Gionee Goes Bankrupt Amidst Scandal

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Gionee Goes  Bankrupt Amidst Scandal
By Pelumi Olaleye
Gionee Communication Equipment Co. Ltd, Chinese smart phone manufacturer and makers of  Gionee ,Xiaomi, OPPO and BLU phones have  filled for bankruptcy.
According to reports, the company’s founder and chairman reportedly lost CNY 10 billion ($ 1.4 billion approximately) in a bet at a casino. However, other reports later indicated that Lirong had lost close $144 billions.  Though, he had denied initially using company’s funds for personal reasons. He however ,admitted to borrowing some of the company’s funds.
The company was founded  in September 2002 by Liu Lirong. It is a high-tech enterprise that focuses on R&D, production and sale of cellular mobile devices.
 A Shenzhen-based court has accepted the debt-ridden company’s application for liquidation bankruptcy that was filed by the Huaxing Bank against Gionee.
As at August, Gionee owes ¥20.2 billion, estimated to be $2.9 billion USD, to 648 creditors. Reports also suggest that the company hasn’t paid its ad agencies and suppliers.
The non-payment of dues reportedly forced 20 of the Chinese smartphone maker’s major suppliers to file a lawsuit against the company with the Shenzhen People’s Court.
According to agency  report, the phone maker has officially entered the judicial process for bankruptcy, the liquidation bankruptcy filing doesn’t stop the company from saving itself.
As at last week, a restructuring consultant was hired to create a plan for the organization that would allow it to emerge out of this situation.
According to the chairman, Liu Lirong in a recent interview , said  the company has officially hired restructuring consultants to formulate a plan to reorgnise the company last week.
“It is expected that the bankruptcy reorganization process will be entered next month, and then the court will take over. My biggest wish now is, that the company could still turn around its fortune in three to five years.”

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