Just after his assets were frozen, and two months after resigning as CEO, LeEco chairman Jia Yueting has resigned from his position at the financially troubled and publicly traded half of the company. This latest news is almost assuredly connected to LeEco’s ongoing financial problems. There is no word yet on how this might affect the privately owned phone manufacturing arm of the company.
The structure of LeEco is a terribly complicated arrangement. We’ve discussed the details extensively in our past coverage of LeEco’s troubles, but the simple version is that there is a publicly traded unit (Leshi Internet Information and Technology Corp. /) and a privately owned unit (Leshi Holding Co.). Up until last month, Jia was in charge of both, until he resigned his position as CEO in the public half, settling for chairman.
A couple days ago the chairman née CEO’s personal assets were frozen in response to worsening debt as at least one of the company’s various loans (totaling some $6 billion) missed payments. The company borrowed heavily in an effort to expand its business but hasn’t had much luck. Allegedly some of Jia’s assets, including up to 40% of all stock for the public company, were used as collateral for the loans and subsequently frozen by Chinese courts.
Today’s resignation is almost assuredly related to the ongoing debt struggle the publicly traded arm of LeEco is facing, but keep in mind that it’s the privately owned unit that handles businesses like LeEco’s phones, TV, and automobile efforts. So far it isn’t clear if any of Jia’s assets related to the private business have been seized, but, presumably, he still maintains financial control of Leshi Holding Co. Jia did state previously that at some point he wanted most of the company’s business to be transferred to the publicly traded unit, but it isn’t clear if that those plans have been carried through as of yet.
- New York Times