Owner of Chinese Apple reseller allegedly flees to France with 100 million yuan
PUBLISHED : Tuesday, 23 December, 2014, 2:54pm
UPDATED : Tuesday, 23 December, 2014, 2:54pm
Stephen Chen [email protected]
Apple said the owner of a Chinese shop reselling its products, who allegedly fled to France with more than 100 million yuan, was not an authorised distributor. Photo: Bloomberg
The owner of a large Chinese company reselling Apple products in Beijing has allegedly fled to France with more than 100 million yuan in borrowed funds, the Economic Information, a newspaper affiliated with the official Xinhua news agency, reported.
The case has exposed serious problems in Apple’s distribution network on the mainland, but Apple has denied it was directly involved in the incident.
Apple said in a statement to the newspaper that Dong Wei, owner of Beijing Guangda Century Science and Technology Ltd, had not been on its list of authorised distributors.
Dong has allegedly escaped to France with his family and taken funds in the form of loans from state-owned banks and pre-paid fees from lower-level distributors.
Police in Beijing’s Haidian district confirmed they were investigating the case and trying to locate Dong, the report said.
Dong’s company was a major Apple distributor in Beijing and supplied its latest products to more than a dozen smaller distributors in Beijing and Hebei province.
The government newspaper's report accused Apple of using an unfair business model in China.
The Economic Information claimed smaller distributors needed to pay large down payments – sometimes totalling millions of yuan – to bigger distributors to obtain the newest products, such as the iPhone 6 series.
State-owned banks were also happy to lend lots of money to the large distributor, even though they did not receive any tangible forms of guarantee, the report said.
The banks believed that they would be sure to get their money back, along with a good profit, because Apple products sold well.
The biggest victims in this alleged incident were Apple retailers in Hebei, because their cash flow had been severely affected since the disappearance of Dong, the newspaper reported.
In response to the report, Apple told the Economic Information it could not find Guangda among its distributors in the China region. But it did not know whether the company had signed a redistribution contract, which was permitted, with one of its authorised distributors.
Guangda appears to be a mysterious company; a search on the Chinese internet by a South China Morning Post reporter revealed no information about it.
The Post has sent questions to Apple – including the claim that it used an unfair business model in China. At the time of writing, Apple was unavailable for comment.
