Gome tycoon faces wave of lawsuits

Gome founder Huang Guangyu is facing the first of a probable wave of investor lawsuits following his arrest and conviction for insider trading, the South China Morning Post reported. The Beijing No. 2 intermediate court will hold a hearing on September 6 for an investor, identified only as Li, who claims to have suffered a loss of about RMB400,000 due to Huang’s mismanagement. The claimant’s lawyer, Zhang Yuanzhong, said Li is the first investor to have a court hearing confirmed but that he was assisting dozens of other investors who are planning to sue Huang. Investors are also considering a class action suit, said Zhang. Huang was sentenced to 14 years in prison and fined RMB600 million, in addition to the seizure of RMB200 million of his personal assets, following a conviction for insider trading, illegal business operations and bribery in May 2010.