Widely known smartphone company ‘GIONEE’ has officially filed for bankruptcy. According to a Chinese news website, the Shenzhen Intermediate People’s Court has accepted Gionee’s bankruptcy liquidation application.
The company was already in debt since over a year and its chairman Lirong’s extreme gambling habits did the further damage. As of August 2018, the total debt was about 20.2 billion yuan and 648 creditors. Gionee founder and chairman Liu Lirong claimed that the company was losing around CNY 100 million ($14.4 million) per month between 2013 and 2015.
Few reports had revealed that Liu Lirong had lost around one billion yuan ($144-million) due to gambling. Since the past few years, the company has been repeatedly failing in paying their suppliers. When his ‘gambling habits’ were exposed, Liu Lirong claimed that he didn’t use his company’s money to gamble but he did admit to having borrowed company funds.
Apart from suppliers, Gionee hasn’t paid ad-agencies either. Gionee had plans to invest a massive amount of money in India to try and be one of the top five smartphone brands in the country. However, the plan is no more feasible. But Liu Lirong hasn’t given upon his company yet. He believes he can turn around the fate of the company in the next 5 years.