Huang Guangyu, who used to be a former richest man in China, has been selling a large number of shares at Gome Holdings. His company is facing a possible liquidation by its suppliers.

According to Sohu, Huang was the richest man in mainland China three times, in 2004, 2005 and 2008, on the Hurun Report.

In 2006, he also ranked first in Forbes’s China Rich List.

According to Yicai Global, Huang founded Gome Holdings in 1987, making it a conglomerate of retail, finance, and real estate in China.

In most people’s memory, Gome was a popular home appliance brand. Many people in the past did not know Huang, but they knew Gome. In 2007, Gome had the largest number of stores among Chinese electrical appliance chains.

So even if someone did not go to the store to buy, the big sign of Gome on the street would also remind them of the existence of this behemoth.

But in 2022 Gome became a living villain in the hearts of most people. The company suspended employees’ wages, required workers to write letters of commitment, and quarreled with other home appliance brands. And finally in December, the company faced liquidation for its unpaid debts.

Yicai Global reported that suppliers of Gome Retail, a unit of Gome Holdings, filed for liquidation on unpaid debts.

However, it was not a bankruptcy filing.

Earlier, there was a report that the Case Center of Ten Billion of Industrial Institute alleged that disgruntled Gome suppliers applied for liquidation of the Beijing-based retailer as the firm owes millions of yuan to suppliers.

This center is a legal service provider, working on complex cases. It said the court had initiated a review. 

Gome Holdings responded that its subsidiaries have not received any legal documents or inquiries pertaining to the bankruptcy filing.

Gome said that it would follow legal provisions, and also asked the relevant parties to abide by laws and regulations to solve the problems.

A lawyer appointed by the supplier who filed for the liquidation had sent a letter to Gome. The letter mentioned that if the repayment was not arranged soon, it would file for liquidation according to law.

Gome has recently been having trouble repaying its debts.

In a statement in October, Gome said that this year its net loss is expected to increase 35-55% from last year’s 4.4 billion yuan ($626.4 million).

Gome’s overdue loans tallied about $418.9 million as of September 30. It is discussing with banks and financial institutions to revise the loan terms.

The future of Gome is uncertain. It seems that Huang has no confidence in his company. That can be seen from his cashing out of Gome shares this year.

Statistics show that Huang has cut his shares in Gome 15 times this year.

According to Sohu, his shareholding ratio has dropped from 59.9% at the beginning of this year to 39.2%, a decrease of 20.7%.

And according to Yicai, Huang and his wife have sold a 24% stake in Gome so far this year. Earlier, Huang was jailed for insider trading and graft.

On another point, layoffs, salary suspensions, losses, and overdue debts are also the embodiment of Gome’s poor operation.

From owning nearly 4,000 stores, Gome is now being chased by suppliers. Gome’s plight is easily reminiscent of former giants, such as Nokia. It didn’t do anything wrong, but for some reason, it still lost.

Whether it is the company’s slowly updated business model or the founder, maybe everything about Gome is a little “too old” for today.

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