Due to poor performance and three-month salary arrears to employees, Gome was surrounded by nearly a hundred employees on the 36th floor of Beijing Pengrun Building, the company's headquarters, on the evening of December 6, demanding that founder Huang Guangyu pay his salary.

(Bloomberg)

[Compilation of Lu Yongshan/Comprehensive Report] Founded by Huang Guangyu, the former richest man in China, Gome Electric Appliances, a household appliance retail giant in China, due to poor performance and arrears of three months' salary for employees, on the evening of December 6, the company headquarters Beijing Pengrun Building 36 The building was besieged by nearly a hundred employees, who demanded Huang Guangyu to pay his salary, and had a physical conflict with his security personnel. Since the office area has been occupied by employees demanding salary, the company headquarters can no longer work normally.

Shares of Gome Electric, which is listed in Hong Kong on Monday, tumbled 7.8 percent to HK$0.15.

More than 20 salary-seeking employee representatives met Wei Qiuli, vice president of Gome Electric Group, and asked for the salary from September to November, as well as half-year bonuses and performance awards.

However, Wei Qiuli said that the company has already informed the employees that they will not be able to pay wages from June to December, and sent a letter of commitment to the employees. Those who are willing to stay will sign, and those who are not willing will not sign. The settlement procedures will be handled in accordance with the labor law. .

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The action of Gome employees to demand wages lasted for 8 hours, and the situation did not ease until the police intervened.

But the problem has not been resolved, and the employees who asked for salary have not dispersed.

The CCP’s official media “China News Weekly” reported on the 9th that currently the 36th floor of Pengrun Building is full of salaried employees. They “spontaneously take over the office space on duty”, and the company’s headquarters can no longer work normally.

According to an employee familiar with the details and close to the senior management, Huang Guangyu did not show up that day, nor did he give any instructions to the senior management. "He just didn't show up that day."

Huang Xiuhong, chairman of Gome Electric, issued a notice to employees at the end of October, stating that the company will only provide social insurance (social insurance) to employees before the end of December, and will not pay wages again. He also asked employees to sign a letter of commitment, asking employees to "understand" In the next six months to one year, the payment of wages may be delayed. Those who are willing to stay in the company will sign, and those who are unwilling will not sign, and the settlement procedures will be handled in accordance with the labor law.

Gome's delay in paying wages has been ranked No. 1 on the Chinese social platform Weibo hot search list as early as November 3, with 400 million views in one day.

Gome was once called the "King of Retail" in China, and Huang Guangyu was also named "China's richest man" several times. Now he has been reduced to a tragic situation where he is besieged by employees because he has several months of salary arrears.

Gome's debt gap is huge.

As of the end of June this year, the company's total assets were 74.471 billion yuan (the same below, 10.68 billion U.S. dollars), total liabilities reached 58.568 billion yuan (8.4 billion U.S. dollars), and the asset-liability ratio was 78.65%. The repayment of loans amounted to 22.902 billion yuan (3.29 billion U.S. dollars), while the company's current cash and equivalents are only 2.409 billion yuan (350 million U.S. dollars), and the company's cash flow in the first half of the year is only 55.35 million yuan (7.94 million U.S. dollars) .

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