Yu Shumin, president and chief executive officer of Hisense Group, a manufacturer of electric home appliances, has become the chairman of its former market rival Kelon. Whether Kelon will be rejuvenated in 2006 will be yet another test for 54-year-old Yu, who is known for her ability to rule with an iron hand.

Despite corporate scandals, dubious dealings, plunging sales and the arrest of its former chairman Gu Chujun and four other executives, a number of investors lined up to take control of crisis-ridden Kelon. This is probably due to the fact that Kelon fell into dire straits less because of its product line or marketing skills but more because of its controversial former chairman.

Hisense finally won out in September 2005 when Hisense Group's air-conditioner arm agreed to take over Guangdong Greencool Enterprise Development Co Ltd's 26.43 percent stake in Kelon for 900 million yuan (US$111 million). On completion of the deal, Hisense will become the largest shareholder in Kelon.

The huge tasks lying ahead include resumption of production, new orders, regaining confidence from financial institutions, and renewed support from distributors. This will not be easy given the fact that Kelon reported a loss of 1.3 billion yuan (US$161 million) during the first three quarters of 2005.

Although nothing short of a drastic reshuffle of Kelon's previous structure will be imperative, another challenge confronting Yu will be her skills in bridging the differences in the modes of management between Hisense, a State-owned enterprise, and Kelon, a private company whose later development was heavily influenced by Gu.

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