Gionee fails to pay suppliers, nears bankruptcy: Report
Gionee’s chairman Liu Lirong lost over $144 million in gambling at a casino while the company owed over $2.45 billion to its suppliers, marketing agencies and advertisers.Updated: Dec 01, 2018 12:01 IST
Chinese smartphone maker Gionee, which was once one of the top smartphone players in India, is on the verge of bankruptcy.
According to Securities Times via South China Morning Post, Gionee has failed to make payments to its suppliers and is in talks for a closure deal. This however does not include 400 smaller companies which have not received the payment from Gionee yet, reported GSMArena. The company owes over $2.45 billion to different suppliers, marketing agencies and advertisers.
Gionee’s shift in fortunes comes shortly after its chairman Liu Lirong lost over $144 million while gambling at a casino in Saipan. According to Securities Times, Lirong didn’t misuse Gionee’s money but was “borrowing company funds.”
The Chinese smartphone maker hasn’t exited the market yet, though. The company is still selling devices in China and India. ALSO READ: Gionee S11 Lite and Gionee F205 launched in India
Earlier this year, Gionee planned to sell its India unit to its former India CEO and minority shareholder Arvind R Vohra, and promoters of the Indian handset maker Karbonn Mobile. There’s no word on whether the deal finally saw light of the day.
Gionee last year took control of its India operations. Then India CEO Arvind Vohra had to step down after running the company for about five years.
Vohra, however, continued to serve as Executive Director as he owned 26% shares in the company. Later, China’s court reportedly froze Lirong’s 41.4% stake for two years over “gambling debts.”
Gionee entered the Indian market in 2013. In the next couple of years, Gionee raced to the top in the country. The company launched a wide range of phones, including the world’s slimmest phone, Elife S5.1.
In 2016, Gionee roped in Alia Bhatt as a brand ambassador to target young users in India. Just last year, it had appointed Bahubali’s Prabhas as its brand ambassador. With 4.6% market share, the company was among the top players in the selfie-phones segment in 2017.
According to an Android Authority report, Gionee registered a sharp decline in the second quarter of this year. The decline continued in the third quarter of this year while top three brands Huawei, Vivo and Oppo combined accounted for over 60% of the China market.
First Published: Nov 30, 2018 14:44 IST