China’s disgraced Leshi sees US$1.8 billion loss for 2017
Shares drop 10% for sixth straight session
After reporting a profit of more than 500 million yuan in 2016, Chinese video-streaming company Leshi has announced an expected net loss of 11.6 billion yuan (US$1.83 billion) for 2017.
The company was once the flagship listed unit of tech conglomerate LeEco, and has blamed debt woes of its parent company on the revenue drop.
LeEco has been mired in a series of scandals, including not paying for services rendered. Beijing’s official China Central Television went so far as to ask last July whether the firm represented a business failure or outright fraud. The state media broadcast cited a report from 2016 that Leshi only received approval to be listed through bribes paid to China’s securities regulator.
“During this reporting period, the continuous capital shortage and liquidity problems from related parties, negative public opinion have greatly affected the reputation and creditworthiness of the company,” the subsidiary was quoted by the Financial Times as saying in a stock filing on Tuesday.
The firm’s shares dropped 10% for a sixth straight day on Wednesday.
LeEco’s co-founder Jia Yueting said in early January that he would not return to China from the US, defying an order from China’s Securities Regulatory Commission. Jia said he is making progress refinancing the electric car firm Faraday Future, and returning to China would jeopardize his efforts.