What’s new: Missfresh Ltd., once a leader in China’s booming online grocery industry, faces nearly 1,400 lawsuits from former employees and suppliers demanding nearly 813 million yuan ($115 million), according to the company’s late 2021 financial report.
Nasdaq-listed Missfresh, which closed its core retail instant delivery business in July, is down to just 55 employees, according to the report. The company had 1,925 employees at the end of 2021 and reduced the workforce to around 100 in July.
Missfresh recorded 13.39% revenue growth in 2021 to 6.95 billion yuan. The net loss increased 2.3 times to 3.85 billion yuan, according to the financial report. The company had a negative cash flow of 2.6 billion yuan in 2021 with cash of 1.1 billion yuan at the end of the year.
Total liabilities reached 3.6 billion yuan at the end of 2021, with a debt-to-asset ratio of 105 percent, according to the report.
The context: Missfresh’s financial results for 2021 came nearly six months after the required deadline for US-listed companies. The delay was due to disagreements between the company and auditor PricewaterhouseCoopers over the company’s sales figures, Caixin learned.
Missfresh said in July that a survey found sales for the first three quarters of 2021 were inflated by 14%. Missfresh said the employees implicated in the wrongdoing have resigned.
The company’s financial crisis has since worsened as it failed to attract new investment, forcing it to downsize and lay off workers. Caixin learned that Missfresh’s debts to suppliers amounted to 2 billion yuan.
In August, Missfresh denied wanting to liquidate and said some of its businesses continued to operate.
According to the financial report, Missfresh sold its unstaffed retail business for 18 million yuan to pay off its debts. The transaction is not completed.
Quick Takes are condensed versions of China-related stories for quick news that you can use.
Contact reporter Han Wei ([email protected]) and editor Bob Simonon ([email protected])
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