(Yicai Global) May 28 -- Ofo, one of China's big two bike-sharing brands, has refuted claims it could bring in a round of pay cuts and layoffs to boost capital, calling the reports "malicious and unsubstantiated," according to online news outlet Ifeng.

The brand's operator Beijing Bikelock Technology Co. was also reportedly making aggressive moves to sell advertising space on its bicycles as a means to avert a capital chain crisis, AI Finance & Economics reported the company's staff as saying last week.

In its response, Ofo said that while plans for pay and job cuts were false, bike body advertising was a normal part of its business exploration. The firm has not implemented wage reductions before and is actually in the process of finalizing plans for pay rises this month.

Bike body advertising represents a significant opportunity for revenues thanks to the huge market in China, the firm said, adding that it has always strictly adhered to relevant government policy requirements on sales.  

There has been a steady stream of reports since the turn of the year that Ofo's capital chain is tight. Jiemian News reported in mid-May, that several Ofo employees had held a protest outside Shanghai Jingan District Labor and Personnel Dispute Arbitration Institute, holding banners reading, 'Ofo maliciously laid off workers and refused to buy social security insurance.'

At that time, a representative of the company said there had been no malicious layoffs as described in the banners and those employees participating in the action still worked for the company.

Editor: William Clegg