LeEco founder Jia Yueting no longer company’s legal representative
LeEco founder Jia Yueting is no longer the legal representative for the company as the financially beleaguered firm continues to struggle to turn its business around, according to mainland media reports.
On Monday the Beijing News reported that LeEco’s chairman of the supervisory board, Wu Meng, has replaced Jia as the legal representative for LeEco, effective June 13. Wu has been an executive at LeEco since 2004.
A legal representative for the company is the employee with the legal power to represent and act on a company’s behalf, including entering legally binding contracts.
Based on LeEco’s business records, Wu has also replaced Jia’s elder sister, Jia Yuefang, as manager for the company.
A LeEco spokesperson declined to comment on the matter.
Jia’s change in status comes as LeEco continues to struggle with financial problems.
In May, Jia stepped down as chief executive of LeEco’s Shenzhen-listed arm, Leshi Internet Information & Technology, and was replaced by Leshi vice president Liang Jun. Jia however remained chairman of LeEco.
Last week, Jia admitted at Leshi’s annual shareholder meeting that LeEco was still facing cash flow problems, despite a 16.8 billion yuan (US$2.47 billion) investment from real estate developer Sunac China Holdings and other investors at the beginning of the year.
He said that the financial problems were “more severe than we expected” and added that the situation in recent months is worse than last year.
“We thought that we could use 9 billion yuan to solve all the problems. But we made some mistakes and it turns out that [the money] is not enough,” he said.
LeEco first started out as a video-streaming company, but later expanded its businesses to include the manufacture of smartphones, televisions and even developing an electric car.
The firm first admitted it was facing financial difficulties last November, with Jia stating that the company’s expansion had outpaced its ability to raise funds.