In the early and mid-2010s, the brand Gioni began to establish itself as a serious player in China in the production and export of mobile phones, competing at the time with brands such as Huawei or Xiaomi. Their phones even migrated overseas and to the US under the BLU banner and also managed to tap into the gigantic Indian market.
But a series of wrong decisions and, in fact, severe gambling addiction on the part of President Liu Lirong led to everything collapse.
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Fall of Gionea
According to various Chinese media reports at the time, Gionee began having problems paying its suppliers in late 2017, according to Android Authority. This is despite the fact that the company apparently had a net profit of 760 million yuan (~$104 million). ) in the first half of the year, and its cash balance was reported to be RMB 1.03 billion (~US$142 million).
But Liu Lirong began to borrow (or rather, indiscriminately) money from the company.
“I founded Gionee 16 years ago and have always been the absolute authority in the company. “I have no other income, so it is inevitable that I mixed public and private life in my life and borrowed funds from the company,” Lirong said in a Securities Times report.
But why did he want to borrow money from his company? Liu lost 10 billion yuan (~$1.37 billion) due to gambling in Saipan. However, the president said that he actually lost “several billion.” Nothing serious, just a few billion. The company’s shareholders estimate that it has delivered six billion yuan (~$825 million).
When Gionee started having financial troubles, the company still had strong relationships with most of its supply chain partners. It is believed that suppliers initially decided to work with the smartphone brand when the company’s debts first became known. However, Liu claimed that these companies stopped supplying parts for Gionee when his game was released.
Gionee went bankrupt in December 2018, but the company’s Indian division was acquired by Indian brand Karbonn Mobiles.
Source: Digital Trends
