In a significant turn of events regarding the previously reported illegal transfer of funds, Sleemon Healthy Sleep Technology Co.,Ltd. (ST Sleemon, 603008.SH) has provided a new explanation. The company disclosed on May 11th that it and its controlling subsidiary are involved in major litigation.
The announcement clarifies that the 100 million yuan from the bank account of its controlling subsidiary, Xitu Technology Co., Ltd., which was reported as illegally transferred on March 28th, 2026, was actually withheld by creditors. This action stemmed from debt obligations related to external financing by the actual controller Chen A-yu, the controlling shareholder Zhejiang Huayi Intelligent Manufacturing Co., Ltd., and their related parties.
Furthermore, the company revealed two other major lawsuits involving external guarantees and loan disputes. The plaintiffs have filed lawsuits seeking repayment and fulfillment of guarantee responsibilities from ST Sleemon, with a total claimed amount of 563 million yuan. These cases are currently under judicial review.
Notably, Sleemon stated that the company did not sign the relevant contracts nor receive the funds in question.
**Market Buzz Over 100 Million Yuan Transfer: Now Attributed to Creditor Action**
On March 27th of this year, Sleemon initially disclosed the illegal transfer of 100 million yuan from Xitu Technology. Following an internal investigation suggesting possible misuse of authority by relevant personnel, the company reported the case to public security authorities on March 26th. To mitigate further risk, Sleemon protectively froze three bank accounts across three subsidiaries, totaling over 900 million yuan.
This high-profile case of alleged fund misappropriation caused significant industry concern and regulatory scrutiny over the past month and a half, raising questions about how such a large sum could bypass internal controls.
The latest announcement presents a different narrative. The company explains that the fund transfer was actually initiated by creditors due to debt disputes involving the actual controller Chen A-yu, the controlling shareholder Zhejiang Huayi Intelligent Manufacturing Co., Ltd. (Huayi Intelligent Manufacturing), and related parties. This shifts the perception from potential internal misconduct to a case of debt risk from the controlling shareholder and actual controller impacting the listed company.
This incident reveals systemic fund occupation by Sleemon's controlling shareholder. As of the May 9th, 2026 announcement, the non-operating fund occupation balance by the controlling shareholder and related parties reached 384.5 million yuan, accounting for 10.80% of the recently audited net assets. Concurrently, irregular guarantee balances generated through factoring business and certificate of deposit pledges amounted to 470 million yuan, representing 13.21% of net assets. The company admitted to issuing guarantee letters to creditors of the controlling shareholder without proper board or shareholder resolutions or public disclosure, with the full scale still under investigation.
**Pressure from 560 Million Yuan "Major Debt"** **Company Claims No Contract Signed or Funds Received**
Importantly, in its latest announcement, ST Sleemon stated that as the investigation progressed, the company recently received civil lawsuits filed by creditors involved in these matters. Upon verification, these matters did not undergo the company's internal control approval, board of directors, or shareholders' meeting review and decision-making procedures. The total amount involved in these related cases is 563 million yuan. These lawsuits point to irregular borrowing issues involving the controlling shareholder and its related parties.
The first case is in Hangzhou, Zhejiang. In January 2026, the company and its subsidiary Xiyue Furniture signed a "Loan Contract" with Zhejiang Hongke New Material Co., Ltd. (Hongke New Material) for a loan of 500 million yuan, with a term from January 8th, 2026 to March 29th, 2026. Due to failure to repay upon maturity, Hongke New Material filed a lawsuit in April 2026 with the Xiaoshan District People's Court in Hangzhou, Zhejiang, requesting the company and Xiyue Furniture to repay the remaining loan, related interest, penalties, litigation costs, etc., totaling approximately 460 million yuan temporarily. As of the announcement date, this case has not yet gone to trial.
The second case is in Tangshan, Hebei. In September 2025, the controlling shareholder Huayi Intelligent Manufacturing, the company, and Tangshan Yintong Pawn Co., Ltd. (Yintong Pawn) signed a "Loan Contract" for a loan of 99 million yuan, with a term from the actual lending date to March 21st, 2026. In April 2026, Yintong Pawn filed a lawsuit with the Tangshan Intermediate People's Court in Hebei, requesting Huayi Intelligent Manufacturing and the company to jointly repay the principal of 99 million yuan and corresponding interest (interest calculated temporarily until March 30th, 2026 is 4.8447 million yuan, totaling approximately 103.8 million yuan in principal and interest). The Tangshan Intermediate People's Court issued a civil ruling, ordering the seizure or freezing of 130 million yuan in bank deposits or equivalent assets under the names of the company, Huayi Intelligent Manufacturing, and the guarantor. As of the announcement date, this case has not yet gone to trial.
However, ST Sleemon stated in the announcement that the aforementioned matters did not undergo the company's legal approval procedures. The company has no record authorizing the signing of the "Loan Agreement," "Loan Contract," "Guarantee Contract," or other guarantee documents, nor has it found these documents. The company's accounts also did not receive the related loan funds. This quickly raises the issue of potential fraudulent seals. If the documents were indeed forged, sealed improperly, or signed beyond authority, does the listed company bear responsibility?
The company's announcement points out that due to the existence of non-operating fund occupation by the controlling shareholder and its related parties, irregular external guarantees without proper review procedures, and the resulting adverse opinion on the company's 2025 internal control report by the auditing firm, the company's stock has been subject to other risk warnings (ST) since April 28th, 2026. The litigation involved in this irregularity falls within the scope of the previously disclosed risk matters.
Previously, on March 31st, Sleemon announced that the listed company had been placed under investigation by the China Securities Regulatory Commission (CSRC). Actual controller Chen A-yu is also under investigation. The shares of the controlling shareholder and its concerted actors have been judicially frozen. On the same day, the case where Sleemon and two of its wholly-owned subsidiaries, as plaintiffs, sued the controlling shareholder Huayi Intelligent Manufacturing, its concerted actor Huahan Investment, and Chen A-yu was accepted by the Yuecheng District People's Court in Shaoxing.
In terms of stock performance, Sleemon has been subject to other risk warnings (ST) since April 28th, with its A-share abbreviation changed to "ST Sleemon." After the designation, it experienced eight consecutive days of limit-down declines. As of the close on May 12th, ST Sleemon was trading at 7.98 yuan per share, a drop of approximately 60% from its high point this year.
Sleemon Healthy Sleep Technology Co.,Ltd., formerly known as Sleemon Furniture Co., Ltd., was founded in 1984 and is headquartered in Shaoxing, Zhejiang. The company's legal representative is Chen A-yu, with a registered capital of 368 million yuan. As a leading domestic mattress industry enterprise, Sleemon once leveraged its core mattress business advantage to go public, earning the title of "the first mattress stock," with its brand recognition and industry market share long ranking at the forefront.
However, in recent years, affected by the downturn in the home furnishing industry and internal control risks, Sleemon's growth has weakened, and its performance is under pressure. According to financial report data, full-year 2025 operating revenue was 8.819 billion yuan, a year-on-year increase of 1.02%, while net profit attributable to shareholders was 241 million yuan, a year-on-year decrease of 25.11%. Mattress revenue accounted for 5.459 billion yuan, or 63.13% of revenue, while soft beds and accessories accounted for 2.319 billion yuan, or 26.82%. These two core categories together comprised 89.95% of revenue.
Industry insiders indicate that the crisis Sleemon currently faces is not accidental but the consequence of a long-term failure of its internal control system. The company's finance and internal audit departments failed in their oversight, and internal control processes were ineffective. Furthermore, Sleemon was founded by the Chen A-yu family, and even after going public, it maintained a structure of "father-son control with family members occupying core positions."
It is noteworthy that Sleemon's swift legal action against the controlling shareholder and initiation of asset preservation, driven by independent directors, has become a landmark case in the A-share market of a listed company resisting fund occupation by major shareholders.