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Faraday Future's first production model, the FF 91
New CEO of LeEco's listed arm vows to dismantle founder's vision
Bloomberg | 2017/8/1

The new chief of troubled LeEco's listed arm promised to get rid of any businesses that don't align with a renewed focus on TVs and media, unraveling the costly overseas and local ventures championed by founder Jia Yueting that exacerbated a cash squeeze.

Leshi Internet Information & Technology Corp. needs to stop frittering money away and get back to the businesses that made it one of China's largest internet companies, CEO Liang Jun said in an interview with local media that a Leshi spokeswoman verified as accurate.

Anything that doesn't align with that objective could be scaled back or sold, including foreign businesses and live-streaming services, he said without elaborating. In addition, he said he's taken it upon himself to personally restore trust among its largest suppliers and partners.

Jia parlayed a Netflix-like service into one of China's most ambitious internet conglomerates, with interests in everything from electric cars to smartphones and film-making. But those investments triggered a cash squeeze across the broader company and have yet to bear fruit. In response, it's slashed jobs and retreated from some businesses. But more needs to be done, Liang said.

"Jia was like a god, but he's in fact just an ordinary man," Liang told Chinese media outlet in an interview. "His weaknesses include management, operations. But those are our strengths."

It's unclear if Jia will play a major role in Leshi's restructuring. In the interview, Liang said it would be "crazy" to assume the entrepreneur -- who's resigned as both CEO and chairman -- would sever ties completely. However, the new CEO said Jia's weaknesses lay in management and operations, which is why new leadership was required.

The aim is to focus around the smart TVs it produces, which draw some 5 million viewers on a daily basis. While content costs are climbing and its core streaming service is about a 10th the size of Baidu Inc.'s iQiyi and Tencent Holdings, Leshi can build a business around its existing network by combining its TV and mobile audience, he said. Jia himself has said he's now more interested in realizing his ambition of disrupting the automobile industry, even after a Chinese court froze billions of dollars in assets he controlled.

The increasingly beleaguered tycoon now leads LeEco's fledgling automobiles division. That allows Jia to devote his time to cars and in particular to Faraday Future, the U.S.-based startup he personally backs that's trying to raise funds to bring the FF 91 electric car to fruition.

Regulators are said to have begun probing its finances and disclosures as suppliers accuse the company of not honoring its debts. Liang didn't address those reports of official scrutiny, focusing instead on his plans for an internal overhaul. Shares in Leshi have been suspended since April as the company works through its internal revamp.

"When a company is in a tough spot, it's a good chance for a restructuring," he said. "Our goal is to stop burning cash and bring Leshi back to profitability as soon as possible.

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