(Yicai Global) Jan. 4 -- Leshi Internet Information & Technology Corp., a struggling internet company set up by controversial Chinese businessman Jia Yueting, has restored wages that it trimmed two years ago during the early days of the Covid-19 pandemic and reduced the working week to four and a half days as business improves, The Paper reported yesterday.

Leshi, operator of streaming site Le.com and hardware retailer Lerong Zhixin Electronic Technology, is implementing a four-and-a-half-day work week from Jan. 1 which includes a five-hour half day on Wednesdays, the report said, citing Chief Executive Officer Zhang Wei. Working hours during the half day are flexible, such as from 10.00 a.m. to 3.00 p.m. or 11.00 a.m. to 4.00 p.m.

And despite the shorter working week, the Beijing-based company has fully reinstated the salaries to what it was paying two years ago as the fewer hours will not affect business, Zhang said in a letter to all employees circulated yesterday.

During the Covid-19 outbreaks, many employees had to work from home. Leshi discovered that some work does not need to be done in the office so it decided to introduce a four-and-a-half day work week, Zhang said.

The news is a sign that Leshi is beginning to turn itself around after a very difficult last few years when the previously successful firm, once known as 'China's Netflix,' found itself mired in debt after Jia borrowed heavily in Leshi’s name to fund diversification into new energy vehicles and other ventures that did not pay off. Jia fled to the US in 2017 to escape the mounting debt crisis and to focus on developing his NEV startup Faraday Future.

The firm, which had liabilities of CNY20.9 billion (USD3 billion) as of Sept. 30, 2020, was kicked off the Shenzhen bourse in May 2020 due to its failure to regain a positive net worth. In September that year, Leshi was found guilty of cooking the books of every annual report from 2007 to 2016 and was fined CNY240.6 million (USD37.8 million) by the securities regulator, equivalent to 5 percent of the amount raised in the initial public offering, and the country’s biggest-ever financial penalty for stock fraud.

Since then, Jia, who has resigned from all his positions at Leshi, has put together a debt restructuring plan and pledged his 33 percent stake in California-based Faraday Future to creditors.

In the first three quarters, Leshi posted a loss of CNY353 million (USD51 million) on revenue of CNY267 million, a drop of 10 percent from a year ago, according to its latest financial report. And its liabilities have shrunk to CNY19.8 billion. Last year the company’s losses narrowed 16 percent year on year to CNY2.1 billion (USD303.7 million), while revenue sank 10.7 percent to CNY418 million.

Editor: Kim Taylor