Huang Guangyu: Gome Founder's Fall from Grace

Abstract

The case discusses the rise and fall of Huang Guangyu, one of the richest persons in China. In 1987, Guangyu, along with his brother, founded Gome, an electronics retailer. The company expanded rapidly, coinciding with the economic boom in the country. It was listed on the Hong Kong Stock Exchange in 2004 and Guangyu featured on the list of the richest people in China. However, from 2006, Chinese authorities started questioning the activities of Guangyu and his brother. In 2008, Guangyu was arrested and prosecuted for insider trading, bribery, and illegal business dealings. In 2010, he was sentenced to 14 years in prison.....

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Issues

The case is structured to achieve the following teaching objectives:

• Examine the reasons for the initial success of Gome
  
• Understand the business environment in China that fueled the growth of the company
  
• Critically evaluate the factors that led to the fall of Guangyu
  
• Evaluate the role played by the government in the success / failure of a business entity
  

Keywords

Gome, Huang Guangyu, Hurun China Rich List, bribery, backdoor listing, China Paradise Electronics Retail, Dazhong Electrical Appliances, Securities Regulatory Commission, Central Commission for Discipline Inspection, Yongle, Shandong Jintai Group, regulatory environment, Sanlian Commercial Co, Beijing Centergate Technologies tycoon,Southern China,Liu Shanying,Shantou,Guangdong,Gome grew,price butcher

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