Liu Lirong, founder and chairman of Gionee, one of China’s earliest phone manufacturers, has been added to the country’s black list of social credit as of October 26.
According to a court in Shenzhen, Liu must pay more than RMB 200 million ($28.8 million) in debt before he can be removed from the list.
On November 24, Liu acknowledged (in Chinese) that he had used corporate funds for gambling, losing millions of dollars.
Chinese news outlet Jiemian (in Chinese) alleged that Liu lost over RMB 10 billion in gambling. Liu has denied these allegations.
“In the 16 years since I established Gionee, I have always been the absolute authority in the company. My only income comes from Gionee, and it’s inevitable that sometimes boundaries between corporate assets and personal money could be blurred,” Liu said in an interview (in Chinese), adding that detailed figures would be released soon after Gionee completes bankruptcy procedures in December.
In the same interview, Liu also said that between 2013 to the end of 2017, Gionee lost around RMB 8 billion in total.
As a privately held company, Gionee’s current debt status is still unclear. According to some suppliers, who urged Gionee to pay pending fees as soon as possible, the company owes more than RMB 5 billion.
Liu didn’t specify the company’s total debt publicly, but attributed Gionee’s failure as a result of fierce market competition and problems with supplier relationships. He denied in the same interview that his gambling had a direct, significant impact on the company’s finances.
Liu added that Gionee’s average monthly loss was more than RMB 100 million throughout the period 2013 to 2015. In 2016 and 2017, its average monthly loss doubled to RMB 200 million.