Caixin
May 15, 2020 06:52 AM
BUSINESS & TECH

Debt-Ridden Leshi to Be Delisted June 5 From Shenzhen Exchange

picture
picture

What’s new: The listing of Leshi Internet Information & Technology Corp. is finally being terminated on the Shenzhen Stock Exchange after three consecutive years of losses and a suspension of trading for a year.

The once high-flying video streaming site, founded by fugitive and now bankrupt tycoon Jia Yueting, reported negative net assets for 2018, and trading of its shares has been suspended since May 13, 2019.

Things haven’t turned around, though the company is still operating. In its 2019 annual report, Leshi disclosed its net loss nearly tripled and reported continued negative net assets, triggering the delisting.

After the listing is terminated, the company’ stock will enter a transitional period starting June 5 and will be finally removed after 30 days.

The background: Leshi attributed the widening loss to debt claims related to its sports and cloud service units. The claims are related to its promise to repurchase shares from investors in the two units if they failed to go public within an agreed period.

The company has been mired in massive debt woes since its parent LeEco was hit with a cash crunch after years of aggressive expansion. Jia fled China to the U.S. and has not returned since the summer of 2017, leaving behind 11.9 billion yuan ($1.7 billion) of debts. Jia was blacklisted as a debt defaulter by a Chinese court. In October, Jia filed for bankruptcy in the U.S.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code