Trending reports suggest that a Shenzhen-based court has accepted the debt-ridden company's application for liquidation on bankruptcy that was filed by the Huaxing Bank against Gionee.
According to a report by China-based news platform, IFENG, the Chinese Smartphone maker, has officially entered the judicial process for bankruptcy, the liquidation on bankruptcy doesn't stop the company from saving itself.
It was gathered that the company officially hired restructuring consultants to formulate a plan to reorganize the company last week. These efforts come as a push from the company chairman Liu Lirong who believes that the company could still turn around its fortune in three to five years. "It is expected that the bankruptcy reorganization process will be entered next month, and then the court will take over"
Notably, the story of Chinese Smartphone maker, Gionee, is full of bizarre twists and turns. Gionee entered into a state of financial crisis in 2017 and the company now owes a total of CNY 20.2 billion (approximated at $3 billion) to 648 creditors. Findings also suggest that the company hasn't paid its advert agencies and suppliers whopping sum of money.
Also, the non-payment of dues reportedly forced 20 out of the Chinese Smartphone maker's major suppliers to file a lawsuit against the company with the Shenzhen People's Court.
However, the dramatic twist came when the company's chairman lost a vast amount of the company's limited funds in a gambling bet. The company founder and chairman reportedly lost CNY 10 billion (approximated at $ 1.4 billion) in a bet at a casino. However, other reports later indicated that Lirong had lost close to $144 billion.
Additionally, responding to the reports at the time, Lirong had denied using the company's funds for personal reasons. However, later he admitted to borrowing some of the company's funds. His lost gambling bet is what forced Gionee on the verge of bankruptcy.