Corporate reinvention can be as simple as a new name, a new logo, or a new lick of paint at headquarters. Rebirth after a scandal is rarely as straightforward. Tuesday's 70 per cent surge in the shares of Gome, China's top household appliance retailer, suggests that investors are prepared to forgive and forget. But this will be a long haul back for Gome.

In November the Hong Kong-listed company was on its knees. Chairman Huang Guangyu was held by police on suspicion of unspecified skulduggery. The group's shares, down more than three-quarters over the year, were suspended as it scrambled to assure suppliers and lenders it was a going concern. Foremost among them were the holders of a Rmb4.7bn (US$700m) convertible bond maturing in 2014, who could force Gome to buy the whole thing back in May 2010.

After Gome's sale of new convertibles to Bain Capital and a fully-underwritten rights issue, Gome should move to a net cash position – making that nightmare put scenario less likely. But the whiff of scandal won't be wafted away easily. Mr Huang's ghost still stalks the aisles – not least through his majority shareholding, and his still-valid personal undertaking to transfer stores from the unlisted retail arm (which he wholly owns) into the listco by 2011.