What’s new: The two influential Chinese livestreamers who were fined $14.6 million for tax evasion last month now face another regulatory blow: Their online Taobao stores were frozen right ahead of the Dec. 12 shopping festival.
Shoppers said on social media that Taobao stores owned by Zhu Chenhui, using the screen name “Xueli Cherie,” and Lin Shanshan, known as “Lin Shanshan Sunny,” showed as “error” Dec. 12, the second-largest online shopping event after Double 11 on Nov. 11. Just a day earlier, shoppers said they still saw new items on sale at the stores.
Chenfan Co., an internet celebrity incubation and e-commerce platform that represents Zhu, told Caixin it will honor orders that were already placed and will provide customer service as normal.
Caixin learned from several sources that the closure of the stores was related to the tax evasion cases. Taobao, the flagship online shopping platform owned by Alibaba Group Holding Ltd., froze the two livestreamers’ shops under “regulatory pressure,” and it’s not clear whether the closures are permanent or temporary, according to a person familiar with the matter.
The two livestreamers’ social media accounts on Weibo (the Chinese version of Twitter) and Douyin (the Chinese version of TikTok) were also frozen.
The background: In November, the tax authority in the eastern Chinese city of Hangzhou slapped a combined 93.2 million yuan ($14.6 million) of fines on Zhu and Lin for illegally reporting personal income as business income and evading more than $6.8 million of personal taxes, the first such punishment in the booming but underregulated sector.
The two livestreamers set up 10 sole proprietorship companies in different places and recorded their personal salaries as operating income of the enterprises, a tax evasion method often used by high-net-worth individuals, a tax law firm partner told Caixin. Previously, leading Chinese actresses Fan Bingbing and Zheng Shuang were both convicted of evading taxes totaling hundreds of millions of yuan in this way.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (hello@caixin.com)
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