LeEco Crisis Deepens as Sun Hongbin Quits as Leshi Chairman – Variety – Sharing Variety Magazine

[ad_1]

Chinese property tycoon Sun Hongbin has resigned as chairman of Leshi Internet Information & Technology. The company is part of the embattled LeEco phones to cars group, that also includes streaming video and Hollywood investor LeVision.

Sun’s departure was signaled in a regulatory filing on Wednesday. It also announced the appointment of Liu Shuqing as interim chairman.

Sun’s exit, after just eight months, is a further signal that Sun and the Sunac China group he heads have given up on an attempt to rescue the company. Sunac China was also the buyer of large parts of Dalian Wanda’s leisure and theme park assets in China.

Sunac injected $2.2 billion into Leshi in January last year and for months insisted that the company should not be allowed to fail. In November, Sun loaned a further $270 million, but this year he said he would not provide any more.

In October 2016, LeEco confirmed that the group had run into debt problems as a result of frenetic expansion efforts and too little focus on profitability. Since then it has halted some deals and sought new finance. But it has been undermined by the exit of several executives and deepening losses. LeEco founder, Jia Yueting has defied a call by regulators for him to return to China. He is believed to be in California overseeing the group’s electric car-making efforts.

Leshi shares were suspended from being traded for nine months, until January this year. In February, Leshi revealed losses of $1.84 billion (RMB11.6 billion), where a year earlier it had achieved net profits of $87 million (RMB555 million).

Earlier this week an application to wind up another LeEco offshoot, LeSports HK, was made to the High Court in Hong Kong. Sports rights owners MP & Silva and Media partners had been attempting to get payment for soccer and basketball rights licensed to LeSports HK.

[ad_2]

Source link