A medical device manufacturer that exports fetal heart monitors to 98 countries is grappling with a significant wage arrears crisis. Former employees of Shenzhen Besman Precision Instruments Co., Ltd. have reported that the company has been withholding salaries for an extended period, with arrears now exceeding one million yuan. The company has acknowledged the debts and indicated that bankruptcy restructuring is highly probable.
According to an investigation by the local human resources bureau, the company had previously failed to pay 51 employees a total of more than 3.67 million yuan in wages from March 2025 to January 2026. Despite labor arbitration mediation, many employees say they have not received their full payments on time. When they applied to the courts for enforcement, they discovered the company had no executable assets. The local court has now accepted a bankruptcy liquidation application against the company, and while some employees have received government advance payments for wages, others remain owed amounts ranging from tens of thousands to over one hundred thousand yuan.
When contacted, a company representative confirmed the wage arrears, stating that the total amount owed is around 1 million yuan, involving approximately 30 employees. The representative explained that the company incurred a large funding gap in previous years while preparing for an initial public offering, and the lengthy waiting period for filing severely strained its cash flow. The company now hopes employees will allow it to continue operating while it seeks funding to resolve the wage issues.
Persistent withholding
One former employee, identified as Wu Tao who worked at the company for over four years, recounted that salary delays began a few years ago with small amounts—"sometimes they paid, sometimes they didn't"—but the debts gradually accumulated. The company attributed the issue to cash flow problems and claimed to be seeking bank loans and active financing. Wu stayed despite the delays because he believed the company could survive, and at 54 years old, he feared finding new employment would be difficult. He eventually resigned in April 2026 due to the severity of the arrears.
Sun Zhen, who joined in 2020, also experienced chronic delays. He recalled that his monthly salary of 8,000 yuan sometimes had to be paid in three installments. Between May and October of last year, the company paid him only about 10,000 yuan in total. Another employee, Zhao Rui, joined in 2023 after being informed about potential salary delays. At that time, departing employees generally received their wages within a short period, and the company frequently held meetings to discuss the situation, which gave him confidence it was a temporary setback. However, the situation deteriorated, leading to a wave of resignations. Zhao eventually filed for labor arbitration and left the company, with more than 100,000 yuan in wages outstanding.
A labor inspection penalty decision issued by the Shenzhen Guangming District Human Resources Bureau on June 12, 2026, confirmed that the company had withheld wages from 51 employees totaling 3,675,201.06 yuan. After a rectification notice was issued on April 7, the company still owed 1,558,949.83 yuan. Due to the severity and persistence of the violation, the company was fined 50,000 yuan.
The company was founded in 2001 and is known as a leading brand in fetal monitoring in China and a global leader in Doppler blood flow detectors. It operates as a high-tech medical device company integrating independent research, production, and sales, with certifications including ISO9001 and ISO13485, and products exported to 98 countries across Europe, the Americas, Oceania, Africa, the Middle East, and Southeast Asia.
Pursuing legal recourse
Wu, Zhao, and Sun all applied for labor arbitration and received mediation or adjudication documents requiring the company to pay in installments. However, the company failed to meet its obligations. Their applications for court enforcement all resulted in "termination of the current execution procedure" as the court found no executable property and the company entered bankruptcy proceedings.
A bankruptcy liquidation application was filed by a former employee on the grounds that the company could not repay due debts and clearly lacked solvency. The Shenzhen Guangming District People's Court accepted the application on July 6 this year, confirming that the company has bankruptcy causes. Following the acceptance, the local human resources bureau provided wage advance payments to some employees. Sun received about 40,000 yuan in advance payments, though he claims the company owes him over 200,000 yuan in total. Wu received just over 20,000 yuan, but says he is still owed nearly 77,000 yuan in wages alone. Zhao's application was rejected for not meeting the advance payment conditions, and he still awaits nearly 100,000 yuan.
Employees have filed claims with the bankruptcy administrator. Some report that company staff recently contacted them, requesting an additional year to generate income to pay wages. The financial impact continues—Zhao is burdened with mortgages and loans, Sun supports a daughter in university while carrying a 700,000 yuan mortgage, and Wu's wife faced a cancer recurrence in March, adding to family financial strain.
Company response
A company representative stated on September 8 that the arrears stem from the failed IPO preparations. The company had submitted to the registration process but the prolonged waiting period drained its cash reserves. The listing application was not approved, so it has been shelved for now while the company prioritizes employee matters. The representative emphasized that the company is still operating normally with stable foreign orders, retaining about a dozen veteran employees. However, the funding pressure is too severe to pay off all the arrears at once.
The representative claimed that from around 2024, the company began disclosing its financial situation during recruitment interviews, explaining the wage delay risks and acknowledging debts through mediation documents at local labor departments. Regular staff meetings were held to discuss payment schedules. "The company's attitude has always been to find money as quickly as possible and pay back the employees," the representative said, adding that bank loans remain difficult to secure. The company hopes employees will withdraw the bankruptcy liquidation application to allow continued operations as a means to resolve the wage issue, pledging to honor all remaining debts after government advance payments.
Legal perspective
Yu Hao, a lawyer at Beijing Jingshi (Wuhan) Law Firm, noted that employees hold a strong position in terms of substantive rights—their claims are confirmed by effective legal documents, administrative determinations, and priority in repayment order. The real risk lies in the company's insufficient assets. Employees should shift their strategy from simply urging the company to pay toward closely monitoring the bankruptcy process and exhausting all avenues for asset recovery.
Yu pointed out that under Article 85 of the Labor Contract Law, if an employer fails to pay wages after a government order to rectify, it must additionally pay compensation of 50% to 100% of the unpaid amount. The "informed consent" argument at hiring does not constitute a legal defense, as timely and full payment is a mandatory legal obligation. Similarly, using the IPO funding gap as a justification does not exempt the company from liability. Employees forced to resign are also entitled to economic compensation.
On the bankruptcy procedure, Yu clarified that employee claims enjoy first-priority status, but this only addresses the "queue order," not the "amount available in the pot." Since the company has no cash, the recovery rate depends on the administrator's asset collection results. Regarding the wage advance payment mechanism in Shenzhen, employees dissatisfied with a rejection can request a detailed explanation, apply for administrative reconsideration, or file an administrative lawsuit.
Yu also addressed the company's request for employees to withdraw the bankruptcy application—this is legally impractical. Under Article 9 of the Enterprise Bankruptcy Law, withdrawal of the application is only permitted before the court accepts the case. The legitimate path for the company to continue operations and repay debts through income would be bankruptcy reorganization or conciliation. If the company genuinely has stable overseas orders and brand value, successful reorganization could yield higher recovery than liquidation. However, employees should demand that any reorganization plan be formalized as a draft reorganization plan with binding effect through creditor voting, and should scrutinize the feasibility of the business plan and the credibility of investors.
Yu advised employees to coordinate with the bankruptcy administrator to comprehensively declare and verify their claims, ensuring wages, economic compensation, and losses from unpaid social insurance and housing fund are all included. They should also request the administrator to investigate the company's assets, focusing on shareholder capital contributions, signs of capital withdrawal or transfer, unusual income of directors and supervisors, and overseas receivables. Those eligible for advance payments who were rejected should promptly correct any documentation deficiencies or initiate reconsideration or litigation. If there are signs of the company hiding or transferring assets, employees should report to the administrator and reserve the right to file a criminal complaint for refusal to pay labor remuneration.
Ultimately, Yu emphasized that employees should not rely solely on verbal promises but should base their decisions on formal legal documents approved through creditor meetings and court confirmation.