(Yicai Global) Feb. 28 -- Leshi Internet Information and Technology, one of China's largest online video streaming firms, is in danger of being kicked off the Shenzhen Stock Exchange as its 2019 loss almost tripled to CNY11.3 billion (USD1.6 billion), the firm said yesterday in an unaudited earnings report.

Leshi had its Shenzhen listing suspended last April on a dismal performance that saw net assets attributable to shareholders dwindle to CNY304 million (USD43.4 million) at the end of March 2019 from CNY13.6 billion a year earlier. Overambitious diversification efforts by its founder, disgraced business tycoon Jia Yueting, have led to losses of around CNY30 billion over the past three years.

Companies that fail to regain a positive net worth after a year of suspended trading can be booted from the stock market, according to the country's securities regulations. On the last day of trading last year, Leshi's shares [SHE:300104] closed at CNY1.70 (USD0.24) with a market capitalization of under CNY7 billion.

The Beijing-based company's operating income fell 69 percent last year from 2018 to CNY490 million (USD70 million), according to its earnings report. Leshi's revenue from advertising, subscribers and content has plummeted due to the sustained damage to its brand and goodwill, it added. Income from long-term assets such as the copyright to films and TV dramas can no longer cover their costs.

The firm has been dragged through the mud by Jia who borrowed heavily in Leshi's name to fund diversification into new energy vehicles as well as other ventures that have not paid off. It is facing mounting lawsuits to repay CNY9.8 billion leveraged in 2016 to finance sister companies LeTV Sports Culture Develop, a sports event media platform, and cloud computing unit LeCloud.

Jia, who fled to the US in 2017 to escape the mounting debt crisis and to focus on developing his new energy vehicle startup Faraday Future, has since resigned from all his positions at Leshi although as of the third quarter of last year he remained a majority shareholder with a 23.1 percent stake. He has pledged to honor all of his debts, but little has been forthcoming.

Last October, Jia filed for personal bankruptcy and debt restructuring in the US with liabilities of over USD3.6 billion, claiming to have repaid USD3 billion of it, which Leshi strenuously denies.

Editor: Kim Taylor