Beleaguered tech firm LeEco’s founder ordered to return to China

The founder of debt-laden tech conglomerate LeEco is facing yet another setback and this time from the China Securities Regulatory Commission Beijing branch. Jia Yueting has been ordered by the Security Commission to return to the country by the end of this month and deal with the company’s debts. The CSRC in its letter on Monday said that its failure to repay debts is “a serious violation of the legal rights and interests of listed companies and the interests of investors, with an extremely negative social impact”.

Shares of LeEco’s parent company, Leshi Internet Information and Technology Corp., were traded on the Shenzhen Stock Exchange until April, but trading soon halted allowing the company to review a restructuring plan.

Leshi was launched in 2004 by Jia as a video streaming service. In 2016, it embarked on an ambitious expansion plan under the LeEco brand, which included an agreement to buy American TV maker Vizio for $2 billion, the launch of smartphones, smart bikes and other consumer electronics and a financial partnership with Los Angeles-based electric vehicle startup Faraday Future. To fund those ventures, LeEco borrowed billions of dollars from investors, with Jia using his own shares in Leshi Internet as collateral to secure funds from securities brokerages.

LeEco’s expansion failed to take off, however, and after coming under pressure from lenders, Jia resigned as chairman of Leshi Internet in July.

Earlier this month, Jia was placed on China’s official list of debt defaulters after he failed to pay back more than 470 million Yuan ($71 million) to Ping An Securities Group and last week Hong Kong media reported that LeEco’s local branch had filed a petition with the territory’s high court to begin liquidation.

Tags: Beleaguered tech firm, LeEco, China Securities Regulatory Commission Beijing, CSRC, Shenzhen Stock Exchange, American TV maker Vizio, varindia