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Gionee faces bankruptcy as chairman gambles and loses company fund

Gionee faces bankruptcy as chairman gambles and loses company fund

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  24 Dec 2018 11:27 AM GMT

Guwahati: Chinese smartphone manufacturer Gionee has filed for bankruptcy. As 20 suppliers filed an application for bankruptcy reorganization with the Shenzhen Intermediate People’s Court, it has come to light that the smartphone manufacturer is undergoing a bad phase at present.

Reportedly, Gionee had been losing somewhere between $143,804 and $28.7 million every month and such a financial misfortune of the company in such a rapid rate is the most unexpected thing right now. The reason behind the sudden bankruptcy of the smartphone maker has also been stated by a Chinese language Jiemian website. As reported by the website, the Chairman and founder of Gionee, Liu Lirong lost 10 Million Yuan or $1.4 Billion dollars of company fund in gambling at a Casino in Saipan, China. However, the chairman has also clarified that not all money of the company fund is being misappropriated by him as he actually lost $144 million in the gambling.

The bankruptcy liquidation application has been accepted by the court recently. The bankruptcy of the company may very soon result in a complete reorganization of the company along with Liu Lirong being forced to step down or perhaps ousted.

Gionee, since its launch, was one of the leading smartphone brands of China and had also been doing well in India. With a particular feature quality of selfie-focused smartphone, Gionee had about 4.6 percent market share in India in Q1 2017. Not only this, Gionee had also made a place in the list of the top five fastest growing brands costing Rs 15,000 to 30,000 rupee. But in 2018’s second quarter, the smartphone brand faced a sharp decline in worldwide shipments.

At present Gionee has a CNY 20.2 billion or about $3 billion to 648 creditors. There are other brands as well like Micromax, Lenovo and Sony who also are facing turbulence as larger Chinese brands have captured about 87 percent of market share.

The Gionee Chairman before moving towards a casino and put the company funds at risk could have learned from the instance of Warren Buffet who happens to be the third richest man in the world but once had fallen prey to his gambling habits. When at the age of 15, the American octogenarian made up to $175 by selling newspaper and lost it all in betting on a string of horse races.

Also read: Gionee signs Kohli as brand ambassador

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