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December 27, 2017

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CSRC orders LeEco founder to return

By Zhu Shenshen | 00:01 UTC+8 December 27, 2017 | Print Edition

CHINA’S securities regulator has ordered the founder of indebted tech conglomerate LeEco to return to China and sort out a mounting debt pile linked to his firms, ramping up pressure on the head of the embattled entertainment-to-auto group.

The heavy debt of LeEco, which is still controlled by Jia Yueting, has “seriously infringed investor rights.” Jia must return to China before Sunday, said the Beijing branch of the China Securities Regulatory Commission.

It did not specify where Jia was, although he has business interests in the United States.

A spokeswoman for LeEco’s main listed unit Leshi said Jia’s personal behavior would not have a major impact on the listed company’s overall operations and his ties with the firm were no longer that close. Jia stepped down as CEO of Leshi in May, but remains the head of parent LeEco.

The companies faced heavy debts and cash problems after LeEco’s aggressive expansion into the new-energy car market, which sucked up the capital of Leshi and forced it to halt trading for over seven months.

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