Tech entrepreneur defies order to return
Print Edition
CHINESE tech entrepreneur Jia Yueting has defied regulators’ orders to return home, saying yesterday his wife and brother would deal with the debt woes plaguing his LeEco conglomerate.
Jia, the 44-year-old head of a tech empire that has spanned electric cars and smartphones, posted a letter on social media to the Beijing branch of the China Securities Regulatory Commission, which last week ordered him to return to the country before the end of 2017.
The one-time billionaire is believed to be in the United States, attempting to build up his Los Angeles-based electric car company Faraday Future. He was added to a national blacklist of debt defaulters by Chinese courts last month over hundreds of millions of dollars in unpaid loans.
“I have entrusted Ms Gan Wei and Mr Jia Yuemin (his wife and brother) with full power to exercise my rights as the public company shareholder and fulfil my shareholder responsibilities,” Jia wrote in the letter published on the Twitter-like Weibo platform.
He said Gan and Jia Yuemin would deal with the debt issues of Leshi Internet, LeEco’s main publicly traded arm. Separately on her own Weibo account, Gan said she would be meeting creditors to “resolve the debt problems.”
Gan, 33, an actress and producer, 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 yesterday.
Leshi’s filings show that nearly all of Jia’s shares were pledged to back loans, though a Beijing court said last month that it had seized more than 1 billion shares — Jia’s entire holding — of Leshi to repay creditors. The court also seized Jia’s two homes in Beijing and US$200,000 from a bank account.
“Jia Yueting has no other bank deposits available, no other home registration records, and no vehicle registration records,” the Beijing No. 1 Intermediate People’s Court said at the time.
Gan said in a New Year’s Eve Weibo post that she had “returned to complete a mission.” Her location was tagged as Beijing airport.
Leshi had a market capitalization of roughly US$9.4 billion last April, but it has suspended trading in its shares since then.
Investment firms have already marked down their holdings. If the company were to delist completely, it could be one of the largest failures of a Chinese publicly traded company — possibly wiping out the investments of its 185,000 shareholders.
Jia in his letter blamed LeEco’s debt woes on one bank that sued him after he was “only a mere two weeks overdue on a 30 million interest payment.” Afterward, in July, as creditors began to swarm, “the production and operation of non-public companies came to an abrupt halt,” he wrote. “Over 10,000 employees were forced to be dismissed, and the only thing left for the company was to sell its assets to repay the debt.”
Jia founded the troubled conglomerate in 2004 as an online video streaming platform, but pushed the tech company into a variety of new business lines — from gaming to sports and more recently, cars.
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