(Yicai Global) April 7 -- It is not true that Gome Retail has told employees to take out loans to ease life pressure as the cash-strapped Chinese retailer does not have enough money to pay their salaries, Shanghai Securities News reported today.

Chief Technology Officer Li Yibing has confirmed that the rumor is false, the report said, citing a statement from the Beijing-based firm’s public relations department.

Li is said to have told employees to take out a loan from China Minsheng Bank at an annual interest rate of 3.48 percent as the company cannot meet its payroll, according to a screenshot posted on social media late last month by a person claiming to be a Gome staff member.

Gome will pay the interest on loans to a maximum of CNY30,000 (USD4,362) a month, the equivalent of monthly repayments of CNY87 (USD12), and employees should pay the rest, according to the screenshot. To employees, the low interest rate is more important that the company helping to pay the interest.

Over 100 members of staff marched on the firm’s headquarters in Pengrun Tower in Beijing last December to ask for their salaries, China Newsweek reported earlier. It is not known how much in wages the firm owes.

Gome had racked up CNY6.9 billion (USD1 billion) in overdue loans as of Feb. 3, the firm said on Feb. 28, saying it is negotiating with lenders about refinancing or extending the repayment date.

Editor: Kim Taylor