LeEco Founder's Assets Seized as China Pursues Absent Web Mogul
(Bloomberg) -- A Chinese court has seized all the assets owned by LeEco founder Jia Yueting it could unearth, as the country’s legal bodies step up action against an internet entrepreneur who once declared war on Apple and Tesla Inc.
The Beijing First Intermediate People’s Court seized more than 1.3 million yuan ($200,000) in bank deposits, the court said in a statement posted on its website this week. And it’s eyeing Jia’s shares in publicly listed Leshi Internet Information & Technology Corp. as well as two Beijing properties targeted in previous cases, it said without elaborating. The court said it took action after agreeing to enforce a petition from a securities firm in Fujian proving to recover more than 200 million yuan it claimed Jia owed.
The seizure deals yet another blow to the outspoken founder of a Netflix-style service who expanded aggressively into smartphones and automobiles by borrowing heavily against equity, then faced a serious cash crunch. LeEco’s founder eventually shifted his focus to U.S.-based electric car startup Faraday & Future Inc., which was said to have struggled to raise cash. This month, the country’s highest court placed Jia on a public list of bad debtors and China’s markets watchdog demanded he return to deal with Leshi’s financial woes.
“Jia Yueting has no other bank deposits, housing registration records or automobile registration records that the court can execute upon,” the Beijing court said in its statement.
The court didn’t outline specifics of the Fujian brokerage’s complaint except to say it involved an alleged failure to honor obligations. A LeEco representative said she had no knowledge of the matter.
Leshi Internet remains the largest listed vehicle in the LeEco empire but has been suspended from trade since April. The China Securities Regulatory Commission said this week that despite repeated calls from the regulator, the founder has yet to show up and deliver on a promise to provide interest-free loans to the Shenzhen-listed firm mired in a “huge amount of debt.”
It’s not clear where Jia is, though Faraday has operations in the U.S. Chinese media including the Securities Daily reported he told a staff meeting earlier this month that Faraday had managed to raise more than $1 billion in Series A financing, without naming his investors.
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