Chinese Handset Manufacturer Closed Down by Local Court

Local media is reporting that the Chinese handset manufacturer, Guangzhou Soutec has had its production lines shut down by a local court following complaints that debts were not being serviced. According to the Xinhua News Agency the problems concerns debts worth some US$2.4 million.

The shutdown was ordered after a bank in Hunan Province appealed to Guangzhou Development District court calling for the closedown of Soutec over the return of the money.

Soutec currently has a license to manufacture both GSM and CDMA handsets, and despite a disparate shareholding, is still a state controlled company, making it more remarkable that a local court would agree to shut the company down. Soutec recently said that its annual production capacity has reached 10 million units.

Guangzhou Development District (GDD) Investment owns 64% of Soutec's stock; the No 7 Research Institute of China Electronic Technology Group has 20%; Guangzhou Jinpeng Group 7%; Guangdong International Trust and Investment Co's electronics company 5%; and Guangzhou Telecom 4%.

GDD Investment is understood to be preparing to bail out the company's debts."

Posted to the site on 29th June 2005