Gionee has officially entered bankruptcy.
A court in Shenzhen has accepted the bankruptcy application, which will now put the company at a crossroads.
As of August, Gionee owes ¥20.2 billion, which is roughly around $2.9 billion USD, to 648 creditors. Despite this immense amount being owed, the founder of Gionee, Liu Lirong, states that he’d like to see a turnaround in three to five years. As of last week, a restructuring consultant was hired to create a plan for the organization that would allow it to emerge out of this situation.
Gionee’s money troubles were exacerbated when Liu – founder and chairman – lost a CNY 1 billion bet in a casino. That’s a whopping $144 million! He claims he didn’t use company money, but admits he may have “borrowed company funds”. Like we said, this story would make quite a movie.
For comparison, Liu claims that the company was losing around CNY 100 million ($14.4 million) a month between 2013 and 2015. The losses per month doubled in the last two years.