Cellon case raises policy issue in Jiangxi: expert
The government in Gongqingcheng, East China’s Jiangxi Province, said Tuesday that Cellon Communications Technology Co, a local communications services provider that has been in the media spotlight, has not been in operation since October 2013.
The response came after online media outlets raised questions over the company’s “sudden demise” and the arrest of its founder.
According to an earlier report by TMTPost, a Chinese technology website, Dai Xiaoquan, Cellon’s founder, was arrested on charges of tax evasion involving 3.39 million yuan ($51 million).
TMTPost said that the local government had blocked further loans to the company because of its cash flow problems.
The publicity department of Gongqingcheng said on its Weibo account on Tuesday that in early 2013, Cellon’s production and management ran into problems because of the company’s deteriorating financial situation. The post said that the company’s operations officially ended in October 2013.
The Weibo post said that Cellon still owes banks and businesses in East China’s Jiangxi Province 736 million yuan.
To resolve the company’s financial woes, the local government in Jiangxi Province provided 90 million yuan in bank loans, the Weibo post continued.
The online controversy has drawn investor concern and comment.
Bo Kaijun, an independent investor, reposted the TMT article and said it reflected the investment environment in Jiangxi Province in 2012.
Li Shicai, dean of the Department of Finance in the School of Finance with Jiangxi Normal University, told the Global Times on Tuesday that the Jiangxi provincial government has stepped up efforts to optimize the investment climate in the province.
“Furthermore, it will be great if local governments can pay more attention to policy continuity and consistency,” Li pointed. “Offering policy support will help improve the investment environment and give more enterprises access to Jiangxi Province.”
Being a pioneer in mastering core technologies, Cellon was a research and development company active in the mobile phone sector. It had a low public profile because it served business clients such as Motorola, Huawei and Xiaomi rather than consumers.