XML 50 R32.htm IDEA: XBRL DOCUMENT v3.21.1
Note 26 - Related Parties
 12 Months Ended
Dec. 31, 2020
Statement Line Items [Line Items]  
Disclosure of related party [text block]
NOTE 
26.
RELATED PARTIES
 
At the time of the transactions described in this note, the Group's Chairman and Chief Executive Officer had control or significant influence over Beijing Kunlun Online Network Tech Co Ltd, Beijing Kunlun Tech, Kunlun Group Limited, Mobimagic Digital Technology Ltd, Nanocred Cayman Company Limited, OPay Limited, Star Group Interactive Inc. (formerly known as StarMaker Interactive Inc.) and Ying Liang Limited, either directly or through other investments.
 
The Group has significant influence over OPay Limited and Star Group Interactive Inc. through ownership interests in those entities. Moreover, the Group has joint control over nHorizon by having contractually agreed to the sharing of control.
 
In mid-
2019,
the Group entered into service agreements with Mobimagic Cayman Co. Ltd. (formerly Mobi Magic (Beijing) Information Technology Co., Ltd.) and Hong Kong Fintango Limited under which these parties would provide app, systems and platform maintenance, and data processing services as well as managerial oversight to P C Financial Services, an entity that provides microloans in India and which was a subsidiary of TenSpot Pesa Limited and the Group until
August 19, 2020,
at which point in time it was disposed of as disclosed in Note
9.
 Under the agreements, the Group paid a combination of fixed and variable fees that were calculated based on revenue less credit losses and indirect taxes.
 
Effective from
January 1, 2020,
the Group entered into an investment advisory and management agreement with Kunlun Group Limited. Under the agreement, Kunlun Group Limited provides investment management services to the Group, as disclosed in Notes
23
and
24.
In exchange for the services provided, the Group is obligated to pay an investment management fee, subject to the discretion of the Group's Chairman and CEO but limited to
8%
of the net gain from the investment activity. In
2020,
the investment management fee was
US$0.5
million, equivalent to
4%
of the net gain in
2020.
 
 
On
March 3, 2020,
the Group entered into an agreement with OPay Digital Services Limited, a subsidiary of OPay Limited, for the sale of
100%
of the shares in Neofin Malelane (PTY) Ltd., a subsidiary of the Group, in exchange for
US$0.1
million. Moreover, on
March 17, 2020,
the Group entered into an agreement with the same entity in the OPay group for the sale of
100%
of the shares in the Group's subsidiary Blue Ridge Microfinance Bank Ltd. in exchange for a consideration of
US$5.0
million. While the Group has an unconditional right to payment in cash, the Group expects to settle the receivable by converting it to equity in OPay Limited in a future funding round. The loss of control over Neofin Malelane (PTY) Ltd and Blue Ridge Microfinance Bank resulted in the Group recognizing a gain of
US$5.3
million in the Statement of Operations for
2020.
 
On
May 19, 2020,
the Group provided a loan of KES
200
million, equivalent to
US$1.9
million, to OStream Credit Limited, a subsidiary of OPay Limited. The loan was provided with a simple interest of
8%
per annum. The loan was repaid on
October 19, 2020.
In
2020,
the Group recognized interest income of
US$62
thousand from the loan.
 
On
August 19, 2020,
the board of directors of the Company approved a transaction in which TenSpot Pesa Limited, a wholly owned subsidiary at the time, was to be contributed to a subsidiary of NanoCred Cayman Company Limited (“Nanobank”) in exchange for the Group obtaining an ownership interest of
42%
in Nanobank. As part of the transaction, the Group agreed to transfer receivables due from TenSpot Pesa Limited to Nanobank. The transaction was completed on the same date. Prior to the transaction, Nanobank was controlled by the Group's Chairman and CEO. Additional information on the transaction is provided in Notes
9
and
13.
 
 
The Group provides and receives professional services to a number of other related parties.
 
Services received from Beijing Kunlun Tech consist of shared office facilities in Beijing, China.
 
Services provided to OPay consist of development and key management personnel services and have been invoiced based on time used. Services received from Mobimagic Digital Technology Ltd are related to distribution and promotion of the Group's products worldwide. Mobimagic Digital Technology Ltd was initially a subsidiary of the Qihoo
360
group, later invested into by other investors, including Mr. Yahui Zhou. The Qihoo
360
group and Mr. Yahui Zhou were also
two
of the original shareholders of Opera Limited. Both Opera and Mobimagic Digital Technology Ltd have a need to promote their apps through mobile advertising on
third
-party advertising inventory. As the
two
companies have operated under overlapping control, it was decided to take advantage of the combined volume of advertising to be procured in order to achieve the most attractive pricing from
third
parties; hence the partnership. As of
December 31, 2020,
the Group had provided prepayments to Mobimagic Digital Technology Ltd for distribution and promotion services as part of an agreement where Mobimagic Digital Technology Ltd accepted financial risk related to the retention of acquired new users. The prepayments had a carrying amount of
US$3.8
million as of
December 31, 2020,
compared to
US$15.5
million as of
December 31, 2019,
while the carrying amount had reached US$
nil
as of the date of this report.
 
On
November 11, 2020,
an addendum was made to the partnership agreement between the Group and Mobimagic Digital Technology Ltd., when the latter party assigned its rights and obligations under the existing agreement to Ying Liang Limited. In
2020,
the Group purchased marketing and distribution-related services from Ying Liang Limited for
US$3.7
million.
 
Additional information about transactions with associates and joint ventures is included in Note
13.
 
Outstanding balances as of
December 31, 2019
and
2020
are unsecured and interest free, except as outlined above, and settlement occurs in cash. There have been
no
guarantees provided or received for any related party receivable or payable.
 
[US$ thousands]
          
As of December 31,
  
Balances with related parties
  
Category of related party
  
Type of balance
  
2019
    
2020
  
Beijing Kunlun Lexiang Network Technology Co., Ltd.
  
Key management personnel
  
Other payables
    
-
      
(15
 )
Beijing Kunlun Online Network Tech Co., Ltd.
  
Key management personnel
  
Other payables
    
-
      
(45
 )
Beijing Kunlun Tech Co., Ltd.
  
Key management personnel
  
Other payables
    
(177
 )    
(773
 )
Beijing Kunlun Tech Co., Ltd.
  
Key management personnel
  
Trade receivables
    
-
      
13
  
Beijing OFY Co., Ltd.
  
Associate / Key management personnel
  
Trade receivables
    
-
      
51
  
Beijing Xianlaihuyu Network Tech Co., Ltd.
  
Key management personnel
  
Other payables
    
-
      
(5
 )
Blue Ridge Micro Finance Bank Ltd.
  
Associate / Key management personnel
  
Trade payables
    
-
      
(30
 )
Kunlun Global International Sdn. Bhd.
  
Key management personnel
  
Other payables
    
-
      
(8
 )
Kunlun Group Ltd.
  
Key management personnel
  
Trade payables
    
(436
 )    
(520
 )
Kunlun Tech Ltd.
  
Key management personnel
  
Trade receivables
    
-
      
568
  
Mobimagic Digital Tech. Ltd.
  
Key management personnel
  
Distribution prepayment
    
15,527
      
3,848
  
Mobimagic Digital Tech. Ltd.
  
Key management personnel
  
Trade and other payables
    
(2,760
 )    
-
  
Mobimagic Cayman Co. Ltd.
  
Key management personnel
  
Trade receivables
    
303
      
-
  
Mobimagic Cayman Co. Ltd. / Hong Kong Fintango Ltd.  
Key management personnel
  
Trade and other payables
    
(25,598)
      
-
  
Nanocred Cayman Company Limited and subsidiaries
  
Associate / Key management personnel
  
Other receivables
    
-
      
138
  
nHorizon Infinite (Beijing) Software Ltd.
  
Joint venture
  
Trade receivables
    
-
      
278
  
nHorizon Innovation (Beijing) Software Ltd.
  
Joint venture
  
Revenue share liability
    
(23
 )    
(23
 )
nHorizon Innovation (Beijing) Software Ltd.
  
Joint venture
  
Trade receivables
    
146
      
-
  
nHorizon Innovation (Beijing) Software Ltd.
  
Joint venture
  
Professional service payable
    
(543
 )    
(533
 )
OPay Digital Services Ltd.
  
Associate / Key management personnel
  
Loan receivable
    
-
      
-
  
OPay Digital Services Ltd.  
Associate / Key management personnel
  
Trade receivables
    
17,450
      
615
  
OPay Digital Services Ltd.  
Associate / Key management personnel
  
Contract liability
    
(6,274
 )    
-
  
OPay Digital Services Ltd.  
Associate / Key management personnel
  
Other receivables
    
-
      
5,000
  
Paycom Nigeria Ltd.
  
Key management personnel
  
Trade receivables
    
1,466
      
-
  
Paycom Nigeria Ltd.
  
Key management personnel
  
Trade and other payables
    
(26
 )    
(136
 )
Powerbets Holdings Ltd.  
Joint venture
  
Loan receivable
    
3,039
      
-
  
Powerbets Holdings Ltd.  
Joint venture
  
Trade receivable
    
6,579
      
-
  
Starmaker Entertainment Technology India Pvt., Ltd.
  
Key management personnel
  
Trade receivables
    
22
      
-
  
Wisdom Connection III Holding Inc.
  
Key management personnel
  
Other receivables
    
500
      
500
  
Xinyu Kunnuo Investment Management Co., Ltd.  
Key management personnel
  
Other payables
    
-
      
180
  
Ying Liang Ltd.
  
Key management personnel
  
Distribution prepayment
    
-
      
22
  
Ying Liang Ltd.
  
Key management personnel
  
Trade and other payables
    
-
      
(3,673
 )
Ying Liang Ltd.
  
Key management personnel
  
Trade receivables
    
-
      
209
  
 
[US$ thousands]
          
Year ended December 31,
  
Transactions with related parties
  
Category of related party
  
Type of transaction
  
2018
    
2019
    
2020
  
Beijing Kunlun Tech Co., Ltd.
  
Key management personnel
  
Office facilities
    
(1,072
 )    
(1,545
 )    
(1,533
 )
Beijing Kunlun Tech Co., Ltd.
  
Key management personnel
  
Technology licensing and other revenue
    
-
      
13
      
-
  
Beijing Kunlun Tech Co., Ltd.
  
Key management personnel
  
Professional services
    
-
      
(30
 )    
-
  
Beijing Kunlun Lexiang Network Technology Co., Ltd.
  
Key management personnel
  
Professional services
    
-
      
(79
 )    
(15
 )
Beijing Kunlun Online Network Tech Co., Ltd.
  
Key management personnel
  
Professional services
    
-
      
(125
 )    
(44
 )
Beijing Xianlaihuyu Network Tech Co., Ltd.
  
Key management personnel
  
Professional services
    
-
      
(39
 )    
(5
 )
Beijing OFY Co., Ltd.
  
Associate / Key management personnel
  
Technology licensing and other revenue
    
-
      
-
      
543
  
Kunlun Global International Sdn. Bhd.  
Key management personnel
  
Advertising revenue
    
68
      
2
      
-
  
Kunlun Global International Sdn. Bhd.  
Key management personnel
  
Professional services
    
-
      
-
      
(8
 )
Kunlun Group Ltd.
  
Key management personnel
  
Professional investment advisory services
    
-
      
(436
 )    
(582
 )
Mobimagic Digital Tech. Ltd.
  
Key management personnel
  
Technology licensing, advertising and other revenue
    
3,069
      
-
      
496
  
Mobimagic Digital Tech. Ltd.
  
Key management personnel
  
Marketing and distribution
    
(7,522
 )    
(25,767
 )    
(9,719
 )
Mobimagic Digital Tech. Ltd.
  
Key management personnel
  
Software license fees
    
-
      
(500
 )    
-
  
Mobimagic Cayman Co. Ltd.
  
Key management personnel
  
Technology licensing and other revenue
    
-
      
303
      
596
  
Mobimagic Cayman Co. Ltd. / Hong Kong Fintango Ltd.
  
Key management personnel
  
Technology and platform fees
    
-
      
(25,598)
      
(23,007
 )
Mobimagic Cayman Co. Ltd.
  
Key management personnel
  
Professional services
    
-
      
(325
 )    
-
  
nHorizon Innovation (Beijing) Software Ltd.
  
Joint venture
  
Technology licensing and other revenue
    
(18
 )    
146
      
-
  
nHorizon Innovation (Beijing) Software Ltd.
  
Joint venture
  
Content cost
    
(45
 )    
(38
 )    
-
  
nHorizon Infinite (Beijing) Software Ltd.
  
Joint venture
  
Professional services
    
(941
 )    
(156
 )    
-
  
nHorizon Infinite (Beijing) Software Ltd.
  
Joint venture
  
Technology licensing and other revenue
    
-
      
-
      
133
  
OPay Digital Services Ltd.
  
Associate / Key management personnel
  
Acquisition of business
    
(9,500
 )    
-
      
-
  
OPay Digital Services Ltd.  
Associate / Key management personnel
  
Investment
    
-
      
(7,131
 )    
-
  
OPay Digital Services Ltd.  
Associate / Key management personnel
  
Technology and platform fees
    
(455
 )    
-
      
-
  
OPay Digital Services Ltd.  
Associate / Key management personnel
  
Technology licensing and other revenue
    
10,899
      
15,960
      
7,626
  
OPay Digital Services Ltd.  
Associate / Key management personnel
  
Interest income
    
-
      
323
      
-
  
OPay Digital Services Ltd.
  
Associate / Key management personnel
  
Other income
    
-
      
-
      
5,289
  
Paycom Nigeria Ltd.
  
Associate / Key management personnel
  
Advertising and other revenue
    
-
      
1,565
      
866
  
Powerbets Holdings Ltd.  
Joint venture
  
Technology licensing, advertising and other revenue
    
4,369
      
2,210
      
-
  
Puto Novi Financing Corporation  
Key management personnel
  
Finance income
    
-
      
-
      
97
  
StarMaker Interactive Inc.
  
Key management personnel
  
Investment
    
(30,000
 )    
-
      
-
  
StarMaker Interactive Inc.
  
Key management personnel
  
Professional services
    
175
      
150
      
-
  
Wisdom Connection III Holding Inc.
  
Key management personnel
  
Other revenue
    
-
      
8
      
-
  
Wisdom Connection III Holding Inc.
  
Key management personnel
  
Disposal of shares in associates
    
-
      
500
      
-
  
Xinyu Kunnuo Investment Management Co., Ltd.  
Key management personnel
  
Professional services
    
-
      
-
      
180
  
Ying Liang Ltd.
  
Key management personnel
  
Marketing and distribution expenses
    
-
      
-
      
(3,716
 )
Ying Liang Ltd.
  
Key management personnel
  
Technology licensing and other revenue
    
-
      
-
      
209