Yueting is believed to be in the US and is attempting to build up his Los Angeles-based electric car company Faraday Future

Jia Yueting, founder of debt-laden technology brand LeEco (owned and operated by Leshi Internet), defied Chinese market regulator’s order to return home, and announced he would instead send his wife and brother to deal with the company’s investors and creditors.

In a letter addressed to the Beijing branch of the China Securities Regulatory Commission (CSRC) and posted on China’s popular social media platform Weibo, Yueting said he has entrusted his wife Gan Wei and brother Jia Yuemin to fulfil his shareholder responsibilities.

“I have entrusted (wife) Ms Gan Wei and (brother) Mr Jia Yuemin with full power to exercise my rights as the public company shareholder and fulfil my shareholder responsibilities,” Yueting said in the letter.

Last week, the CSRC had ordered Yueting to return to the country by the end of December and sort out debt issues. Early last month, Yueting’s name was added to a nationwide list of debt defaulters after he failed to pay back US$71 million to Ping An Securities Group.

As per an AFP report, Yueting is believed to be in the US and is attempting to build up his Los Angeles-based electric car company Faraday Future.

Separately, on her own Weibo account, Gan said she would be meeting creditors to resolve the debt problems. The 33-year-old Gan, an actress and producer on several feature films, said her husband owed 6.9 billion yuan (US$1 billion) on loans connected to pledged shares. He has paid 1.7 billion yuan in interest on related loans since 2014, she wrote Tuesday.

In the letter, she blamed LeEco’s debt woes on one bank which sued him after he was “only a mere two weeks overdue on a 30 million interest payment”.

Leshi was started in 2004 by Yueting as a video streaming company. In 2016, it made a thundering entry into smartphones, smart bikes and other consumer electronics under the LeEco brand, with an offer to acquire American TV maker Vizio for US$2 billion (the agreement was later called off). To finance its various ambitious projects, LeEco borrowed billions of dollars in investments, including a US$2.2 billion in January this year from property developer Sunac China Holdings. LeEco was planning to invest the money to invest in its film production company Leshi Pictures and to further grow its smart internet TV unit Leshi Zhixin.

However, LeEco’s expansions plans did not go well as planned. As the pressure from lenders mounted, in July he resigned from Leshi Internet as well as other roles within LeEco’s various ventures. A week earlier, a Shanghai court had frozen US$182 million worth of assets tied to Jia, which amounted to 40 per cent of the company’s stock.

A few weeks before its massive funding round, LeEco reportedly fired over 85 per cent employees in India.

In November 2016, LeEco secured US$600 million of funding from a dozen of local investors.

 

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