Last night on June 29, ST Dahu (002512.SZ) dropped a bombshell announcement: *ST Konka A (000016.SZ) has officially filed a contract dispute lawsuit at the Shenzhen Intermediate People’s Court. They’ve dragged Nanfang Aishi Entertainment Technology Co., Ltd. along with its four shareholders into the courtroom, demanding a staggering total of roughly 167 million yuan. The court has accepted the case, but we’re still waiting for the trial to kick off. Behind this legal mess lies a multi-year capital wagering fallout involving an equity buyback deal with Alibaba, disputes over shareholder capital contributions, and a whole host of other headaches.
According to the filing, Konka Group is asking the court to order the defendant, Nanfang Aishi, to pay 129 million yuan in damages plus another 38.65 million yuan in penalty fees—bringing the total bill to 167.5 million yuan. But they aren’t stopping there; they also want Shenzhen Ruibao Lanyuan Investment Partnership, Zhongshan Weiyuan Innovation Investment Fund Management Center, and ST Dahu itself to shoulder joint liability for these debts. Plus, all parties need to cover court costs and preservation fees. While Nanfang Aishi is the main debtor, the other four are its shareholders. Konka argues that these shareholders failed to fully pay their capital contributions and that the company was severely undercapitalized, meaning they should be held jointly liable under company law. Interestingly, Shenzhen Dahua IoT Mergers and Acquisitions Fund Partnership was also named a defendant but wasn’t accused of joint liability.
The spark that lit this powder keg? A capital deal between Konka Group and Alibaba back in the day. In December 2018, Konka signed a “Shareholder Agreement” with Alibaba and Anhua Kaikai Vision E-commerce Co., Ltd. Under this deal, Konka sold some Kaikai Vision shares to Alibaba while Alibaba injected fresh capital. This agreement had a classic “bet-on-it” clause: if Kaikai Vision didn’t hit its IPO target within the set timeframe, Konka promised to buy back Alibaba’s shares at a fixed price, plus interest and penalties.
A few months later, Konka cut a separate deal directly with Nanfang Aishi regarding Kaikai Vision’s IPO plans. Clause 3 of that contract was crystal clear: if Kaikai Vision ultimately failed to go public, Nanfang Aishi would have to foot the entire bill for Konka’s buyback payments, penalties, legal fees, and litigation costs paid to Alibaba.
But here’s the kicker: Kaikai Vision never made it to the stock market. That triggered the buyback clause. Fast forward to 2025, when Alibaba sued Konka to enforce the buyback. Following the court’s ruling, Konka coughed up over 100 million yuan in buyback funds and penalties to Alibaba. Now, trying to recover that massive loss, Konka is pointing the finger squarely at Nanfang Aishi. Today, based on that old agreement, Konka is demanding Nanfang Aishi fulfill its obligations—and they’ve even expanded their claim to include the shareholders’ pockets.
As for the accusation of joint liability, ST Dahu fired back in their statement. They pointed out that on April 21, 2017, Nanfang Aishi hired Guangzhou Zhengda Zhongxin Certified Public Accountants to verify its registered capital. The report confirmed that by August 26, 2016, the company had already deposited 2.99 million yuan, backed up by bank statements. Then, on August 16, 2017, new investors came in via capital increase, pushing Nanfang Aishi’s registered capital up to 130 million yuan. After these new shareholders paid up, another verification report was issued on September 18, 2017. ST Dahu insists that both reports confirm they’ve fully met their capital contribution obligations. They also stressed that they never got involved in Nanfang Aishi’s actual operations, made no profit from this investment, and have no direct connection to the contracts in question.
On the plaintiff side, Konka Group—the once-dominant “King of Color TVs”—is struggling hard with industry transformation. Their 2025 revenue hit 9.835 billion yuan, a drop of 11.51% year-over-year. Even worse, net losses attributable to shareholders skyrocketed to 12.582 billion yuan, widening by a massive 237.73%. Why the hemorrhaging cash? Primarily due to huge asset impairment provisions taken at year-end totaling 7.697 billion yuan, covering bad receivables, inventory write-downs, and long-term equity investments.
By the end of 2025, Konka’s net assets attributable to shareholders had sunk to negative 6.083 billion yuan, with a debt-to-asset ratio climbing to a dangerous 126.66%. They are technically insolvent. And 2026 isn’t looking any better. The Q1 2026 financials show revenue dropping another 24.08% to 1.932 billion yuan for the first quarter, with net profits flipping from a 94.81 million yuan profit last year to a 184 million yuan loss this time around. Because their net assets went negative, Konka’s stock got slapped with a delisting risk warning on April 30, changing its ticker name from “Shenzhen Konka A” to “*ST Konka A”.
This eight-year legal saga is basically a microcosm of what happened after the internet hype wave receded in China’s TV industry. Between 2017 and 2019, every major TV maker thought launching independent internet TV brands was the secret sauce to survival. They poured money into internet giants like Alibaba and Tencent, hoping to rebuild their profit models through new digital channels. But as the traffic红利 dried up and the TV market shrank, most of those internet TV startups failed to deliver growth. Their IPO dreams died, and the betting agreements signed back then suddenly became a ticking time bomb of equity disputes and debt crises. Konka’s string of lawsuits is just one of the most dramatic examples left behind from that chaotic era.
