LeEco founder Jia Yueting resigns as CEO of company's main listed unit

Javier Howell
May 23, 2017

As the chairman, he will focus on matters of corporate governance, strategic planning, and core product innovation. To replace Jia as the CEO of Leshi is Liang Jun, a former Lenovo executive who joined the company in 2012. Additionally, the firm's finance chief Yang Lijie will be replaced by the company's China CFO Zhang Wei. It is now considering merging all privately held businesses into its Shenzhen-listed unit Leshi and carving out a separate auto-making entity, Jia told reporters on Sunday.

Liang said the company will strengthen operations in TV sales, as well as enhance its capacity in video content production in the future.

The restructuring comes several months after the group received a much-needed US$2.2 billion investment from property developer Sunac China Holdings Ltd.

Sunac said the management change is not an attempt to take more control of Leshi, considered one of the healthiest assets among LeEco's expansive business empire. Liu Shuqing, a Sunac-appointed director on the board of Leshi, emphasized there was no fight for control and they were bullish on LeEco's prospects.

Yuating further added that the cash crunch was a result of the company also seeking billions of dollars in new funding, cutting staff, and the $2 billion transaction to acquire USA television maker Vizio falling through. That said, if Jia is stepping down from his leadership role at LeShi in order to focus on trickier dealings like electric cars at other parts of LeEco, then it could be a positive step.

Around 70% of the workforce will be laid off in its sports branches, as LeEco continues to struggle with financial problems, reported China Business Journal.

Shen added that LeEco should revert its focus to its core businesses, such as TV and the online entertainment platform, shrinking its noncore businesses, particularly its smartphones and LeSports unit.

LeEco started out in China as a streaming media provider - it has been referred to as the "Netflix of China" - and looked to expand into the USA by selling affordable hardware that linked consumers to media content from LeEco's partners. Last month, LeEco announced it had abandoned its plan to acquire USA television manufacturer Vizio Inc for $2 billion.

Other reports by Insurance News

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