Shares in China’s Leshi tumble after ‘white knight’ chairman resigns

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HONG KONG (Reuters) – Shares in Leshi Internet Information & Technology Corp Beijing slumped by their daily limit of 10 percent on Friday after its chairman resigned, fanning fears he would no longer play a white knight role for the embattled firm.

Sun Hongbin, who is also chairman of Leshi’s No. 2 shareholder Sunac China Holdings, resigned “due to work adjustment” and asked to leave its board, according to a Leshi filing on Wednesday.

Sun had only become Leshi’s chairman in July following an investment of $2.2 billion and was seen as the main backer for indebted Leshi and the LeEco conglomerate founded by Jia Yueting.

Jia, who has defied court orders to return to China from the United States to repay debts owed by various LeEco units, remains the largest shareholder in Leshi.

Leshi said in filings late on Thursday that it has confirmed with shareholders who hold more than 5 percent that they do not have plans to sell. It also said it has not formed plans to bring in external investors.

Trade in the stock resumed on Friday.