By Sijia Jiang
HONG KONG (Reuters) – Leshi Internet Information & Technology <300104.SZ>, embattled Chinese tech group LeEco’s main listed entity, said Sun Hongbin from investor Sunac China <1918.HK> would take over as chairman from founder Jia Yueting.
A frenetic pace of growth over 13 years, from a Netflix-like video website to a business empire spanning consumer electronics to cars, has left a gaping hole in LeEco’s finances. Jia, who has described the cash crunch as “far worse than expected”, stepped down from all posts at Leshi earlier this month to focus on LeEco’s electric car business and repay debts.
Sun’s appointment to Leshi board chairmanship means he now controls what are widely considered to be LeEco’s healthier businesses, while Jia focuses on an expensive ambition to rival Elon Musk’s Tesla Motors <TSLA.O> in making electric vehicles via U.S. subsidiary Faraday Future.
Sun is the chairman of property developer Sunac, which invested 15 billion yuan(1.70 billion pounds) in LeEco earlier this year, including taking an 8.61 percent stake in Leshi for 6.04 billion yuan.
Sunac’s investment in LeEco also included a 33.5 percent stake in smart TV manufacturer Leshi Zhixin and a 15 percent stake in LeEco’s film production company, Le Vision Picutres.
Leshi said earlier this month that it expected to log a net loss between 636.7 million yuan ($94 million) and 641.7 million yuan for the first half of this year.
In its statement to the Shenzen stock exchange on Friday, Leshi said CEO Liang Jun had been named the company’s legal representative.
(Reporting by Sijia Jiang; Editing by Himani Sarkar)
By Sijia Jiang