The CEO of a Chinese smartphone maker has denied that his $144 million loss at Imperial Pacific Casino in Saipan has impacted his company, Gionee, which is now on the verge of bankruptcy. Liu Lirong denied initial reports that he had lost RMB 10 billion ($1.44 billion) through his gambling activities, before later confessing that he had however lost “a bit more than RMB 1 billion” ($144m), some of it with company money, over five years of losses at Imperial Pacific.

Use of Company Funds “Inevitable”

Lirong’s initial defense was to question how he could “possibly lose” the reported RMB 10 billion sum, adding that if he had Imperial Pacific International’s shares should have “surged” instead of falling 50%, leading to them fending off bankruptcy rumors themselves earlier this month.

Admitting he had lost around $144 million, he said his five-year losing streak was funded primarily by personal loans, but that “it is inevitable that there will be some public activities, funded by the company” given that Gionee was his only source of income. This seems to have been known, or at least suspected, by Gionee executives earlier this year, as in January a court in the Chinese city of Dongguan ordered his 41% stake in the company to be frozen for two-years.

Difficult Future

Gionee is purported to have debts of around RMB 17 billion (roughly $2.45 billion) and has failed to pay financial creditors, marketing firms, and around 400 suppliers over the course of several months. Once one of the prominent players in the Indian smartphone sector, its market share has declined steeply in the face of competition, although they still hold a 6% market share in China. Whether they can continue to do so in the face of such debts and bad publicity remains to be seen.