Smartphone Company Broke After Owner Loses $144m Betting

You may have heard of Gionee, a Chinese smartphone company and you can see some of their phones being sold here locally. There is some bit of interesting news about the company and it involves gambling apparently.

According to the South China Morning Post, Gionee is on the verge of bankruptcy thanks to the founder admitting he may have used company assets to gamble in a Hong Kong listed casino.

Liu Lirong, Gionee’s chairman and CEO had an interview with Securities Times, a local paper, responding to claims that his $1.44 billion  gambling had resulted in the collapse of Gionee. When he was asked how much he had lost to gambling, Liu told the Security Times reporter that it was a bit more than 1 billion yuan, which is $144 million.

He also admitted that the company’s total debts amount to 17 billion yuan ($2.44 billion) of which 10 billion yuan ($1.44 billion) is owed to banks, 5 billion yuan ($720 million)  to upstream suppliers and about 2 billion yuan ($288 million) to ad agencies.

Liu still denied in the interview that Gionee’s troubles were due to his gambling and attributed this to a loss streak beginning of 2013 and over extending itself to spending $1.4 billion in marketing and investments. According to him, the company was losing 100 million yuan ($14.4 million) a month between 2013 and 2015 and less than 200 million yuan ($28.8 million) in the past two years.

Gionee ended up cutting its factory workforce by half and has about 6 percent market share in a country where it is dominated by Huawei, Oppo, Vivo and Xiaomi.