China

LeEco CFO Wu Hui Resigns; LeEco Facing Declining Profits and Management Changes

Summary:

  • Wu Hui, CFO of LeEco, the parent company of Leshi Internet Information & Technology Corp. (300104.SZ), has reportedly resigned from the company, according to CNFOL.com.
  • LeEco has declined to comment on the news.

Why It Matters:

  • Previously, SGI reported that LeEco’s taxi-hailing unit Yidao Yongche’s CEO Zhou Hang had resigned. Subsequently, there was news about Zhou Hang and LeEco’s Chairman Jia Yueting blaming each other for Yidao’s financial issues, especially LeEco’s misappropriation of Yidao’s RMB 1.3 billion funds. After Yidao Yongche CEO’s departure, two other founders of the company, Yang Yun and Tang Peng, also announced their resignations.
  • Wu Hui was said to be the person who led the “misappropriation”. Although LeEco denied that it was a misappropriation, there was confusion and misbehavior in terms of the usage of the fund. This might be the reason for Wu’s resignation. Wu joined LeEco in 2016.
  • Recently, there was news that LeEco plans to sell its real estate properties in Beijing, which the company bought for about US$ 420 million in 2016, in order to save the company from a cash crunch. LeEco’s publicly traded unit, Leshi Internet, posted a net profit of RMB 555 million for 2016, down 3.19% from the previous year. It was the first year in which Leshi posted a decline in net profit in the last six years.