January 02st, 2018

LeEco founder says “Sorry, I am too busy to return to China” to authorities

Last week we noted that the Beijing Securities Regulatory Bureau had sent a request to Jia Yueting, the beleaguered founder of LeEco aka Leshi (300104.CH), to return to China to repay the debts he piled on the company before he moved to the US last March.  The request asked that this be done before the end of 2017.  Jia replied this morning via his WeChat account, stating “I have paid full attention to the notice issued by the regulator...but there is a lot of work that needs done (in the States), to guarantee volume production and to ensure the delivery of the FF91 (his luxury electric car which is to be released this year).  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.,”
While the Beijing Securities authorities have no power over Jia when he is in the US, given the lack of extradition treaties between the two countries, they have little recourse in forcing his return.  Sunic China (pvt) paid $2.3b to gain a stake in LeEco’s subsidiaries, but the main trading vehicle of the LeEco empire, Leshi Internet Information and Technology has been under trading suspension since April pending a restructuring.  The China Securities Regulatory Commission has yet to start a full investigation of the issues behind LeEco’s problems due to the lack of recourse despite the paper losses sustained by the company’s 200,000 shareholders.