Chairman of China Appliance Giant GOME Resigns

March 9, 2011
The company had been embroiled in a power struggle between its board members and founder Huang Guangyu who was jailed in May last year for 14 years on bribery and insider-trading charges.

Electrical appliance giant GOME said chairman Chen Xiao had resigned with effect March 10, five months after he survived a bid to oust him in a bitter feud with the firm's jailed founder.

The company had been embroiled in a power struggle between its board members and founder Huang Guangyu -- once China's richest man -- who was jailed in May last year for 14 years on bribery and insider-trading charges.

GOME said that Zhang Dazhong, founder of appliances retail chain Beijing Dazhong Electrical Appliances Co. Ltd., would succeed Chen, who was resigning "for family reasons."

Zhang sold his firm to GOME in December 2007 for 3.6 billion yuan (US$550 million).

Since his jailing Huang had waged a high-profile war from his cell against company executives, calling for his allies to be installed on GOME's board and its chairman to be sacked -- but both proposals were rejected by shareholders in September.

A sign of a possible resolution to the row came two months later when Hong Kong-listed GOME Electrical Appliances announced it had signed a memorandum of understanding with Huang's Shinning Crown Holdings to appoint two non-executive directors picked by Shinning Crown to the board.

GOME said that Zhang was joining the board as a non-executive director and also named accountant Conway Lee as an independent non-executive director.

Huang's imprisonment marked a spectacular fall from grace in a case that also ensnared several top Chinese police officials. He has stepped down from the board but remains the company's single biggest shareholder.

Beijing's High Court freed Huang's wife, Du Juan, on parole in August after commuting her three-year prison term for insider trading, but upheld his sentence. Huang was also fined 800 million yuan (US$120 million).

Copyright Agence France-Presse, 2011

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