Whenever one starts a company, it never dreams of it going bankrupt, but there could be various reasons leading to a company’s end. Usually, companies are backed by very strong reasons for going bankrupt, but in a recent, unfold of activities, a very weird and bizarre reason for going bankrupt has come into light.
Gionee Goes Bankrupt
Chinese mobile phone company, Gionee has officially filed for bankruptcy. Gionee also had a large presence in India and as of now, the company is in debt for $ 3 billion to 648 creditors. A Shenzhen based court has accepted the company’s application for liquidation bankruptcy that was filed against it by Huaxing Bank.
The Gambling Binge
But things aren’t as simple as they seem, It clearly isn’t just a case of a company losing all its money, there is a lot more to it. Reports suggest that Gionee’s founder and chairman Liu Lirong’s betting led to the company losing $1.4 billion, which is nearly half of the entire debt. Some reports suggest an even higher amount. Though Lirong did not initially admit to it, he later accepted borrowing and using company’s money to fund his gambling binge.
The Historical Connect
Well but this isn’t the first time that a founder has taken the gambling route. Way back in 1974, founder and CEO of FedEx, Fredrik W learned that the company had only $5000 left and clearly had no money to fuel the planes for the following Monday. This is when Fredrick thought of trying his luck at a table of blackjack and flew down to Vegas. He definitely had luck on his side and won $32,000 and managed to save his company from sinking. Today FedEx is valued at $35 billion with Fredrick’s personal worth is more than $2 billion. But this winning streak did not seem to support Lirong.
Gionee started losing around $100 million a month during the period of 2013-2015 and these loses doubled over the last 3 years and Lirong’s so-called gambling adventure served as a last nail in the coffin.
