China’s biggest appliance retailer is suing its founder and former chairman for damages after he was jailed for bribery and other crimes.
Gome Electrical Appliances Holdings Ltd (國美電器) started legal proceedings on Thursday against Huang Guangyu (黃光裕) 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 have amassed a US$6.3 billion fortune.
In May, he was sentenced by a Beijing court to 14 years in prison for insider trading, bribery and other crimes.
“The arrest and later conviction of Mr Wong for various economic crimes caused a great deal of uncertainty for the company,” the statement said.
Gome continues to be affected, particularly in its ability to raise fresh capital, it said, without specifying the amount of damages being sought.
The claim for damages centers on a buyback by Gome of its own shares that Huang allegedly planned and a 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 HK$1.6 billion (US$207 million).
Huang’s wife, Du Juan (杜鵑), is also under investigation and Hong Kong has frozen their assets.
Huang was detained by Chinese authorities in November 2008 and resigned as Gome’s chairman the following year. He was charged with paying 4.6 million yuan (US$675,000) in bribes to five officials and insider trading of 1.4 billion yuan in Gome shares, Chinese state media said.
Earlier reports said he was accused of paying bribes to win regulatory approval for Gome’s stock market listing in Hong Kong.
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