Pinduoduo founder Colin Huang left the board of the company’s main operating body in China on August 3, one month after he abdicated the position of CEO to focus on the e-commerce giant’s long-term strategies. Huang still sits on the board of Pinduoduo Inc., US-listed entity that’s incorporated in the Cayman Islands.
Why it matters: Coming on the heels of last month’s leadership reshuffle, Huang’s exit from the board is the latest in his withdrawal from the company’s daily operations.
- Huang may appear to relinquish control, but he still holds significant power over the company: He holds 80.7% of voting shares and sits on Pinduoduo’s powerful Partnership, a superboard created to override the board of directors.
- Other key Pinduoduo leaders followed Huang’s lead with similar moves, triggering widespread speculation about what’s going on within the company as well as the future of the e-commerce giant.
Details: Colin Huang and Pinduoduo CEO Chen Lei exited the board of Shanghai Xunmeng Information Technology Co., Ltd., the China operating subsidiary of Pinduoduo, local media (in Chinese) reported on Thursday, citing information from corporate data platform Qichacha.
- Co-founder Sun Qin stepped down from his roles as legal representative, board chairman, and general manager of the company.
- General Counsel Zhu Jianchong replaced him as the legal person, executive chairman, and general manager.
- The company says the leadership changes are part of an adjustment to the company’s Variable Interest Entity (VIE), a structure adopted by many Chinese tech startups to lure foreign investment.
- The move won’t impact the company’s operation, Pinduoduo said.
Context: The change in Huang’s position came shortly after he was named China’s second-richest man, replacing Alibaba’s Jack Ma. Huang, who was worth $45.4 billion as of June 22, is second only to Tencent founder and CEO Pony Ma in net worth.
- Huang has already stepped down from top management roles from several Pinduoduo affiliates in Hangzhou and Shanghai since 2018.
- Similarly, Richard Liu, the JD founder who was embroiled in a sexual assault scandal in 2018, is also gradually taking a back seat at the company to avoid key man risk.
Correction: A previous version of the story didn’t clarify that Huang only exited the board of the Shanghai-based operator of Pinduoduo’s China operations, rather than the board of the US-listed entity that’s incorporated in the Cayman Islands.