation, the parent company did not dispatch senior executives for supervision; approval could be done by a single person, rendering layered approvals meaningless; the finance department failed to detect multiple abnormal transfers; internal audits were negligent; the controlling shareholder long-term occupied funds through loans, factoring, and other means, but the board was dominated by family members, making it difficult for independent directors and professional managers to exert oversight, turning internal audits into mere formalities.

Tian summarized: “Without decentralization, there is no supervision; without checks and balances, there is no compliance. The root cause of internal control breakdown is governance failure under high family centralization.”

In fact, Xilinmen’s actual controller, Chen Ayu, and his core family members—his son and daughter—have long held key positions on the board. Under the absolute family dominance, external compliance constraints and internal financial audits can only be superficial.

Can Shareholders’ Money Be Recovered?

If the 100 million insider theft case was a breach of the defense line, the subsequent developments are a complete internal fire.

On March 31, Xilinmen and its wholly owned subsidiaries directly sued their controlling shareholder “Huayi Intelligent Manufacturing” and the actual controller Chen Ayu in the Yuecheng District People’s Court of Shaoxing City.

The listed company sued its major boss, demanding joint compensation of about 478 million yuan, which is extremely rare in the A-share market.

This lawsuit also exposes longstanding issues within the company: the major shareholder has long occupied company funds through loans, transfers, factoring, and other means, and has also provided external guarantees without proper approval. As of the announcement date, the controlling shareholder and related parties had an estimated non-operational fund occupation of nearly 190 million yuan.

Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, analyzed that this “ruthless internal purge” is actually an inevitable result of internal conflicts intensifying. When the risk of 1 billion yuan of funds materializes, management can no longer tolerate the major shareholder’s asset stripping; filing a lawsuit is a desperate move to cut risks and signal to regulators.

But the most pressing question for ordinary investors is: can the major shareholder’s debt of this huge sum be repaid?

On April 2, some investors anxiously asked about repayment plans on social platforms. The official response was that they are urging the controlling shareholder to resolve the issue through “cash repayment, asset swaps, stock reductions,” etc.

Image/Wind Financial Terminal screenshot

However, the reality may be even more severe. According to the latest company disclosures, the shares of Huayi Intelligent Manufacturing and its concerted parties have been judicially frozen by a total of 37,350,000 shares, accounting for 27.89% of their holdings. The actual controller, Chen Ayu, personally holds 8,107,025 shares, which are also 100% judicially frozen.

Bai Wenxi admitted that a high proportion of judicial freezing means the major shareholder will find it difficult to liquidate holdings on the secondary market; and owing nearly 189 million yuan in illegal funds indicates a highly strained capital chain, making cash repayment a distant hope.

Historically, the repayment rate for major shareholder arrears cases in A-shares is generally low, with minority shareholders often bearing the final losses. Bai Wenxi said, “Even if the 47.8 million yuan claim wins in court, enforcement will be extremely difficult.”

Crisis Beneath the Mattress

While internal conflicts rage, external regulatory fists have also swiftly fallen. Due to suspected violations of information disclosure laws, the China Securities Regulatory Commission has decided to investigate Chen Ayu.

Tian Lihui warned that for the company, the most urgent issue now is “ST risk.”

If the controlling shareholder and related parties do not complete repayment or rectification within one month, or if the audit firm issues a non-standard opinion on the internal control effectiveness for 2025, Xilinmen’s stock will be subject to other risk warnings (ST) or even delisting risk warnings.

However, while the capital market faces a trust collapse, Xilinmen’s performance in the consumer market remains resilient.

On the Snowball forum, an angry investor who had sold all holdings left a helpless comment: “Honestly, Xilinmen’s AI mattresses sell really well. I observed for two days, and based on data, they sold nearly 200 million yuan worth just in the first quarter.”

An interesting report also found that on Xilinmen’s Tmall and JD flagship stores, the top-selling mattress products displayed “100+ people bought within 24 hours” and “hot sales soaring within 24 hours.”

Xilinmen’s products still sell well online. Image/e-commerce platform screenshot

But no matter how good the business, it cannot withstand a leaking wallet. Consumers buy mattresses for peace of mind during sleep, but now the ones losing sleep are the mattress company itself and its shareholders.

As Tian Lihui said, the closure of financing channels, tightening of bank credit, loss of trust among dealers and suppliers—these can easily trigger a so-called “death spiral.” Coupled with the recent two consecutive daily limit-down in stock price, the market’s verdict has already arrived.

For ordinary investors, this is an expensive lesson in risk; for Xilinmen, regaining market trust will require a tough fight to patch the vulnerabilities beneath the mattress.

Author: Liang Tingting

Editor: Tennessee