Chinese electrical appliance giant GOME has launched a lawsuit against its ex-chairman Chen Xiao over comments he made in an article published in the 21st Century Business Herald, a mainland Chinese publication, on May 10.
GOME claimed the article, in which Chen described the events leading up to his departure from the firm in March, imposed "financial damages to the company's reputation and operations."
"GOME has taken this legal action against Chen for breaching an agreement with GOME to prevent irreparable damage to the company's reputation and protect the company's and all shareholders' interests," the statement said.
GOME, China's second largest electrical appliance chain by revenue and which has about 1,100 retail stores across China, has been embroiled in a power struggle between its board members and founder Huang Guangyu. Huang, once China's richest man, was jailed in May last year for 14 years on bribery and insider-trading charges.
Chen resigned as chairman of GOME in March, citing "family reasons", just months after he survived a bid to oust him in a bitter feud with Huang, who has sought to increase his family's influence in the company.
The ex-chairman told Dow Jones Newswires on June 22 that he has not received any official word of the lawsuit and that he stood by a statement he made in May. Chen however said his comments were part of a private conversation with the reporter, and that he did not agree to the interview with the Chinese magazine. He declined to comment further.
Copyright Agence France-Presse, 2011