The jailed founder of Gome Electrical Appliances Holding has threatened to terminate commercial agreements with the company if shareholders reject a motion to sack senior management, in the latest salvo in an intense lobbying campaign by both sides ahead of a special general meeting on September 28.

Huang Guangyu, once ranked as China’s richest man, has a 34 per cent stake in the Hong Kong-listed retailer and is attempting to reassert control, even as he serves a 14-year prison sentence for insider trading and bribery.

Earlier this month, Gome agreed to Mr Huang’s request for a shareholder vote on the removal of Chen Xiao, Gome chairman, and another director. In the contest with its founder, Gome is backed by Bain Capital of the US, which will take a 10 per cent stake in the company and vote against the resolution.

The billionaire’s threat to cancel commercial agreements between his private companies and Gome if shareholders back Mr Chen was revealed yesterday by the company in a statement to the Hong Kong stock exchange.

As is typical of many Chinese family companies, Gome does business with private firms controlled by its founder. These include management training and procurement services, provided by Gome to Mr Huang’s companies.

Gome urged shareholders to back current management at next month’s meeting, arguing that cancellation of the commercial agreements would not have a significant impact on operations. In 2009 the company received Rmb233.5m ($34.3m) – less than 1 per cent of revenues – from such related-party transactions.

“The company regards the delivery of the termination letter as being clearly motivated by Mr Huang’s desire to force shareholders to support the resolutions . . . which are designed to further Mr Huang’s own interests,” Gome said.

Mr Huang, who remains Gome’s largest shareholder, wants to replace Mr Chen and the other director with his sister and an associate. In May, he briefly succeeded in removing three directors from the board including Jonathan Zhu, co-head of Asia for Bain. Gome reappointed the three directors, and has asked shareholders to re-elect them at next month’s special general meeting.

Gome also revealed that Mr Huang had offered to take up as much as 65 per cent of any new share issue, at a 5 per cent premium to the subscription price.

Separately, Chinese media reported that a court denied Mr Huang’s appeal against conviction but ordered the release of his wife, Du Juan, who had earlier received a three and a half year sentence.