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People's Daily Online>>China Society

Gome sues ex-chairman for breach

By Lu Nengneng (Shanghai Daily)

09:08, January 06, 2012

Gome Home Appliance Co is suing former Chairman Chen Xiao for breaching a confidentiality agreement as their dispute looks set to escalate.

Gome, China's second-largest home appliance retailer, sued Chen for violating the 10 million yuan (US$1.6 million) agreement he signed before he resigned in March, a court in Beijing heard yesterday.

The case centered on a media report published in May which quoted Chen as saying that Gome charged suppliers non-standard fees for its grey income, and he would sell off his shares soon as he saw no investment value in them.

The Hong Kong-listed company responded immediately that it would not tolerate Chen's untruthful and misleading remark that may hurt its business. It had warned it would take the necessary action to protect its interest.

In a statement Chen defended that the quotes were part of a private conversation and taken out of context, which didn't reflect the original meaning or his opinion.

Chen was said to have received 10 million yuan from the company to protect its business secret and interest after he resigned, according to Zou Xiaochun, Gome's executive director, who disclosed the agreement details in court.

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