Maker of China’s domestic desktop OS goes dark, leaves employees without pay

The maker of China’s state-backed domestic desktop operating system has terminated all of its employees’ contracts, liquidated its assets, and shut its doors, according to Techweb.

Red Flag Linux, as its called, should not be confused with China’s domestic mobile operating system, often referred to as COS (China operating system).

Red Flag started experiencing problems paying its employees back in April 2013. The situation deteriorated until the company couldn’t even pay for its building’s water and electricity. Many employee’s have still not received their wages – a total of RMB 15 million ($2.5 million). They are now targeting Red Flag’s largest shareholder, the Institute of Software – Chinese Academy of Sciences. Allegations are flying over Red Flag’s mismanagement and possible corruption.

Red Flag Linux was meant to compete and possibly replace Windows in China’s domestic market. The Windows lookalike launched in 2000 but never really caught on outside of a few government bureaus. More than half the active PCs in the country still run on Windows XP. Microsoft has announced it will officially end support for the 12-year-old operating system this April. That means, aside from compromising household PCs, many government computers and public ATMs will be left at the mercy of future hackers.

The Chinese government has already stated its discontent with Windows 8, which comes preinstalled on almost all new PCs. It says an upgrade to Windows 8 would cause a substantial increase in costs both for the OS and relevant software. Windows 8 accounts for less than three percent of the Chinese market.

(Editing by Terence Lee)