Wang Zhongjun Steps Down as Chairman of Huayi Tencent Entertainment

China Power list:  Wang Zhongjun Huayi Bros Media - Getty-H 2016
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The Hong Kong-based holding company has been used by Huayi Brothers, Tencent and other investors to make offshore investments into international films, such as the Russo brothers' 'Cherry' and Roland Emmerich's upcoming 'Moonfall.'

Chinese movie mogul Wang Zhongjun, co-founder of Huayi Brothers Media, has stepped down as chairman of holding company Huayi Tencent Entertainment.

Established in 2016, the firm, which is listed on the Hong Kong stock exchange, has been used by Huayi Brothers, Tencent and its other investors as a vehicle to co-finance international films and buy stakes in companies listed outside China. The joint venture was established when its backers took over a Hong Kong-listed shell company that was formerly a retirement home developer in Hong Kong.

Huayi Tencent's recent investments include the South Korean sci-fi film Space Sweepers, the Russo brothers' crime drama Cherry and Roland Emmerich's forthcoming sci-fi action film Moonfall. The firm also owns a 31 percent stake in South Korean TV drama producer HB Entertainment.

Huayi Tencent said in a statement Friday that Wang was resigning "as he needs to devote more time to his other business engagements," and that his exit would be effective March 30.

Huayi Brothers Media, which Wang founded with his younger brother Wang Zhonglei in the 1990s, was previously the largest stakeholder in Huayi Tencent, but the Beijing-based parent company offloaded 13.17 percent of its shares last November, dropping its stake to just 5 percent. The sales were part of an ongoing retrenchment of the brothers' longstanding entertainment empire, which was battered by bad press following a tax evasion scandal that swept the Chinese industry in 2018. The company got a $100 million lifeline from Jack Ma's Alibaba in 2019, and began to see its fortunes recover last year with the $460 million success of its WWII tentpole The Eight Hundred.

Wang's exit from the Hong Kong-listed holding firm comes at a time of radically diminished outbound investment by China's major entertainment companies. After a gold rush period five years ago, when Chinese firms were bankrolling everything from Hollywood slates to new U.S. production entities (Huayi co-financed an entire slate at STX Entertainment and bought a sizable stake in the Russos' production venture Agbo), investment ground to halt in 2017 amid official discouragement of such dealmaking by Chinese regulators, and its declined further amid the deteriorating diplomatic relations between Washington and Beijing.

Huayi Tencent's current CEO Yuen Hoi Po, will temporary assume Wang's day-to-day management responsibilities. A new chairman will be elected "as soon as possible," the firm said in a statement. Yuen is currently Huayi Tencent's largest shareholder with a 17.8 percent stake.