(Yicai Global) April 9 -- As Leshi Internet Information and Technology Corp. appointed Liu Shuqing, a Sunac-affiliated accountant by training who specializes in risk control and senior vice president of the company, as its new chairwoman, all eyes will now turn to her to see how she will manage the cash-strapped company’s problems.
Liu’s appointment last week is part of a recent reshuffle at the top echelons of Leshi’s management. Disposing of its distressed assets as quickly as possible and seeking opportunities to revive its core television business are key to Leshi’s future development after Sun Hongbin, chairman of Sunac China Holdings Ltd., resigned as Leshi’s chairman last month. Liu is an executive from real estate developer Sunac China Holdings Ltd. and her election follows a wave of other appointments in the company top management.
Li Yuhao, backed by Legend Holdings Corp., was nominated as a director candidate at a board meeting of Leshi. Li served as investor director at Legend and head of its online investment department between August 2013 and last September. Sun also once worked for Legend, and New Leshi Zhijia Electronic Technology Co., or NLZ, the television unit of Leshi, is kicking off a new round of funding. So, some may wonder if Li will help secure capital from Legend or other internet companies for NLZ.
Jin Jie and Tan Shu recently resigned as deputy general managers of Leshi due to personal reasons and will no longer hold any positions at the firm. Tan served as senior vice president in charge of ecosystem marketing and customer operations center at Leshi, while Jin was co-president of LeFinance. The departure of senior managers from Leshi is reflective of its operating difficulties, but it also leaves room for new entrants.
Leshi is set to face more challenging situations this year, regardless of personnel arrangement it makes, Liu Buchen, an experienced home appliance market observer, told Yicai Global. With debts coming due in the first half of the year and its main business shrinking substantially, and, in the words of Sun, “neither cash flows nor profits will be generated,” Leshi’s financial problems are set to deteriorate rather than improve. In fact, the recent wave of executive departures from Leshi and NLZ is already reflective of Leshi’s operating difficulties.
Leshi's board recently passed a proposal on applying for a CNY198 million (USD31 million) two-year loan from Bohai International Trust Co., a subsidiary of HNA Capital Holding Co., which will be used to repay some of its maturing bank loans. Liu’s appointment is also related to securing this loan, some media reports suggested.