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Gionee files for bankruptcy, owes almost $3 billion to creditors : Report

A few years back, when there was a sudden influx of cheap and attractive Chinese smartphones into the Indian market, Gionee was a work-horse of sorts while entering this market. It came in along with rivals such as Xiaomi, Vivo, Huawei, and Oppo. The company amassed over 12.5 Million customers in the country.

But over the past few years, the company has been on a decline in spite of putting out phones on a regular basis. Gionee is said to have lost CNY 100 million ($14.4 million) each month between 2013 and 2015. This led to Gionee recently filing for Bankruptcy. Chinese news website Phoenix Network Financial News reported that the Shenzhen Intermediate People’s Court has accepted the “bankruptcy liquidation application”.

The company had been grappling with debts for over a year. And things took a turn for the worse when their Chairman Liu Lirong prodigally gambled away CNY 1 billion during a gambling spree recently at a casino in Saipan. While the executives maintain that he did not use any of the company’s company, Lirong admitted that he might have “borrowed company’s funds”.

The company had reportedly failed to pay its suppliers and nearly 20 of them filed for bankruptcy. Gionee is currently in a deep debt of CNY 20.2 billion (approx $3 billion) owing to 648 creditors. Inspite of being in a financial crisis, Gionee founder, Liu Lirong believes the company can witness a turnaround with three to five years.

While the company was once immensely popular in the Indian and Chinese market, it never made it to the American or the European market. This year, the company slacked off even in the Indian market putting out just a couple of unremarkable phones. This turnaround Liu expects would be extremely challenging given the cut-throat competition in the Indian mid range smartphone space.


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