Troubled Chinese online games developer Boyaa Interactive has been forced to replace its Chairman and CEO, Zhang Wei, after he was sentenced to 12 months in prison.
Boyaa announced on Friday that Zhang had resigned as an executive director and CEO of the company, Chairman of the board, Chairman of the Nomination Committee and from all senior management positions after his appeal against charges of bribery were rejected by the Higher People’s Court.
It follows a May 2018 trial at which the Municipal of Intermediate People’s Court found Boyaa Shenzhen guilty of offering “bribes by entities”, fining Boyaa RMB2,500,000 and sentencing Zhang to a fixed-term imprisonment of one year with a suspended sentence of one year and six months. The company had stated at the time that it believed there was insufficient legal basis to support the decision, but the Higher People’s Court disagreed.
On Friday, Boyaa announced that Dai Zhikang would replace Zhang as Chairman of the board with immediate effect, with Ms Tao Ying appointed as an executive director, Chairman of the Nomination Committee and Authorized Representative.
News of Zhang’s imprisonment completes a miserable year for Boyaa, whose revenue fell 34.4% in 2Q18 after China announced a crackdown on online poker applications in April. The crackdown not only saw the government ban online poker applications but also declare that poker would no longer be recognized as a competitive sport.
In its 2Q18 results announcement, Boyaa pointed to a 22.2% decline in revenue compared to 1Q18, mainly due to “the effect of regulatory risk regarding the market rumor of the implementation of the ‘Administrative Measures of Online Chess and Card Games’ by the Chinese government aiming to shut down Texas Hold’em poker games and prohibiting the operation of Texas Hold’em poker games starting from 1 June 2018.”
“Although such policy has not yet been implemented, certain platforms have removed relevant products, which affect our revenue to a certain extent,” the company said at the time.
Boyaa also revealed that the number of players playing its mobile games had fallen from 1.6 million in 2Q17 to 573,000, with revenue derived from its Texas Hold’em Series declining 30.7% in the same period.
As reported by Inside Asian Gaming in April, the Chinese poker crackdown required all apps offering any form of social poker game to be shut down and removed from app stores by 1 June. Social media channels such as WeChat have also been banned from promoting any form of Texas Hold’em product.
The crackdown came almost three years after Chinese authorities raided and shut down the PokerStars APPT Nanjing Millions – a high-profile live event co-hosted by PokerStars and Beijing’s Star Poker Club that had attracted 2,359 players in April 2015.