NEW YORK (BLOOMBERG) - Mr Zhang Jindong has stepped down as the chairman of Chinese retail giant Suning.com, after losing control of his firm following a government-led bailout.
The company announced his resignation in a filing with the Shenzhen stock exchange on Monday (July 12), adding that Mr Zhang will be appointed honorary chairman to guide the firm's future growth. Mr Zhang, 58, lost control of Suning when the business sold a 16.96 per cent stake to a state-backed consortium for a US$1.36 billion (S$1.84 billion) bailout last week.
The group of investors, led by the Nanjing state asset-management committee and the Jiangsu provincial government, also includes Alibaba Group Holding and Chinese appliance makers Midea Group and Haier Group, smartphone maker Xiaomi and TCL Technology Group.
Mr Zhang’s resignation and the company’s rescue is the latest chapter in a remarkable rise and fall for a tycoon who was once one of China’s richest individuals with a fortune of more than US$11 billion as recently as 2015. He not only built a vast retail group that gained backers including Alibaba, but also helped lead China’s global soccer ambitions abroad by purchasing a controlling stake of Italian team Inter Milan in 2016.
Mr Zhang, who studied Chinese literature at Nanjing Normal University, founded Suning in 1990 and started out selling air conditioners. He transformed the company into a retail empire with stores in major Chinese cities. In 2015, Alibaba announced a US$4.6 billion investment in a bid to combine its online capabilities with Suning’s bricks-and-mortar expertise.
Suning.com had a market value of about 52 billion yuan (S$10.86 billion) before its trading halt. The retail business was weakened by a slowdown in spending during the pandemic. Concerns about its cash flow intensified in September, when Mr Zhang waived his right to a 20 billion yuan payment from property developer China Evergrande Group.
The stock tumbled last month after a Beijing court froze 3 billion yuan worth of shares held by Mr Zhang - representing 5.8 per cent of Suning.com - and creditors agreed to extend a bond for Suning Appliance Group, which is owned by Mr Zhang and fellow co-founder Bu Yang.
Mr Zhang has a net worth of US$1 billion, according to the Bloomberg Billionaires Index, down from a peak of US$11.5 billion in June 2015.
In Monday’s announcement, the company said Ren Jun, a board member, will perform chairman duties temporarily. Zhang nominated his son, Steven, as a director.