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July 7, 2017

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LeEco boss pleads for more time

THE founder of China’s debt-laden LeEco resigned as chairman of its main listed unit yesterday, just hours after making a public plea for patience amid a deepening financial crisis at the entertainment, electronics and electric vehicles group.

Leshi Internet Information & Technology Corp Beijing said Jia Yueting will remain controlling shareholder without any role, having resigned as chief executive in May to focus on the electric car business, of which he will now become chairman.

The announcement came after Jia on social media promised to repay debt and reaffirmed LeEco’s electric car commitment.

“Please give LeEco some time, please give LeEco car some time,” Jia wrote in Chinese on his Weibo and WeChat accounts. “We will pay back creditors, suppliers and any other debts.”

The plea came about a month after Jia said a cash crunch at LeEco was “far worse than expected.” He previously said the group, whose businesses include telephones, television sets and cars, expanded too quickly from its video-streaming beginnings 13 years ago.

Jia’s resignation is the latest development in a week of turmoil, with asset managers seeking to pull investment after a Shanghai court granted China Merchant Bank Co Ltd’s request to freeze US$182 million in assets due to late interest payments.

“Given LeEco’s current state, in order to protect fund safety, we have asked our fund manager to pause new investment and will seek to hasten our exit from invested projects,” Noah Holdings Ltd said in on Wednesday.

Hengyu Tianze, known as 1314 fund, also on Wednesday said it had asked to redeem convertible bonds in a LeEco unit several times since March.

Investors were also spooked after it emerged that China’s national enterprise credit information publicity system showed Jia relinquished his role as LeEco’s legal representative last month in favor of another executive, Wu Meng.

“Resigning as chief executive of LeEco’s listed company and many other roles is all aimed at making the FF91 go into production and hit the market as soon as possible,” Jia said yesterday, referring to a luxury car model.


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