Before the listing, the two sides are negotiating the dispute
IT Home on October 12, citing Reuters, reports that Moonshot executives are negotiating with a shareholder to resolve a legal dispute before the initial public offering. The shareholder accuses the executives of misconduct and wants compensation.
Reuters saw a letter that Recurrent.ai's lawyers sent to Moonshot investors on March 11. In it, Recurrent.ai and some of its investors accuse chief executive Yang Zhilin and chief technology officer Zhang Yutao of making false statements to Recurrent's investors and of profiting at Recurrent's expense.
The letter says servers holding key large-language-model data were moved, without authorization, from Recurrent to a Moonshot subsidiary. The letter does not provide evidence. It also says that after Yutong Zhang left Recurrent's board in 2022, she received a large Moonshot stake, and that this fact was deliberately withheld from Recurrent's shareholders. The report uses two different names for Yutong Zhang and Yutao Zhang.
Recurrent and its investors want compensation equal to 10.5 percent of Moonshot's original shares. Reuters previously reported that Recurrent received 9.5 percent of the original shares when Moonshot was founded. The report says it is unclear what 10.5 percent is worth at the current valuation.
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Most of the parties did not answer this request for comment
Published accounts say Yang Zhilin and Zhang Yutao co-founded Recurrent.ai in 2016, founded Moonshot in 2023, and remain directors of Recurrent's holding company. Neither replied to an emailed request for comment. Yang has previously denied the related accusations. Moonshot declined to comment. Recurrent did not reply either.
David Morrison, a partner at the firm representing Yang, Zhang Yutao, and Moonshot, told Chinese media in November 2024 that the case lacked both a legal basis and a factual basis, and that the firm would contest it.
[1]The 2024 arbitration was about something else
The dispute is already in arbitration in Hong Kong, going back to 2024. In November that year, 36Kr, The Paper, and others reported that investors from the Recurrent period had filed at the Hong Kong International Arbitration Centre. The core charge then was that the two founded Moonshot in the same industry without a waiver from those investors. Moonshot answered through counsel that the matter lacked a legal basis and a factual basis. In December 2024, Yang said publicly that before starting again he had every director's signed consent and every required procedure.
That 2024 account is about founding another company in the same industry. The March 11 letter is about false statements, a server transfer, and whether a shareholding was disclosed to shareholders. The report does not present the 2024 consent statement as a direct answer to the server-transfer claim.
[1]The listing plan remains, and the settlement timing is unclear
People familiar with the matter say the dispute is not expected to jeopardize Moonshot's listing plan. An unresolved argument with Recurrent could still raise governance, ownership, and disclosure questions for prospective investors, and could complicate the listing. Those people say it is unclear whether a settlement is close. The Hong Kong stock exchange and the Securities and Futures Commission declined to comment. The China Securities Regulatory Commission and the Cyberspace Administration of China did not reply.
Moonshot confidentially filed a listing application with the Hong Kong exchange in September. Bloomberg reported on October 6 that the company had finished a last private round at a valuation of about $50 billion and was pushing for a Hong Kong listing in the first quarter of 2027, with early investor meetings possibly starting this month. People familiar with the matter say those talks are still underway and the timing can change.
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