A Gome store in Yichang, Central China's Hubei Province Photos: IC

Huang Guangyu, founder and former chairman of Gome Photos: IC

Shares of Hong Kong-listed Gome Electrical Appliances Holding fell 3.93 percent on Monday after the Xinhua News Agency refuted a rumor that Huang Guangyu, founder and former chairman of Gome, would be released from prison ahead of schedule.

Huang was sentenced in 2010 to 14 years for bribery, insider trading and illegal business dealings.

Rumors that Huang will be released as early as this year have been circulated on the Internet since last week.

Huang was once ranked by Forbes as China's richest man in 2006 with personal wealth of 18.09 billion yuan ($2.92 billion).

Huang is still serving his sentence in prison now and the court did not receive any application for a commutation of sentence or parole about Huang, Xinhua reported late Sunday.

Li Hong, director of Gome's investor relations department, told the Global Times on Monday that "the company has not received any official notice from the court or prison saying that Huang will be released from prison soon."

"The schedule for Huang's release is still in accordance with the judgment now," Li said but noted that there is a bit of uncertainty about the final date since there may be a commutation or parole in the future.

Xinhua's refutation of the rumor came after several firms linked to Huang saw their stocks soar last week. Beijing Centergate Technologies (Holding) Co, whose largest shareholder is Huang, increased by the daily limit of 10 percent Wednesday.

Another listed company, Shandong Jintai Group Co, controlled by Huang Guangyu's brother Huang Junqin, also saw its shares jump by 10 percent on May 13.

Hong Kong-listed company Gome witnessed a 5.53 percent stock price increase on May 13, after a 17.35 percent jump on May 11.

Following Xinhua's report, these companies experienced a collective fall on the stock market on Monday. Centergate's shares fell by 4.69 percent while Shandong Jintai's shares dropped by 7.21 percent.

"The wild swings of Huang-related stocks show that investors place significant importance on the founder and the firm's core management team," You Tianyu, a research director at a Chinese private equity fund, told the Global Times on Monday.

Zhuo Saijun, an analyst at consultancy Analysys International, told the Global Times on Monday that Gome's over-reliance on Huang Guangyu on decision making puts both investors and Gome in danger.

Zhuo also pointed out that Chinese stock investors are inexperienced so they are easily influenced by rumors.

As for Gome's operations, some analysts questioned whether Gome can regain its peak form even if Huang Guangyu is released soon since Gome is lagging behind significantly in the e-commerce race.

Data from the National Bureau of Statistics showed that online trading accounted for 10.7 percent of China's total retail sales in 2014.

E-commerce company JD.com Inc (JD) had a gross merchandise volume (GMV) of 260 billion yuan for its online business in 2014, up 107 percent year-on-year. Gome's main rival Suning achieved GMV of 25 billion yuan that year, three times Gome's GMV. 

By market share, Gome ranked fifth in China's e-commerce industry in 2014 with a share of only 1.7 percent, far behind Alibaba's tmall.com which had a 61.4 percent market share, according to data consultancy iResearch released in February 2015.

Gome was also behind JD's 18.6 percent and suning.com's 2.9 percent.

"Compared with Suning, Gome is more conservative in developing e-commerce," You said, "but considering the fierce competition, it is too soon to say that e-commerce is Gome's only good choice."

But Zhuo is optimistic about Gome's e-commerce development, and he said the key task for Gome is to decide which sector to emphasize when they promote online business.

"Gome has been promoting its online business in PC and mobile terminals since last year," Zhuo said. 

Media reports said that Gome purchased online home appliances shopping platform coo8.com for 60 million yuan in 2012.