Ofo and Mobike deny embezzlement of users' deposits

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Chinese bike-sharing giants Ofo and Mobike have both denied diverting users' deposits, ifeng.com reported.

The two companies were responding to a previous report by lanjinger.com where an industry insider revealed that Ofo and Mobike have used up to 6 billion yuan of users' deposits to "fill the funding gap."

The report said the two start-ups are facing financial problems due to aggressive market expansion, and have already suspended payment to their providers.

The report also noted that Wang Xiaofeng, CEO of Mobike, was quoted as admitting his company did use part of the users' deposits to purchase financial products.

Later that afternoon, Mobike expressed "strong condemnation" of the report, saying it is "in serious discord with the facts."

In its public announcement, the company stressed its users are "free to claim their deposits at any time."

Ofo also announced that the company "strictly ensures the security for users' deposits," noting "all refund methods are now functioning well."

China's bike-sharing industry has undergone a wave of reshuffling this year, as various companies have shut down due to funding problems or poor management, including the country's third-largest bike-sharing start-up Bluegogo.

At the same time, the two market leaders -- Ofo and Mobike -- seem to be exploring a global picture.

Ofo announced Wednesday that it is set to enter India, and Mobike launched services in Berlin on November 21.

The two giants are both worth more than 10 billion yuan (1.5 billion U.S. dollars), according to Xinhua News Agency.

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