Business

Gome Hires Ernst & Young For Financial Audit In China

Hoping to bolster investor and supplier confidence, Chinese electronics retail giant Gome has hired the Ernst & Young Hong Kong office as an independent external accounting division to check Gome's financial conditions as of November 30, 2008.

The nes come from local media sources, which report this is another measure taken by Gome to ease the effect of the investigation related to its chairman Huang Guangyu on the company since it appointed Chen Xiao as its acting chairman on November 27, 2008. Huang has been accused by Chinese authorities of various "economic crimes" related to sales of securities in his brother's business.

Gome has also invited Ernst & Young Consulting to evaluate the relevant transaction records as well as the internal control system and the risk management system of Gome. The auditing and evaluation results will be published at a "proper time", according to the company.

Gome previously said that the company was running fine under the leadership of its new acting chairman Chen and the company's business, operation and relationship with suppliers were not affected by the investigation related to Huang. The company has established a special action committee to monitor and evaluate the influence of the investigation on its financial conditions and management and to raise suggestions to Gome's board of directors about investor relations and actions related to the investigation.

Former CFO of Gome Zhou Yafei, who is also involved in the investigation, was suspended on December 9, 2008, replacing by Fang Wei as acting CFO. In addition, Jiao Weimin, former general manager of the Chinese appliances maker Little Swan, recently joined Gome as director for Gome's lifestyle appliances.

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