Date
21 July 2017
LeEco founder Jia Yueting has seen assets worth millions of dollars getting frozen after the group missed a bank interest payment. Photo: Bloomberg
LeEco founder Jia Yueting has seen assets worth millions of dollars getting frozen after the group missed a bank interest payment. Photo: Bloomberg

LeEco founder’s assets, shares frozen over missed payment

A Chinese court has frozen nearly US$181 million in assets partially owned by LeEco Holdings founder Jia Yueting over a missed interest payment, and an additional US$2.3 billion worth of shares in the technology firm’s listed unit, the Wall Street Journal reports. 

The order by the Shanghai High People’s Court came after China Merchants Bank filed a petition after a LeEco subsidiary missed an interest payment, according to the report.

About 1.24 billion yuan in assets owned by Jia Yueting and his wife Gan Wei, along with three of LeEco’s units, were frozen, the paper said, citing Chinese media and a court filing dated June 26.

Apart from that, billions of dollars worth of shares in the group’s listed unit, Leshi Internet Information & Technology Corp., were frozen, deepening the conglomerate’s financial distress.

On Tuesday, Leshi Internet Information & Technology, which runs an online video streaming site, said the Shanghai court had frozen more than 51.9 million shares, or 26 percent of the firm’s total shares, owned by Jia and its controlling shareholder LeEco, for three years.

That was in addition to the 2.83 million shares owned by Jia and LeEco that had already been frozen, according to a filing to the Shenzhen Stock Exchange.

The share freeze was the result of property preservation over Jia’s joint guarantee in financing for LeEco’s mobile business, the company said.

Leshi Internet said it cannot assess the share freeze’s impact over the firm’s ownership, but stressed that it won’t affect its normal operations.

The latest batch of shares owned by Jia that were frozen is valued at around 15.9 billion yuan, based on the firm’s latest share price, according to the Journal.

Leshi Internet has halted trading in its shares since April due to a restructuring plan. It had a market value of 61.2 billion yuan as of Tuesday.

LeEco, which had been dubbed China’s Netflix, established its presence as an online streaming-content provider but later expanded its business to include smartphones and electric vehicles.

The technology group’s financial woes came to light after Jia admitted to a cash crunch in a letter to employees last fall.

– Contact us at [email protected]

RC

EJI Weekly Newsletter

Please click here to unsubscribe