Another batch of suppliers are seeking to sue Chinese retailer giant Suning Tesco for its failure to pay off its due debts.
As Red Star Capital News reported, more than 160 suppliers of Suning.com have submitted the petition to the Nanjing Intermediate People’s Court, Jiangsu Province. They are calling for the asset liquidation of Suning Tesco.
This is the second batch of suppliers to contact the court’s key lawsuit center to sue Suning Tesco.
According to the petition, a supplier made eight deliveries to Suning Tesco in 2020, and the company’s procurement center issued a total of 8 commercial acceptance bills, totaling about 970,000 yuan ($144,300).
These bills expired, but Suning.com and its procurement center have not yet fulfilled their obligations to pay off their due debts following the supplier’s repeated requests.
The Nanjing Intermediate People’s Court’s key lawsuit center said they have sent representatives to Suning Tesco for talks. The company insisted that it had provided all suppliers with transparent, fair, executable and supervised solutions. But the two sides could not reach an agreement for the time being.
The court revealed that the first batch of suppliers sent their petition against Suning Tesco on July 4.
According to the regulations, the court must decide whether to accept the application within 15 days after receiving the application, and it can be extended for 15 days under special circumstances.
The court said that the money involved in the current case is about 700 million yuan ($104 million). But many suppliers continue to come to the court, so the money may soon exceed 1 billion yuan ($150 million).
Red Star Capital News said that it reviewed Suning’s financial report and found that the company had total liabilities of about 139.7 billion yuan ($20.8 billion) as of the end of 2021. Its asset-liability ratio was about 82%.
Some payables totaling approximately 32.9 billion yuan ($4.9 billion) had also been overdue, mainly including payables to suppliers, notes payable, lease payables, and investment repayments.
In 2021, Suning.com’s annual revenue was 138.9 billion yuan ($20.7 billion), a year-on-year decrease of nearly 45%. Its net profit attributable to shareholders was -43.3 billion yuan ($6.4 billion).
In a letter sent to investors late last year, Suning founder Zhang Jindong said that the company was dealing with the debt and liquidity issues since the Covid pandemic began.