Leshi loss like ‘chopping one’s head off’
Print Edition
SUNAC China has written off 97 percent of its investment in Leshi Internet Information and Technology amounting to a total loss of 16.6 billion yuan (US$2.6 billion), chairman Sun Hongbin said yesterday.
But Sun, who resigned as chairman of Leshi two weeks ago after only eight months in office, still has “positive view about the development prospects of large-screen operations and content in the long run,” despite of the failure of the Leshi investment.
“It’s not a broken-wrist pain but as painful as chopping one’s head off (on investment in Leshi),” Sun said.
Sunac has set aside 16.6 billion yuan for losses related to Leshi, comprising 9.98 billion yuan to write down debt, impaired loans valued at 2.1 billion yuan and 4.48 billion yuan in investment losses, the Tianjin-based company said as it released its 2017 financial results.
Sunac has invested a total of 17.1 billion yuan in Leshi, including 15.4 billion yuan in Leshi and its parent firm LeEco, in January 2017.
Sun decided to quit as chairman, Leshi said in a filing to the Shenzhen stock exchange on March 14. Leshi was not available to comment on Sun’s remarks.
Leshi’s founder Jia Yueting expanded LeEco’s business from online video to smartphone and even electric car as he had hoped to establish China’s Netflix-to-Tesla contender. But LeEco ran into a cash crunch in 2016 and 2017 after expanding too fast. Jia left China to continue developing the electric car business in the United States.
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