China Appliance Chain Gome Sues Jailed Founder

Huang Guangyu, former Chairman of Gome Electronics and China’s richest person who is serving a 14-year prison sentence for bribery and other crimes, is now being sued by his former company. From AP:

Gome Electrical Appliances Holdings Ltd. started legal proceedings on Thursday against Huang Guangyu in the High Court of Hong Kong, the company said in a statement to the Hong Kong Stock Exchange.

Huang, also known as Wong Kwong Yu, built Gome into China’s biggest appliance retailer and was estimated in 2008 to be worth $6.3 billion. In May, he was sentenced by a Beijing court to 14 years in prison for insider trading, bribery and other crimes.

…The claim for damages centers on a buyback by Gome of its own shares that Huang allegedly planned and breach of trust. The Hong Kong’s Securities and Futures Commission is investigating whether Huang diverted money from a Gome share buyback between January and February 2008 to repay a personal loan. Regulators say that caused Gome and its shareholders to lose 1.6 billion Hong Kong dollars ($207 million).

Huang’s wife, Du Juan, is under investigation and Hong Kong has frozen their assets there.

There were new signs that Huang could be trying to retain influence over the board of Gome despite being removed as chairman and put in prison.

August 6, 2010 8:01 PM
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Categories: Economy, Law