“And who is the most familiar with our revenue-sharing scheme? The several dozen frontline workers on the investment team that Micro Connect has nurtured and cultivated over the past few years,” wrote the co-founders.
The email was first reported by 36Kr, a Chinese online news outlet. Micro Connect confirmed the accuracy of the internal email but has not yet responded to the Post’s request for additional comment.
Former HKEX chief unveils new foreign investment platform to finance Chinese small businesses
Employees referred to by Li and Zhang as “leading sheep”, or trend setters, will be helming specialised investment teams and funding projects out of their own pockets with partial subsidy from the company, according to the email.
Founded in 2021, Micro Connect finances small retailers such as restaurants and hair salons that do not have access to traditional bank lending to fund their expansion.
In its internal letter, Micro Connect said it had so far provided 4 billion yuan (US$552.7 million) of funding to more than 13,000 businesses using this method, and that the quality of its assets “were recognised by ratings agencies and international big banks.”
Micro Connect acknowledged, however, that its business model pivot will bring “inevitable pains and challenges”, and that certain job functions could be “cancelled or adjusted.”
The email came after an article blew up on WeChat, a popular Chinese messaging app, saying that Micro Connect has been asking employees to invest one million yuan each to establish special-purpose vehicles with the company to invest in certain retailers that are planning to list on Micro Connect’s exchange.
The request came with strings attached. For example, employees can only get their one million yuan back if the investments break even, or if the retailers’ net asset value exceeds 10 million yuan in the event of a liquidation.
