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Chinese smartphone maker Gionee fails to pay debts, goes officially bankrupt

Gionee now owes a total of $2.9 billion approximately to 648 creditors. Earlier, Gionee chairman Liu Lirong reportedly "lost over $ 1.4 billion" while gambling at a casino.

twitter-logo BusinessToday.In        Last Updated: December 20, 2018  | 16:28 IST
Chinese smartphone maker Gionee fails to pay debts, goes officially bankrupt

Chinese smartphone manufacturer Gionee's bankruptcy application has been accepted by the Chinese court in Shenzhen. Once a top smartphone manufacturer, Gionee has reportedly failed to pay its debt from various suppliers. The problem was compounded in November this year when Gionee chairman Liu Lirong reportedly "lost over $ 1.4 billion" while gambling at a casino in Saipan.

Lirong did admit to the gambling problem but maintained that he did not use Gionee's money to gamble. He also admitted losing only around $144 million. Gionee owes $ 2.9 billion to 648 creditors as of August 2018.  The company was losing $ 14.4 million a month between 2013 and 2015 and these losses further doubled in the last two years.

However, Liu Lirong is still hopeful and has stated that he sees a turnaround in the company's fortune in 3-5 years. Meanwhile, as of last week, consultants were hired by Gionee to streamline and restructure the company and create a plan that would allow it to emerge out of the current mess.

Gionee was founded in 2002 in Shenzhen, Guagdong. It had a decent market share in China and had presence in India, Taiwan, Bangladesh, Nigeria, Vietnam, Myanmar, Nepal, Thailand, the Philippines and Algeria.

Gionee was a prominent player in the Indian market and challenged established brands like Nokia and Samsung. It was one of the initial phone brands that started offering selfie centric phones and by 2017, it had captured 4.6% of the selfie smartphone market, according to the Counterpoint Research. Gionee had made a comeback in the Indian market in April 2018 with the launch of the Gionee F205 and Gionee S11 Lite handsets.

Gionee has lost its erstwhile sheen to other Chinese brands like Xiaomi, Oppo & Vivo. It remains to be seen whether Lirong and his company could salvage some pride and make it through the crisis.

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