(Yicai Global) May 10 -- The Shenzhen Stock Exchange said it will indefinitely suspend the listing status of ailing Leshi Internet Information & Technology, which has been embroiled in a financial crisis since 2017, from May 13.
Trading in the stock [SHE:300104] will not resume unless the Beijing-based company's financial report for this year shows that its assets swung back into the black, the exchange said in a statement today.
Under the exchange's ChiNext board's rules a company with negative net assets in the most recent financial year will be suspended, and will be delisted if it posts negative net assets for a second year in a row. Leshi's were negative to the tune of CNY3.03 billion (USD444.8 million) at the end of last year, the firm's annual earnings report showed on April 26.
Trading in Leshi's stock was halted on April 26 after it fell nearly 40 percent in the previous four sessions. On April 25, the shares closed at CNY1.69 (25 US cents) each.
Founded in 2014 by controversial Chinese businessman Jia Yueting, Leshi was once one of the leading internet businesses in the country. But from the second half of 2016 the firm defaulted on payments to suppliers and its capital chain ruptured. That had developed into a full-blown financial crisis by 2017. Jia resigned as president in July 2017 and left the country for the US. He has not been back to China since.
He is still Leshi's actual controller, holding a 23.1 percent stake, public information shows. But most of his shares are pledged for loans and are frozen by court order, so the firm's controller may change.