Classical music platform Kuke reveals its chairman stepped down in July amid legal, stock market performance woes
Chinese classical music platform Kuke Music Holding announced on Monday (November 4th) that Li Sun has stepped down as the company’s Chairman, effective July 23rd, 2024.
“Ms. Sun’s resignation was not the result of any dispute between Ms. Sun and the company on any matter related to the company’s operations, accounting policies or practices.” Kuke he said in a press release.
After Sun’s departure, This Yuwho serves as both CEO and President, will continue to lead the company.
Sun’s departure comes at a difficult time for the Beijing-based company, which is facing legal and stock market performance challenges. Last month, indie classical music label group Naxos sued Kuke in the U.S. District Court for the Middle District of Tennessee, alleging that he had failed to 1.8 million dollars in the payment obligations covering the last three years.
Naxos claims that Kuke’s financial difficulties began in late 2021, when the company began to fall behind on licensing payments. The legal complaint stems from an eight-year digital distribution deal signed in 2018 under which Kuke licensed music from the Naxos label and third-party content.
Naxos is seeking full payment of the amount owed, along with additional interest and damages, adding further pressure to Kouke’s financial position.
Kuke’s challenges extend beyond the lawsuit. Despite the lift 50 million dollars in its January 2021 initial public offering on the New York Stock Exchange, Kuke faced ongoing challenges in maintaining listing requirements. The company’s share price has repeatedly fallen below the NYSE floor $1 per share, raising concerns of a potential write-off.
While Kuke recently announced compliance with NYSE listing rules when its stock reached approx $1.30the share price has since fallen back below the $1 mark in recent weeks, renewing concerns about its market stability. As of the close on Wednesday (November 6th), Kuke’s stock price was at $0.46. The last time the stock price touched the $1 mark was in early September.
In the first half of 2024, Kuke’s revenue was almost flat 62.6 million RMB (8.7 million US dollars) from RMB 62.1 million in the first half of 2023. However, the company managed to turn a profit in the first half, reporting a net profit of 5.7 million RMBagainst a net loss of RMB 9 million in the previous period.
Earlier this year, Kuke revealed plans to acquire a majority stake Angelina Assets Limited and HNH International Limitedboth belong to the Music Club of Naxos. Kuke has yet to announce any updates on the planned deals.
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