Letter from Huang Zhengfa: donation of 2.37% shares with the founding team to establish Fanxing Charity Fund

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Sina science and technology news on the evening of July 1, Huang Zheng, founder and chairman of pinduoduo, issued a letter from all staff, announcing the organizational upgrading. With the approval of the board of directors, Chen Lei, the former CTO of the company, will be the CEO, while Huang Zheng himself will continue to be the chairman of the company.
After retiring as CEO of the company, Huang Zheng will spend more time with the board of directors to formulate medium and long-term strategies of the company, and study and improve the corporate governance structure including partnership mechanism. Huang Zheng said pinduoduo will continue to establish and improve the partnership system. Pinduoduo set up the partnership system framework when it went public in July 2018, but the specific models of how to select partners and the responsibilities of partners are still under constant exploration.
Therefore, Huang Zheng will allocate 7.74% shares of pinduoduo listed company under his personal name to pinduoduo partners. Some of them can carry out some long-term basic research and social welfare exploration without affecting the interests of existing shareholders of pinduoduo, and some of them can be used as supplementary incentives for future management.
In addition, Huang Zheng, together with the founding team, will donate about 2.37% of the company’s shares as promised in the IPO to officially establish the “Fanxing charity fund” to promote social responsibility construction and scientific research. The charitable fund is an irreversible charitable fund and managed by an independent trustee to ensure that all assets of the charity fund are used for public welfare purposes. (He Chang)
The following is the full text of Huang Zheng’s letter to all members of the company:
A small step of pinduoduo
More than a decade ago, when we started our online business, the logic of “controlling goods and flow” in the retail market was still the mainstream. In the practice, we saw the future of “inclusive + people first”.
Five years ago, the first mock exam during the Dragon Boat Festival made me believe that the “fight” model can effectively aggregate people’s needs and create different social values in the future.
Now, we see that the Internet has not only solved the problem of efficiency. People’s virtual and real life are inseparable online and offline. We believe that “Costco + Disney” is bound to be the future of the retail consumer market.
In recent years, pinduoduo has experienced rapid development. The rapid growth of our company and the rapid change of team management in our company accelerate the rapid growth.
Just yesterday, we held a special board meeting and approved an iterative adjustment of the management team:
From July 1, 2020, I will no longer be the CEO of the company. Chen Lei, co-founder and CTO of the company, will take over as CEO.
At the same time, the company appointed senior vice president Zhu Jianzhong as the company’s general counsel, and Ma Jing as the company’s vice president of finance.
I will continue to be chairman of pinduoduo.
With this adjustment, I will formally establish “Fanxing charity fund” according to the commitment made in IPO, and together with the founding team, I will donate 113548920 ordinary shares of pinduoduo listed company (about 2.37% of the total shares of the company), aiming at promoting social responsibility construction and scientific research. The charitable fund is an irreversible charitable fund, which is managed by an independent trustee to ensure that all assets of the charity fund are used for public welfare purposes.
Pinduoduo will continue to establish and improve the partnership system. I will allocate 370772220 ordinary shares (about 7.74% of the total shares) of pinduoduo listed company under my personal name to pinduoduo’s partners. Some of them can carry out some long-term basic research and social welfare exploration without affecting the interests of pinduoduo’s existing shareholders, so as to provide the company with additional long-term power and batteries; some can be used as a supplementary incentive for the future management.
I hope that through this adjustment, the management can gradually transfer more management work and responsibilities to younger colleagues, accelerate the growth of the team, and make pinduoduo a better and stronger company full of entrepreneurial vitality.
After this adjustment, I will spend more time with the board of directors to formulate medium and long-term strategies of the company, study and improve the corporate governance structure including partnership mechanism, and strive to promote pinduoduo to a higher level from the institutional level, and gradually become a public institution with international competitiveness.
As I said in my letter to shareholders before IPO, pinduoduo bears unique social values and is a public institution. It is not a tool to show individual ability, nor should it have too much personal color. We will fulfill our promise and strive to improve its organizational structure and “responsibility” culture, so that pinduoduo will continue to evolve in accordance with its own unique destiny.
Huang Zheng, chairman of pinduoduo
July 1, 2020