San Francisco : The founder of the debt-laden technology conglomerate LeEco has been ordered by the Chinese authorities to return to his country by the end of December to take care of the company's debts.
According to a notice served to Jia Yueting by China Securities Regulatory Commission (CSRC) in Beijing, the company's 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".
"Our bureau issued to you on September 13, 2017 'Regulatory Concern Letter to Jia Youting' (Jing Zheng Jian Fa, 2017, No.256), which explicitly requires that you immediately return home after your presentation. Since then, many listed companies have also conveyed to you the request to return to their country, but so far we have not seen any action taken by you," the notice said.
"In order to protect the legitimate rights and interests of listed companies and investors, we hereby order you to return before December 31, 2017 to effectively fulfil the obligations of the actual controller of the Company, cooperate with the Company in resolving the problems of the Company, properly handle the risks of the Company and earnestly protect the legitimate rights and interests of investors."
According to a report in Tech Crunch, shares of LeEco's parent, Leshi Internet Information and Technology Corp, were traded on the Shenzhen Stock Exchange until April, when trading was halted to allow the company to review a restructuring plan.
In 2016, the company expanded under the LeEco brand, which included an agreement to buy American TV maker Vizio for $2 billion (the acquisition was later called off), the launch of smartphones, smart bikes and other consumer electronics and a financial partnership with Los Angeles-based electric vehicle startup Faraday Future.
To fund those ventures, LeEco borrowed billions of dollars from investors.
LeEco's expansion failed to take off, the pressure from lenders mounted and in July Jia resigned as Chairman of Leshi Internet and promised to repay LeEco's debts.