Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Gome Sues Billionaire Founder Huang, Shares Tumble

Gome Sues Billionaire Founder Huang Guangyu
Huang, Gome’s largest shareholder, was in May sentenced by a Beijing court to 14 years in prison after being found guilty of bribery and insider trading. Photographer: Timothy O'Rourke/Bloomberg

Gome Electrical Appliances Holdings Ltd. sued its founder Huang Guangyu, once China’s richest man, over share repurchases in 2008 and breach of trust. The company’s shares dropped the most in almost two years.

China’s second-biggest electronics retailer by value filed a complaint in the High Court of Hong Kong against Huang, 41, claiming damages for a breach of fiduciary duty and profits owed to the company in connection with Gome’s buying back shares in 2008. It also said Huang’s arrest and conviction for bribery and insider trading in China caused “a great deal of uncertainty” and hurt the company’s ability to access capital.

Gome said that after it decided to sue, it received a letter from Huang’s company, Shinning Crown, demanding a special general meeting to cancel a shareholder mandate to issue new shares and to oust Chairman Chen Xiao, among other requests. Hong Kong’s Securities and Futures Commission has said it’s investigating Huang for allegedly organizing a share repurchase to help repay a personal loan.

“I don’t see any solution to this in the short term,” said Selina Sia, Hong Kong-based regional head of consumer research at Mirae Asset Securities Co. “It would have a negative impact on the company’s operations.”

Bribery, Insider Trading

Gome plunged 12 percent to HK$2.40 at the 4 p.m. close of trading in Hong Kong. The stock has dropped 15 percent this year, compared with a 1 percent decline for the benchmark Hang Seng Index.

Huang, Gome’s largest shareholder, was in May sentenced by a Beijing court to 14 years in prison after being convicted of bribery, insider trading and illegal operations. The billionaire had built Gome into China’s biggest appliance chain and amassed a fortune estimated at $6.3 billion in 2008, and is the highest-profile businessman snared by a government crackdown on corruption.

Bain Capital LLC last year bought 1.59 billion yuan ($235 million) of convertible bonds, and has said it plans to convert debt it holds into stock to gain as much as 10.8 percent of Gome.

Two unidentified shareholders with a 31.6 percent stake in the company voted against three Bain-nominated directors at an annual shareholders meeting on May 11. The three were reappointed by the company to avoid a penalty payment to Bain.

Asset Freeze

Hong Kong’s High Court last year froze about HK$1.66 billion ($214 million) of assets held by Huang, his wife Lisa Du Juan, and two of his companies. Huang still owns 34 percent of Gome, according to data compiled by Bloomberg.

Repeated calls to Du Juan have been unanswered since yesterday.

Huang, also known as Wong Kwong Yu, and his wife were placed under investigation by Hong Kong’s Securities and Futures Commission for allegedly having Gome buy back shares in January and February of 2008 to help them repay a HK$2.4 billion personal loan, SFC spokesman Jonathan Li said in April.

The son of a peasant, Huang dropped out of school at 16 and traveled to Beijing from Guangdong Province with his brother, Huang Junqin. They carried a bag of radios, batteries and other electronics devices from factories to sell in the nation’s capital.

Huang resigned as Gome’s chairman in January 2009.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.