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LeEco Founder Jia Yueting Steps Down as CEO Amidst Massive Corporate Overhaul

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Jia Yueting co-founder and head of Le Holdings Co Ltd poses for

The group has been fighting a cash crunch since past year that Jia said was the result of that aggressive growth.

LeEco encountered a cash crunch previous year that Jia said was the result of that aggressive growth, with the company subsequently seeking billions of U.S. dollars in new funding, cutting staff and abandoning a deal to acquire United States television maker Vizio.

At the same time, Leshi said its chief financial officer Yang Lijie, who has worked for Jia Yueting since 2004, will be replaced by an outsider, Zhang Wei.

It may also continue to invest in Faraday Future, a company backed by LeEco that's attempting to build an electric auto, sources said. Jia will remain as the chairman of Leshi and the CEO of the broader LeEco group.

According to analysts and industry observers, the shake-up in management just four months after property developer Sunac China Holdings invested over 15 billion yuan (US$2.2 billion) in the cash-strapped company is a signal that investors are eager for a renewed focus on profitability measures. It also heavily scaled down its operations in India and let go off about 85% of the staff.

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The board approved longtime Lenovo executive Liang Jun, who joined Leshi as an executive in 2012, to replace Jia as CEO. With this rapid development, the company now has to handle more businesses.

Fok declined to comment on whether there could be a boardroom struggle between Leshi and its investor Sunac, but acknowledged that in every organisation, struggles and different points of view between the executive team are not uncommon especially when the company is facing difficulties.

While Yueting will step down from the position of CEO, he will continue to be the chairman. That said, if Jia is stepping down from his leadership role at LeShi in order to focus on trickier dealings like electric cars at other parts of LeEco, then it could be a positive step.

Jia added that problematic businesses such as ride-sharing unit Yidao Yongche (易到用車網) will bottom out in a year or two, helped by layoffs.

But by November, reports surfaced the company was tightening its belt. Apart from that, Jia says he will put more energy in the development of LeEco's vehicle business to accelerate innovation and bring its e-cars to the market.

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