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BEIJING, December 18 (TMTPost) -- With the sacking of its then-CEO Sun Dongxu and the promotion of Dong Yuhui, a super popular livestreamer with myriads of followers in China, a whirlwind surrounding East Buy (01797.HK), a subsidiary of private tutoring giant New Oriental, has finally come to an end.

On Monday morning, East Buy released a poster about a livestreaming event at 8:00 p.m. on Monday through its official social accounts, when Dong, who has been off the air for days, will join New Oriental’s founder Yu Minhong for the event.

In the poster, Dong's position has been officially updated from “top livestreamer” to "senior partner of East Buy", the same level as vice president (VP). Dong also holds a 0.5% stake in East Buy, according to market rumors.

New Oriental released a document on Monday afternoon, which reads that Dong was appointed as Cultural Assistant to the Chairman of New Oriental Education & Technology Group and Vice President of New Oriental Cultural Travel Group.

Luo Yonghao, a famous internet celebrity in livestreaming, revealed on Sunday that he had received reliable news from TikTok and the executives of the East Buy. It is said that Dong had received sky-high remunerations after the dispute, although the exact number is unknown. Luo said that he believed that Dong should have received a very generous compensation, which is a victory for Dong’s fans.

Affected by this, the share price of East Buy once soared 17.71% after the opening of the Hong Kong stock market on Monday. As of the end of the morning session, it was traded at HK$30.3, up 15.43%, with a turnover of 1.695 billion HKD. The share of East Buy closed at HK$32, up 21.9% from the previous trading day.

Meanwhile, the number of fans of Dong and East Buy has further jumped. As of 7:00 a.m. on Monday, Dong's account had 21.247 million followers, an increase of nearly 1 million compared to 20.249 million at 9:30 a.m. on Sunday. And the number of fans of East Buy's account also rose to 28.806 million and continues to grow.

Last Thursday Yu acknowledged significant lapses in the company's management in a video, after criticizing an employee for using the company’s official account to express personal grieves. An editor of East Buy’s official account on Douyin, the Chinese version of TikTok, claimed that Dong didn’t write the full script of the video clip about trips to Jilin province in northeastern China. This statement led to a heated debate between the editor and Dong’s fans, in particular middle-aged women.

"The reason why Dong’s fans are so angry is that such statement gives a misleading impression that his talent is not genuine," a netizen commented .

Last Tuesday, Sun revealed that Dong’s annual compensation exceeded ten million yuan, further infuriating Yu’s fans.

Regarding the recent controversy, Yu said on Sunday in the fourth China Vocational Education Development Forum: "With the advancement of modern society, the boss must willingly work for the employees. You will become partners if you go in the same direction. If not and the employee is competent, then break up amicably."

"Many bosses still act arrogantly, managing the company in a condescending manner. It may be okay in traditional companies, but that’s problematic in a modern company," Yu noted.

Yu believed that the cause for East Buy’s problem lies in its failure to reverse its way of team management. For excellent employees, the traditional model of management may work for a period of time by relying on friendship, but it is bound to cause problems in the long run.

On Sunday evening, East Buy officially announced on the Hong Kong Stock Exchange that Sun was removed from his position as the company’s Chief Executive Officer and Executive Director with immediate effect.

TMTPost noted that Sun is still on the list of East Buy's board of directors as a non-executive director but he is absent from the Audit Committee, Remuneration Committee and Nomination Committee.

East Buy stated that the change in Sun's position was because of his mismanagement of the company's brand and reputation. The board believed that Sun's removal will better safeguard the interests of the company's shareholders, thereby allowing more experienced directors to take over the management of the company. Sun confirmed that he has no disagreement with the board and has no claim against East Buy as at the date of the announcement.

The Board of East Buy has appointed Yu to concurrently serve as Chief Executive Director with immediate effect.

Some analysts pointed out that Dong and Sun's personal relationship has been strained and is beyond repair. The person to blame is former CEO Sun, who is still stuck in the management mode of the tutoring industry.

The analysts said, there is a simple way for East Buy to end the controversy. Yu can establish a partnership system, and select Dong as the company's senior partner to set up a new team. In this way, Dong can report directly to Yu and the Board of Directors. Following such steps, other competent employees can also be promoted to partners in the future. Such system can both ensure the staff's following promotion, and be used to lure well-known anchors into East Buy. As for the supporting management, incentives, constraints, Yu can learn from other mature partner system enterprises.

"For East Buy, allowing Dong to form a brand new team will only have benefits. With a very large number of fans, Dong’s personal account can be used as the main work account (as to how the company manages or collects the personal account is discussed internally). Yu, by this way, can protect the East Buy and Dong, but also allows a healthy competition between Dong’s team and Sun’s team. Kill two birds with one stone," The analyst summarized

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