Companies

Gome sues ex-chairman for allegedly damaging reputation

(Agencies)
Updated: 2011-06-22 15:30

Gome Electrical Appliances Holding Ltd said it filed a lawsuit against its former chairman, Chen Xiao, for allegedly breaching an earlier agreement with the company and damaging its reputation and operations.

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China's second-largest home grown electronic appliance distributor, in which Bain Capital has a stake, said in a statement late on Tuesday Chen had breached an agreement with the firm by providing false information to a financial newspaper reporter.

The legal action was aimed at preventing "irreparable damage to the company's reputation" and protecting shareholders' interests and had been accepted by the Beijing Second Intermediate People's Court, it said.

Gome, founded by billionaire Huang Guangyu, replaced Chen Xiao, whom Huang has been trying to remove since September because of a dispute over the management of the company. Chen was succeeded by the founder of Beijing Dazhong Electrical Appliances Co Ltd, Zhang Dazhong, who took over as chairman and non-executive director.