(Yicai Global) April 9 -- Leshi Internet Information & Technology, the listed arm of troubled Chinese tech firm Leshi, has no clear timetable for delisting and is still pondering a sale of Faraday Future shares to raise funds to pay its debt, according to a media report.
The stock exchange has the right to expel Leshi if the company's 2018 financial report shows negative net assets or the firm is continually labeled by auditors as "unable to evaluate," since that fits with the securities regulator's rules, state-backed The Paper reported, citing Board Secretary Bai Bing.
The Shenzhen Stock Exchange will delist the company if it continues to meet this criteria in a year or even longer, per the exchange's rules. Founder Jia Yueting confirmed on April 1 that regulators may force the Shenzhen-listed company to leave the exchange.
But the company's management cannot provide a clear timetable, and Leshi will not comment on whether this will happen or not, Bai said at an extraordinary meeting of shareholders in Beijing today.
Leshi expects shareholder equity attributable to the company was in the red last year, according to an earlier notice. Under the rules of its ChiNext board, the Shenzhen Stock Exchange has the right to end trading in the Beijing-based company's stock if its net profit or net assets stay negative this year.
Leshi has never tried to use its television-making unit, Leshi Zhixin Electronic Technology, to adjust its market value and change the course of its looming delisting, General Manager Zhang Wei told The Paper.
An investor asked about collecting debt from Jia, a major shareholder and also the founder of electric carmaker Faraday Future. Leshi has been talking with related parties about debt collection, and it has not given up the option of cash repayment and using assets such as Faraday's stock, Bai said. The firm has not yet come up with any concrete plans, Zhang added.