LeEco founder Jia Yueting ordered back to China to sort out subsidiary’s financial troubles
The China Securities Regulatory Commission has stepped up efforts to show it is serious about protecting investors on the mainland. Leshi, the debt-saddled video-streaming unit of LeEco, is listed on the Shenzhen Stock Exchange.
China’s stock regulator issued an order late on Monday for LeEco founder Jia Yueting to return to the country before the end of this year to deal with the financial woes of his company’s Shenzhen-listed subsidiary.
The China Securities Regulatory Commission (CSRC) said Jia has yet to show up and deliver on his promise to provide interest-free loans to debt-mired Leshi Internet Information & Technology Corp, despite repeated calls from the regulator.
The CSRC has been pushing for Jia’s return since September.
“The debt has yet to be paid back,” the agency said in a statement. “It has severely hurt the interest of the listed company and investors and has had an extremely adverse social impact.”
Jia made his fortune at Leshi with an online video-streaming service similar to Netflix, but he borrowed heavily against his shares in the company to expand into new ventures, including smartphones and electronics.
In July, Jia ceded his positions as chairman and board member at Leshi to focus on privately held conglomerate LeEco’s electric car start-up Faraday Future. This venture, which Jia had envisioned to one day challenge Tesla, has also been struggling to raise capital.
