LeEco chief steps down from troubled unit to focus on auto dream
Jia Yueting will step down as chairman and board member of Shenzhen-listed arm, after his assets were frozen by a Shanghai court this week
Jia Yueting, the billionaire founder of China’s cash-strapped internet media group LeEco, may have nearly given up many ambitious plans including those surrounding a Shenzhen-listed unit, but not the one to become China’s Elon Musk.
The 44-year-old has not only stepped down as chairman and exited the board of the group’s Shenzhen-listed arm – Leshi Internet Information & Technology Corp, but he will also not take any further role, according to a company statement on Thursday night. Jia remains as Leshi’s controlling shareholder.
In place, Jia has taken the liberty to be the “global chairman” of LeEco’s electric car unit, a business he envisions that could one day challenge Tesla.
Jia will take full responsibility in leading the car unit towards “revolutionising the century-old automobile industry” by helping it “get financing, build up management team, develop and test products and guarantee a production”, said the statement.
The announcement comes as LeEco faces mounting pressure from creditors.
Starting out as a Netflix-like video streaming service, the Beijing-based LeEco has made expensive forays into smartphones and television manufacturing, as well as electric car development, as Jia believes an “ecosystem” style business model would position the company to compete with Western tech leaders Apple and Tesla.
But the overly rapid expansion soon began to drown the company in debt.
Jia announced a cash crunch in November and recently admitted that the company’s cash problem is bigger than he expected, as a 16.8 billion yuan strategic investment from real estate tycoon Sun Hongbin of Sunac China in January didn’t help.
Nervous LeEco creditors have swiftly acted, as on Monday a Shanghai court freezed Jia’s assets, a 26.03 per cent holding in Leshi.
Jia’s exit from Leshi has led to Sunac China’s Sun being proposed as one of the company’s three directors. The other two are LeEco executives.
In an open letter to the public on social media, Jia has asked for more time to repay debt and realise his ambitions of disrupting the automobile industry.
“I sincerely ask everyone to give LeEco a little more time, to give LeEco’s car business a little more time,” Jia said in a post on Weibo, the Chinese version of Twitter, on Thursday.
“We’ll repay our debts to financial institutions, suppliers and everyone else.”
He said his stepping down was to better focus on electric car business so that the company’s FF91 electric car can hit the market soon.