“Mattress First Stock” Xilinmen Gets Trapped in Another Controversy: Sued to Recover a 563 Million Yuan Loan; the Company Claims It Signed No Contract and Received No Money

Ask AI · Why do internal control loopholes at Xilinmen continue to slip through despite repeated bans?

On May 11, Xilinmen Health Sleep Technology Co., Ltd. (ST Xilinmen, 603008.SH), “China’s No. 1 mattress stock,” released an announcement regarding major lawsuits involving the company and its controlling subsidiaries.

The announcement shows that recently, ST Xilinmen received civil lawsuit filings from relevant creditors, with the company and others listed as the borrowing entities. After verification, it was found that the relevant matters did not complete the company’s internal control approval procedures, nor the legally required deliberation and decision-making procedures such as those of the board of directors and the shareholders’ meeting. The total amount involved in the above-mentioned related cases is 563 million yuan. These lawsuits point to illegal borrowing by the controlling shareholder and its related parties.

Previously, on March 28, ST Xilinmen disclosed that 100 million yuan from the bank account of its controlling subsidiary, Hitu Technology Co., Ltd. (“Xitu Technology”), was illegally withdrawn. The incident stemmed from debts related to external financing made by the actual controller, Chen AYu, the controlling shareholder Zhejiang Huayi Intelligent Manufacturing Co., Ltd., and its related parties (collectively, “the controlling shareholder and its related parties”). The transfer was carried out by their creditors. To prevent fund-related risks and safeguard the safety of funds of the listed company, and in light of the company’s investigation findings that the relevant personnel allegedly abused their positions to illegally misappropriate company funds, ST Xilinmen reported the case to public security authorities on March 26, 2026, and took protective freezing measures on the relevant at-risk bank accounts, with a total frozen amount of about 900 million yuan.

The civil lawsuit cases disclosed this time mainly involve two items. Among them, ST Xilinmen and its wholly owned subsidiary Hangzhou Xiyue Furniture Sales Co., Ltd. (“Xiyue Furniture”) received the relevant litigation notices and documents issued by the People’s Court of Xiaoshan District, Hangzhou City (Case No.: (2026) Zhe 0109 Minchu 11240). The lawsuit documents mention that in January 2026, the company and Xiyue Furniture signed a “Loan Contract” with Zhejiang Hongke New Materials Co., Ltd. (“Hongke New Materials”), with a loan amount of 500 million yuan and a loan term from January 8, 2026 to March 29, 2026. Due to failure to repay on time, in April 2026, Hongke New Materials filed a lawsuit with the People’s Court of Xiaoshan District, Hangzhou, requesting the company and Xiyue Furniture to repay the remaining loan principal and related interests, liquidated damages, litigation costs, etc., with a temporary total of about 460 million yuan. As of the date of disclosure of this announcement, this case has not yet commenced for trial.

The other lawsuit shows that ST Xilinmen received the relevant litigation notices and documents issued by the Intermediate People’s Court of Tangshan City, Hebei Province (Case No.: (2026) Ji 02 Minchu 57). The lawsuit documents mention that in September 2025, the controlling shareholder Zhejiang Huayi Zhizao Co., Ltd. (hereinafter “Huayi Zhizao”), the company, and Tangshan Yintong Pawn Co., Ltd. (“Yintong Pawn”) signed a “Loan Contract,” with a loan amount of 99 million yuan and a loan term from the date of actual lending to March 21, 2026. In April 2026, Yintong Pawn filed a lawsuit with the Intermediate People’s Court of Tangshan City, requesting Huayi Zhizao and the company to jointly repay the loan principal of 99 million yuan and the corresponding interest (the interest, temporarily calculated up to March 30, 2026, is 4.8447 million yuan, and the principal and interest total 1.038 billion yuan). The Intermediate People’s Court of Tangshan City issued a civil ruling, explicitly ordering the attachment and freezing of 130 million yuan in bank deposits or other assets of equivalent value held in the names of the company, Huayi Zhizao, and the guarantors. As of the date of disclosure of this announcement, this case has not yet commenced for trial.

Xilinmen stated in the announcement that the above matters were not authorized through the company’s statutory approval procedures. There are no records that the company authorized the signing of a “Loan Agreement,” “Loan Contract,” “Guarantee Contract,” or other guarantee documents. No related loan funds have been received into the company’s account, and the company has also not found any “Loan Agreement,” “Loan Contract,” “Guarantee Contract,” and related guarantee documents.

In addition, based on the data previously disclosed by Xilinmen, as of April 25, the listed company funds that had not yet been repaid, in the form of non-operating fund occupation by the controlling shareholder, the actual controller, and their related parties, totaled 384.5 million yuan (this amount is based on the company’s preliminary calculation). There are circumstances where, without approval by the company, the controlling shareholder, the actual controller, and their related parties provide guarantees for themselves through the listed company via factoring business, pledge of deposit receipts, and issuing guarantee letters, resulting in an outstanding balance of illegal guarantees of 470 million yuan due to the factoring business and the pledge of deposit receipts.

The announcement points out that due to issues including the controlling shareholder and its related parties’ occupation of non-operating funds of the company, unauthorized external guarantees, and the fact that the internal control report for 2025 was issued with a negative opinion by the audit institution, the company’s stock has been subject to other risk warnings (ST) starting from April 28, 2026. The lawsuits involved in this violation fall within the scope of the aforementioned risk matters already disclosed.

In response to the above, ST Xilinmen stated in the announcement that the company will actively respond and has engaged lawyers and other professional teams to handle the defense work. For violations involving failure to fulfill the company’s decision-making and information disclosure procedures, the company will fully rely on legal channels, and firmly safeguard the legitimate interests of the listed company and all investors. At the same time, the company is doing its utmost to urge the controlling shareholder and its related parties to formulate feasible, actionable solutions with a plan, and to take effective measures to remove the circumstances of illegal guarantees and illegal borrowing.

ST Xilinmen said that, since the case disclosed this time is still at the stage of filing for case acceptance and has not yet started trial, and the criminal investigation work by public security authorities is also ongoing, the impact of the case on the company’s profits for the current period or future periods is uncertain. The actual impact will be determined by the court’s final judgment or ruling.

Judging from the stock price performance, Xilinmen has been subject to other risk warnings (ST) since April 28. Its A-share stock abbreviation is “ST Xilinmen.” After the hat was applied, it has recorded seven consecutive daily limit-downs of the “one-word” type. According to Dazhihui VIP, as of the close on May 11, ST Xilinmen was trading at 8.4 yuan per share, down about 60% from its yearly high.