Gome Former Chairman, Chen Xiao
Chinese retailer Gome Electrical Appliances Holding Ltd. said on Tuesday that it has filed a lawsuit in a Beijing court against its former chairman, Chen Xiao, alleging that he gave "false and misleading" company information in an earlier interview to a Chinese publication.
Hong Kong-listed Gome said comments made by Mr. Chen in an article published on May 10 by the 21st Century Business Herald imposed "financial damages to the company's reputation and operations." It didn't say what comments were made by Mr. Chen.
In the article, Mr. Chen discussed, among other things, events leading up to his departure from the company's helm in March.
"Gome has taken this legal action against Mr. 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 company said in a statement. It filed the suit in Beijing Second Intermediate People's Court.
Mr. Chen said on Wednesday that he hasn't received any official word of the lawsuit and that he stood by a statement he made in May. He declined to comment further.
Mr. Chen said last month that he didn't agree to an interview with the Chinese magazine and noted his comments were part of a private conversation and were taken out of context.
A call into the 21st Century Business Herald for comment was unanswered.
A representative at the Beijing Second Intermediate People's Court was not immediately available for comment.
Mr. Chen resigned as chairman of Gome in March, marking the end of a long battle between him and the company's jailed founder, Huang Guangyu. Mr. Huang is currently serving a 14-year sentence in China for bribery and other illegal business practices.
Mr. Chen's abrupt resignation, which took effect on March 10, came just five months after a major victory in the fight for control of the company against Mr. Huang, who has sought to increase his family's influence in the company.
Mr. Chen was replaced by Zhang Dazhong, the founder of Beijing Dazhong Electric, a one-time rival retailer that Gome bought in 2007.
Mr. Chen, who sold his China Paradise retail chain to Gome, took the helm of the company in early 2009 after Mr. Huang's incarceration, helping to stabilize operations at the height of the global financial crisis and rebuild brand confidence. During his tenure, he brought in U.S. private equity firm Bain Capital LLC as a strategic investor.