Economy

LeEco Founder Ignores Return Order by China, Stays in US

LeEco Founder Ignores Return Order by China, Stays in US”

Jia Yueting, founder of Chinese tech giant LeEco and recently-appointed CEO of Faraday Future, is refusing to return to China despite orders from regulators.

This is happening as the China Securities Regulatory Commission has notified him that he should return to the country to work with investors and creditors on the massive debt that he has amassed to cover losses in the wake of the company's failed global expansion.

"I am deeply sorry and blame myself for the negative impact of LeEco's debt crisis", he said in the statement that was posted on his official WeChat account on Tuesday. A Chinese court seized nearly $200,000 worth of his assets in the same week in response to a company that says Jia owes it over 200 million yuan.

In an official response to the order via his Weibo account, Jia Yueting said he needs to remain in the USA to oversee his electric auto startup, the Faraday Future.

In a statement issued by the holding company in October, the company said Yueting had promised in 2015 to make two interest-free loans payable in 10 years or more worth a combined $872.6 million, while his sister had agreed to make loans valued at $260.2 million.

"The fundraising for Faraday Future in the United States is making significant progress and there are many tasks I need to push forward in order to ensure the production and timely delivery of the FF 91", Jia said.

"To better solve the debt problem, I have entrusted Gan Wei (his wife) and Jia Yuemin (his younger brother) to act as my sole agent to exercise shareholders' rights and responsibilities, including asset disposals and other related work", he said.

He said his brother met with regulators in person on Friday last week to discuss the matter.

Leshi internet Information & Technology, the listed arm of LeEco which focuses on online video business, which is believed to have had a 60 billion yuan valuation, has also been under trading suspension since mid April, pending a restructuring application.

He also cited a single late payment in July as being one of the key causes of LeEco's cash-flow problems, saying it led to the freezing of his assets and prompted a slew of early loan recoveries. He added that the problem was escalated by "false and malicious" reports from the media.



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