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Chinese classical music platform Kuke Music Holding on Monday (November 4) announced that Li Sun has stepped down from President of the company, effective July 23, 2024.
“Ms. Sun’s resignation was not a result of any disagreement between Ms. Sun and the company on any matter relating to the company’s operations, accounting policies, or practices,” Kuke said in a press release.
Following Sun’s departure, He Yu, who serves as both Chief Executive Officer and Chairman, will continue to lead the company.
Sun’s departure comes at a challenging time for the Beijing-based company, which faces legal and stock market performance challenges. Last month, indie classical music label group Naxos sued Kuke in the US District Court for the Middle District of Tennessee, alleging that it had failed to fulfill over $1.8 million in payment obligations spanning the past three years.
Naxos claims that Kuke’s financial difficulties began in late 2021 when the company started falling behind on its licensing payments. The legal complaint stems from an eight-year digital distribution agreement signed in 2018, under which Kuke licensed music from Naxos’ label group and third-party content.
Naxos is seeking full payment of the outstanding amount, along with additional interest and compensatory damages, adding further pressure to Kuke’s financial position.
Kuke’s challenges extend beyond the lawsuit. Despite raising $50 million in its January 2021 initial public offering on the New York Stock Exchange, Kuke has faced ongoing challenges maintaining its listing requirements. The company’s share price has repeatedly fallen below the NYSE’s minimum threshold of $1 per share, raising concerns about potential delisting.
While Kuke recently announced its compliance with NYSE listing rules when its stock reached around $1.30, the share price has since declined again to below the $1 mark in recent weeks, renewing concerns about its market stability. As of close on Wednesday (November 6), Kuke’s share price stood at $0.46. The last time the stock price touched the $1 threshold was in early September.
In the first half of 2024, Kuke’s revenue was almost flat at RMB 62.6 million (USD $8.7 million) from RMB 62.1 million in the first half of 2023. However, the company managed to turn a profit in H1, reporting a net income of RMB 5.7 million, versus a net loss of RMB 9 million in the year-ago period.
Earlier this year, Kuke disclosed plans to acquire majority stakes in Angelina Assets Limited and HNH International Limited, both owned by the Naxos Musical Group. Kuke has yet to announce any updates on the planned deals.
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