China's bicycle-sharing company Mobike Technology sued a Shanghai-based company for equipping its shared bikes with seat covers printed with advertisements, according to a Friday report by cnr.cn, the official website of China National Radio.

Since November, local citizens have found shared bikes on the streets in Chengdu, Southwest China, taking on a new look with white seat covers. On closer examination, they found the covers printed with advertisements.

"The actions of the defendant not only harm the image of Mobike but also create costs in the process of cleaning up the ads," said Sun Keqing, legal supervisor of the company, adding Mobike will continue to seek legal action to crack down on posting illegal ads on its shared bikes.

Mobike asked for compensation of 1 million yuan ($151,293) and demanded an immediate halt on installing seat covers showing advertisements.

The company launched a hotline Friday for tipoffs on illegal ads and planned to set up a databank on illegal ads on shared bikes.

Mobike also requested the Shanghai company to make a public announcement to alleviate the negative impact of the unauthorized actions.