* Institutions with 42 pct of GOME back management -spokesman
* Shares underperforming, down 22 percent this year (Add details)
HONG KONG, Sept 10 (Reuters) - A large portion of institutional investors support the existing management of China's GOME and will back top executives ahead of a key shareholder meeting, the company said on Friday, as the company tries to wrest control from its jailed founder.
GOME Electrical Appliances Holding Ltd has called a special general meeting for Sept. 28 to discuss measures proposed by founder, ex-chairman and largest shareholder Wong Kwong Yu, regarding the removal of the current chairman and other board members. Wong is known on the mainland as Huang Guangyu.
The meeting will also vote on Huang's measure to cancel a mandate empowering the board of directors to issue additional shares representing up to 20 percent of the company.
"We have spoken with institutions representing 42 percent of GOME shares and we have yet to talk with a single fund manager who will be supporting Mr. Huang's nominees to replace our existing board directors," a GOME spokesman said.
The spokesman declined to be identified because of the sensitivity of the matter.
Bain Capital, which agreed to invest in the company earlier this year, has said it will exercise its right to convert its bond holding into about 10 percent of GOME shares before the Sept. 28 meeting. The bond conversion would dilute Huang's interest in the company to 32.5 percent from 36 percent.
Among the largest institutional shareholders in GOME are JF Asset Management, with 4.79 percent, and Fidelity with 3.61 percent, according to regulatory documents. Other institutions involved are Morgan Stanley and BlackRock Inc.
GOME's management needs a simple majority of more than 50 percent of votes in their favor for the eight measures on the ballot. Three of the measures are to re-elect Bain Capital executives to the board -- executives Huang briefly overthrew before the board of directors stepped in.
There are also four measures pertaining to Huang-influenced removals and appointments of other directors, and one to cancel the equity-raising mandate that will dilute the founder's shareholding.
HUANG ALSO REACHING OUT TO SHAREHOLDERS
With the management at odds with the top shareholder, both sides are reaching out to investors for support at the special meeting.
Lobbying institutions was also part of Huang's agenda, said a representative from his shareholding group, Shinning Crown.
Huang has sought to terminate several agreements with the Chinese home appliance retailer if the proposed resolutions by his wholly-owned Shinning Crown are voted down in the upcoming special general meeting.
Huang, once China's richest man, was sentenced to 14 years in jail this year by a Chinese court for bribery and insider trading. He has appealed his sentence.
Zou Xiao Chun, proposed by Huang for appointment as a director, said he and his team had been in touch with institutions since Aug. 4 to explain the reason for the meeting, and had gained their understanding and support, according to a report by Chinese newspaper the 21st Century Business Herald.
Zou said he would try to meet as many institutions as possible, including Morgan Stanley and JP Morgan, before the shareholder meeting, and senior management of Bain Capital to discuss corporate governance and the future development of GOME.
GOME has taken legal action against Huang seeking compensation for alleged breaches of fiduciary duties, while Huang is seeking to raise his stake to increase his voting power and demand a number of management and strategy changes. Huang has proposed throwing three Bain executives off the board, a measure that briefly succeeded until the board re-appointed them.
Competing with Suning Appliance Co Ltd, GOME aims to open 700 new stores and generate as much as HK$77 billion ($9.9 billion) additional revenue in a five year business plan.
Hong Kong-listed shares of GOME have fallen 22 percent so far this year, against a 3.3 percent fall in the Hang Seng Index. By midday Friday, GOME was down 1.35 percent compared with a 0.04 percent fall in the HSI. (US$1=HK$7.77) (Reporting by Donny Kwok and Michelle Chen; Editing by Chris Lewis)