Revenue at Gome Electrical Appliances last year fell 7 per cent to 42.7 billion yuan (HK$48.5 billion) after it closed down 189 underperforming stores across the mainland, but net profit rose by 34.4 per cent to 1.41 billion yuan in 2009 from 1.05 billion yuan in the previous year. Gome said it would open about 100 stores on the mainland this year, particularly in second- and third-tier cities, but it would also close 20 stores. The company said its business suffered in the first half of 2009 as a result of liquidity pressure and the arrest of its founder Wong Kwong-yu, who was charged in February with insider trading, bribery and unspecified business crimes after 15 months in police custody. It said that in the first half of 2009, revenue dropped by 17.7 per cent and operating profit fell by 47.2 per cent compared with the same period in 2008. Gome raised a total of 5.31 billion yuan last year through two issues of convertible bonds worth a total of 3.95 billion yuan and an equity offering of 1.36 billion yuan. As of December 31, Gome had 6.029 billion yuan in cash. After announcing the company results, Gome chairman Chen Xiao was asked about his predecessor's arrest. He said: 'It's very difficult for me to say anything at this point. He [Wong] was a former colleague, a friend and competitor to me. I can't really give you an update and we don't know any more than the general public about the case. Whatever the outcome, it will have little effect on Gome.' To improve corporate governance, in August Gome brought three executives onto the board from a major investor, private equity firm Bain Capital. Apart from improving economic conditions, Gome said Beijing's stimulus policies, which offer subsidies to residents in rural areas to buy or replace home appliances, helped boost sales and operating profit in the second half of 2009 by 5.7 per cent and 53.6 per cent, respectively. Gome will not distribute dividends to shareholders.