Gionee Goes into Liquidation, Finally Declares Bankruptcy Owes $3 Billion to Creditors

The Chinese manufacturing smartphone company Gionee has now filed for bankruptcy. According to report from a Chinese news platform IFENG. The firm has started the judicial process for bankrupty and a court in Shenzhen has accepted the application for liquidation bankruptcy by Huaxing Bank. 

As at last week, Gionee sought the services of restructuring consultants to provide a plan that will help with its reorganization. The attempts which also have the support of Gionee's CEO, Liu Lirong who thinks that the firm will regian its lost fortunes within three to five years. It is Jinli can do it in three to five years. My biggest wish now, "Lirong revealed in an interview with the Security Times earlier this year.


However, Gionee owes a total of CNY 20.2 billion (around $3 billion) to a total of 648 creditors which includes a large number of suppliers and Ad agencies. About half of the debt is to banks.

Frustrated by Gionee's inability to settle its debts with them, 20 of the creditors filed a lawsuit against the firm with Shenzhen People's Court.

The problem started when the company's chairman lost a whopping sum of $144 million bet in a casino, the incident which occured at a Hong Kong-listed casino in Sapien. When confronted with the reports, Lirong claimed he never used the company's money for personal expenses. However, he later admitted to borrowing from the company's account. His actions pushed the struggling company into its present state.

Liu claims the company was losing around CNY 100 million (14.4 million) a month between 2013 and 2015 which doubled in the last two years.

This might be the end of the Chinese company if nothing happens between three to five years.

What do you think about this let have your comment below.

SOURCE: IFENG

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