The chairman and CEO of Chinese video game live-streaming platform DouYu has been arrested, becoming the latest business leader to run afoul of authorities in the world’s second largest economy.
DouYu (DOYU) said in a regulatory filing Tuesday that its chief, Chen Shaojie, had been arrested by police in the southwestern city of Chengdu on or around November 16. The company said it had only been informed of the arrest on Monday.
It “has not received any official notice of the investigation against Mr. Chen or the reasons for Mr. Chen’s apparent arrest,” it added, warning that his “ongoing detention and any subsequent related legal proceedings and enforcement actions” could have a material impact on its business.
In a statement posted on Chinese social media on Wednesday, police in Chengdu said a 39-year-old man surnamed Chen was arrested on suspicion of opening a casino. State-run news agency Xinhua cited the statement as confirmation that the DouYu executive had been arrested.
The news came two weeks after the Cover News, a state-owned media outlet , reported that Chen had become unreachable. It cited unconfirmed reports that Chen was being investigated and had been missing for nearly three weeks.
Chen’s disappearance came about five months after the Cyberspace Administration of China launched an onsite inspection of DouYu to investigate what it called “serious” problems related to the platform, including alleged pornography and “vulgar” content, according to a May statement from the internet watchdog.
Douyu, which means “fighting fish” in Chinese, has also come under scrutiny for allegedly hosting online gambling, which is illegal in mainland China.
Last December, three people running a popular account on the platform were each sentenced to up to six years in prison after being found guilty of “opening casinos” by the Intermediate People’s Court in Chengdu, according to state media.
They had run an online lottery that invited users to place bets, which attracted about 4.4 million users, and collected almost 120 million yuan ($16.9 million), the court said in a statement.
The court described it as the first gambling case involving a live-streaming platform that police had handled under the direct orders of the Ministry of Public Security, suggesting it was of national significance and should serve as “a warning to society.”
In its latest filing, DouYu said it was committed to complying with regulations. The company is currently operating as normal, while working on contingency plans in response to Chen’s arrest, it added.
DouYu, which said in its filing that it could not comment on any pending legal proceedings, did not immediately respond to a request for comment from CNN.
Sweeping crackdown
Chen is one of the latest high-flying executives in China to come under scrutiny by authorities. This year, more than a dozen leaders from industries including technology, finance and real estate have gone missing, faced detention or been subjected to corruption probes.
International consulting firms have also faced rising risks, such as the possibility of raids or detentions of executives.
The developments have had a chilling effect on China’s business community, with some entrepreneurs said to be lying low in response to the uncertainty.
Chen founded DouYu and quickly built it into one of China’s most valuable startups.
Often compared to Amazon’s Twitch service, the Tencent-backed company hosts interactive live-streams of video games while letting users chat in real time and inviting them to watch other content created for its platform.
DouYu’s shares closed nearly 6% in New York on Tuesday following news of the arrest.
