As part of the approval process for store renovation subsidies, the Company inspects both new stores and old stores before and after renovations, and takes photographic evidence of the work done. In addition, all new stores opened by our distributors and authorized third-party retailers require Company approval. As a result, the Company maintains multiple levels of financial and operational oversight relating to the Xidelong retail store network, which further supports the reported store figures.Our Distributors Following the posting of a report regarding the size of the Xidelong store network, we followed up with all of our 22 distributors, which employ over 4,000 people in total, conducting detailed interviews with senior management to confirm the identity or existence of the interview subjects cited in recent reports. Our discussions with our distributors brought to light a number of troubling inaccuracies in the report. These include:
- One report cited a Mr. Xu as the manager responsible for the Wenzhou region distribution. When we spoke to our distributor in the region, they informed us that there was a Mr. Xu employed with the company, but that he has already left the Company.
- For all the other interviewees mentioned in this report, our distributors for each region have confirmed that there are no such persons in the senior or mid-level management at those respective distributors. As noted, our 22 distributors have more than 4,000 employees in total, while this report only interviewed a handful of unknown persons (providing only surnames in most cases), including a purported Human Resources manager and others that are simply stated as "being in charge" of certain regional distribution operations or stated as relevant contacts without further supporting evidence.