Leshi founder ordered to return to China to deal with firm's financial woes
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The China Securities Regulatory Commission has been pushing for Jia Yueting's return since September.
PHOTO: REUTERS
BEIJING (BLOOMBERG) - China's stock regulator issued an order late on Monday (Dec 25) for Leshi founder Jia Yueting to return to the country before the end of the year to deal with the company's financial woes.
The Beijing branch of China Securities Regulatory Commission said that despite repeated calls from the regulator, the founder has yet to show up and deliver on his promise to provide interest-free loans to Shenzhen-listed Leshi Internet Information & Technology Corp, which is mired in a "huge amount of debt".
The CSRC has been pushing for Mr Jia's return since September.
"The debt has yet to paid back," the agency said in a statement. "It has severely hurt the interest of the listed company and investors and has had an extremely adverse social impact."
Mr Jia made his fortune at Leshi with a video-streaming service similar to Netflix, but he borrowed heavily against his shares in the company to expand into new ventures, including smartphones and electronics.
He's more recently shifted his focus to making electric cars and has been struggling to raise capital to fund the venture, Faraday & Future Inc.
In a statement issued by Leshi in October, it said Mr Jia had promised in 2015 to make two interest-free loans payable in ten years or more worth a combined total of 5.7 billion yuan (S$1.17 billion), while his sister Ms Jia Yuefang had agreed to make loans valued at 1.7 billion yuan.
Trading in Leshi shares has been halted since April.
