Faraday Future Boss Ordered To Return To China To Pay Off Debt

Lester Mason
Декабря 30, 2017

China's securities regulator has formally 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-autos group. Other assets may yet face action from the Beijing court, which is responding to a company that says Jia owes it more than 200 million yuan, Bloomberg said.

The news comes just weeks after Yueting was placed on an official list of debt defaulters in China for failing to comply with a court order to pay one of his creditors. In an unusual public letter posted Monday, the CSRC said 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". 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. It did not specify where Jia was, although he has business interests in the United States. Since then he's resigned as the chair of LeEco's main listed unit, LeShi Internet Information and Technology.

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LeEco's financial troubles have been in the open for over a year, and are despite rescue efforts by property developer Sunac China, which this week increased its stake in movie subsidiary Le Vision Pictures. He also invested in USA electric-car startup Faraday Future. The company is hopeful of having the vehicle on sale by 2019 though will need significant investment. But Jia is no longer the largest shareholder, according to three people with knowledge of the company's finances, because he transferred his controlling shares in Faraday Future's holding company to his nephew, Jiawei Wang, earlier this year.

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