The embattled tech company, Gionee has filed for bankruptcy. Speculations suggest that a court in Shenzhen has accepted the troubled phone maker’s application for liquidation which was presented against it by the Huaxing Bank.
According to reports from Chinese news platform, IFENG the firm has started the judicial process for bankruptcy. However, the company might change this idea and decide to reorganize itself. In other words, the company can seek alternative methods of staying afloat even with the court proceedings.
As at last week, Gionee has sought the services of restructuring consultants to provide a plan that will help with its reorganization. These attempts which have the support of Gionee’s CEO, Liu Lirong who expects that the firm will regain its lost glory within three to five years.
“It is expected that the bankruptcy reorganization process will be entered next month, and then the court will take over. 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.
Strikingly, the tales of woe plaguing the tech company looks like something out of a classic novel. The troubles started when Gioneee experienced financial crises last year with the company owing about $3 billion to a total of 648 creditors which include a large number of suppliers and ad agencies.
Frustrated by Gionee’s inability to settle its debts with them, 20 of the creditors filed a lawsuit against the firm with the Shenzhen People’s Court.
However, the troubles got worse after Liu Lorong lost a significant amount of the company’s funds in a gambling bet. Reports from the Chinese media claims he that this incident occurred at a Hong Kong-listed casino in Saipan.
The amount lost stands at $ 1.4 billion however there are reports which indicates he lost as much as $144 billion. When confronted with these 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.