An agreement is yet to be reached.

The factory has suspended production and all the equipment has been packed for asset evaluation. The company has not bought any materials for production at present, a deputy general manager of the company surnamed Huang was quoted in the Beijing News.

"The workers are in a panic. They feel the boss is likely to flee," said Huang.

The company is also involved in a wage arrears dispute worth 2.7 million yuan ($436,893), said Huang.