LeEco founder switches roles, takes chairmanship of car unit

Mr Jia Yueting's grip on LeEco has slipped after expensive forays into cars and smartphones that stretched its balance sheet.
Mr Jia Yueting's grip on LeEco has slipped after expensive forays into cars and smartphones that stretched its balance sheet.PHOTO: BLOOMBERG

HONG KONG • LeEco founder Jia Yueting has resigned as chairman of its main listed unit, Leshi Internet Information & Technology Corp, in favour of leading LeEco's fledgling car division.

The move allows Mr Jia to devote his time to cars and, in particular, to Faraday Future, the US-based start-up he personally backs that is trying to raise funds to bring the FF91 electric car to fruition.

Mr Jia, who had quit as chief executive officer of TV and media giant Leshi Internet Information & Technology, will now step down from the board, the company said in an exchange filing.

Mr Jia's grip on LeEco itself, which he once portrayed as superior to Tesla and Apple, has slipped after expensive forays into cars and smartphones that stretched its balance sheet.

The entrepreneur told shareholders last week the cash shortage afflicting the conglomerate had worsened in past months, accepting blame for pushing too fast into those areas.

Writing in a post on his public WeChat account, Mr Jia had apologised for causing worry, and pledged to pay back LeEco's debts and to stick to its ambitious electric vehicle project.

"Please give LeEco some time, please give LeEco car some time, we will pay back creditors, suppliers and any other debts."

He added: "LeEco's car business is sticking with its strategy, and no matter what the obstacles, they won't detract from our dream to revolutionise the industry."

Earlier this week, US$182 million (S$252 million) of assets owned by Mr Jia or the firm were frozen by a court in Shanghai.

Several suppliers to LeEco's sports and hardware businesses in the US, Hong Kong, India and China have taken the firm's units to court over allegations of unpaid bills.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 07, 2017, with the headline 'LeEco founder switches roles, takes chairmanship of car unit'. Print Edition | Subscribe