Chinese Internet Tycoon Resigns From Troubled Company
The embattled internet tycoon behind struggling Chinese tech company LeEco has resigned from all his positions at the company’s publicly traded arm, the latest action in a stunning fall for one of the country’s most flamboyant tech icons.
Jia Yueting has stepped down as chairman of Leshi Internet and has also given up several other positions at the company, the company said in a filing. Mr. Jia will become global chairman of LeEco’s electric car business, a separate announcement said.
Mr. Jia’s departure from Leshi Internet ended his tenure at the helm of one of China’s most ambitious tech companies. Last week, a court in Shanghai froze $182 million of assets tied to Mr. Jia, and on Tuesday, shares connected to Mr. Jia totaling 40 percent of Leshi Internet’s outstanding stock were frozen by courts, according to a company filing.
Mr. Jia aggressively pushed Leshi Internet, which had started as a video streaming portal, into a spate of new business lines. Seeking to build a company combining content with hardware, he expanded LeEco, as the group of companies he controls personally has become known. Mr. Jia remains chairman of LeEco Holdings.
That expansion, however, relied heavily on debt to fund LeEco’s ever expanding list of projects and brought in a wide range of investors to fund the newly established LeEco companies. Some had little investment experience, and were presented with guarantees that obscured the risk of start-up investing.
“Today LeEco faces huge challenges and I take full responsibility,” Mr. Jia wrote in an open letter published Thursday morning in Beijing, asking for more time for LeEco and its electric car business. “We will fully repay our debts to financial institutions and suppliers,” he wrote.
Mr. Jia began his career a long way from Beijing’s booming tech corridor, starting in a county tax bureau in Shanxi, a coal-rich northern province. As China’s dot-com boom got underway, he moved into tech, starting a telecommunications company, and then founded Leshi Internet in 2004.
Two years later, the little-known Leshi Internet received a coveted slot for a public listing.
两年后，之前鲜为人知的乐视网获得了渴望已久的上市机会。Leshi Internet’s shares soared after going public as China’s retail investors got one of their first opportunities to bet on a start-up with big dreams. By 2015, the stock price propelled Mr. Jia to near the top of China’s richest list, according to the Hurun Report, which tracks the country’s wealthiest citizens.上市后，乐视网的股价飙升，中国的散户投资者有了第一批押注背负大梦想的创业公司的机会。至2015年，上升的股价将贾跃亭推上了胡润中国富豪榜的前列，该榜单追踪中国最富有阶层的排名。
But Mr. Jia led his company into an array of businesses that have not panned out. He invested hundreds of millions of dollars in developing LeEco’s smartphone business Le Mobile, in what the new LeEco chief executive, Liang Jun, last week conceded was mistimed: Fierce competition has eroded profit for most handset makers.
Last year, as Leshi Internet exhausted its credit lines at a dozen Chinese banks, Mr. Jia began pledging shares in LeEco companies as collateral for more loans, borrowing at least $2.1 billion from a variety of nontraditional lenders like security brokerage firms, trust companies and capital management firms. Today, shares Mr. Jia controls in at least six LeEco companies are pledged to lenders, according to Chinese corporate records.
Those same shares were then frozen by courts this week as Mr. Jia had personally guaranteed the debt held by creditors of Le Mobile.
因为贾跃亭此前为乐视移动债权人提供的贷款做了个人担保，这些股份本周被法院冻结。Mr. Jia’s personal guarantees bind together much of LeEco’s debt, setting up a potentially messy situation that could embroil all of the LeEco companies as creditors battle for assets. No LeEco company has filed for bankruptcy, a company spokesman said, and LeEco could still receive a bailout from investors or a state-owned company.贾跃亭的个人担保与乐视的大多数债务捆绑在一起，因此形成了一种十分混乱的局面，有可能会将乐视所有的公司卷入与债权人之间的资产争夺战。一位公司发言人表示，目前乐视没有一家公司提出破产申请，乐视依然可以从投资者或一家国有企业获得紧急财政援助。
LeEco’s electric car ambitions are centered on Los Angeles, where the financially troubled start-up Faraday Future, with more than 1,400 employees, is developing high-end electric cars in a bid to challenge the market leader Tesla Motors.
乐视颇具野心的电动汽车业务主要放在洛杉矶，在那里，拥有1400多名员工、已陷入财务困境的创业公司法拉第未来(Faraday Future)正在研发高端电动汽车，目标是挑战这个市场的领导者特斯拉汽车(Tesla Motors)。
Mr. Jia remains Faraday Future’s largest shareholder and emphasized in his letter on Thursday that he would dedicate his energy to getting the company’s first production-ready model, called the FF 91, into mass production.
Faraday Future is in the process of raising more than $1 billion, a spokesman for the company said in an email, noting that LeEco and Faraday Future are separate companies.