Gome chairman departure eases tension
Chen Xiao, the chairman of Chinese electronics retailer Gome, has announced his resignation, paving the way for further reconciliation between the company and its largest shareholder and founder Huang Guangyu. Huang, who is serving a 14-year jail sentence for insider trading and bribery, had been fighting a battle from his jail cell with Gome’s board and US investor Bain Capital for control of the company.
The dispute between the two sides broke out into the open last September when Huang called a special meeting in a failed bid to oust Chen as chairman of Gome, in what has been called China’s first proxy fight. Since then the two side sides have worked to resolve their dispute, with two of Huang’s representatives, including his sister, joining Gome’s board last December.
The announcement on Wednesday that Chen would depart ‘for family reasons’ should move the process of reconciliation along further, according to sources quoted in the Financial Times. ‘Chen was very capable but he was a polarizing figure who burnt many bridges,’ one board member tells the newspaper. ‘Now that one of the two warring parties has left, there is less probability of an escalation.’ Gome has brought in Zhang Dazhong, who once founded his own retail chain, as the company’s new chairman.