Gionee on verge of bankruptcy as CEO gambles away company money in billions

At a time when leading smartphone makers across the globe are busy injecting advanced technology, increasing supply and enhancing customer experience, Gionee is in a one-of-its-kind situation.

Gionee started off well but was then overshadowed rivals including Xiaomi, Oppo and Vivo. (Image: Gionee/ Facebook)

New Delhi: At a time when leading smartphone makers across the globe are busy injecting advanced technology, increasing supply and enhancing customer experience, Gionee is in a one-of-its-kind situation. Once a popular smartphone brand, Gionee is now on the verge of going bankrupt. While the reason behind the Chinese firm going bankrupt is not official yet, but several media reports suggest that gambling habit of its chairman Liu Liron seems to have taken a toll on the company. It is also being said that recently Liron lost over 10 billion yuan ($1.4 billion) on a gambling table in Saipan. However, Liron partially denied the claim in an interview with the Securities Daily, saying that the amount is too big to be true. When asked about how much he lost, the Gionee chief said ‘About 1 billion’ (Though he did not specify whether it was in yuan or US dollars). Reports also suggest that he “borrowed company funds and said the amount of money he took will be made public when the company starts bankruptcy reorganisation next month. Gionee started off well but was then overshadowed by its immediate rivals including Xiaomi, Oppo and Vivo. The company’s popularity in China and even overseas market including India has toppled by other smartphone makers. Liron, however, claimed that his gambling loss is not the only reason behind the downfall of the company and said that the company has been on the losing end since 2013. The average monthly losses of Gionee ware around $14 million between 2013 and 2015 and later it rose to $28 million in the past two years. During the start of 2018, Gionee was reportedly planning to invest around Rs 650 crore with an aim to emerge as top 5 smartphone brands in the country. Speaking to news agency PTI, a company official had said, “In 2018, we are looking to be among the top 5 smartphone brands in India. We will increase the marketing budget by 30 per cent compared to the investment made last year.” The company, during the start of this year, aimed to capture 20 per cent share of the overall smartphone market in India with its smartphones in the range of Rs 8,000 to Rs 20,000.