Troubled Chinese smartphone maker Meizu has recently closed a round of funding from Zhuhai government-backed capital fund Honghua, the latest development for the Xiaomi rival following layoffs, declining sales, and shuttered storefronts.

Rumors about the Zhuhai municipal government takeover began circulating online earlier this week. According to business research platform Qixinbao, Meizu shareholder transfers were completed Thursday. Honghua, the state-owned fund under the Zhuhai High Tech Development Zone, replaced Meizu founder Huang Xiuzhang, also known as Huang Zhang, as the largest shareholder with 50.92% of the total, reported Jiemian.

Meizu later confirmed it received investment of an undisclosed amount from the Zhuhai government-backed capital fund, which now has one director on its board. However, it denied any change to controlling shareholders and maintained that Huang remains in control of the company, reported Tencent Tech.

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Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen