A recent report by Chinese blog iFeng has unveiled that judicial proceedings towards obtaining bankruptcy protection for Chinese telephone maker Gionee are moving forward thanks to a ruling from Shenzen intermediate people’s court. Sources familiar with the skin hint that the proceedings will lead to a complete overhaul of the company.
Gionee’s financial woes is traced to massive debt incurred as a result of the gambling and extravagant spending problems of the company’s founder and chairman Liu Lirong. The unveield skin at the court is as a result of the filed bankruptcy liquidation application by Huaxing bank against the manufacturer. The skin moreover extends from the financial problems the company had in year 2017. The company’s chairman recently admitted to having gambling aaddiction.Company executives later disclosed details of the founder’s gambling activities stating that as Lots as $143.8 million of the total $2.45 billion in the company’s debt was as a result of his gambling. This is the money owed to an approximate 648 creditors. Mr. Liu Lirong extravagant spending might parallel to an number closer to $1 billion according to a region report. Although the chairman refuted the assertion, it has led to further more hypothesis that gambling is not the only reason behind the missing money.
Few unsubstantiated claims have indicated that the money was deliberately ‘lost at the casino’ so as to channel the money outside China for Mr. Liu Lirong’s personal use. Allegations from this claims may result to further more problems for both the founder and the
company, if there is any proof to confirm them. To avoid liquidation in reference to the case in court, Gionee has recently employed some restructuring expert. The chairman has given some hope that there will be resolution in the
upcoming number of years. However, if there is any claims for more recent accusations against Mr. Liu Lirong then there is
every tendency Gionee will be liquidated in order to pay back debtors. It’s more heading that the chairman will be forced to resign, because reorganization of the manufacturer seems to be to be the heading outcome.