Leshi didn’t falsify IPO documents, LeEco founder says in interview

Source:Global Times Published: 2017/11/7 21:38:39

Jia Yueting, founder of troubled Chinese Internet company LeEco, denied rumors of possible fraud in the listed arm's IPO and discussed the company's operations in a recent interview.

Among several former members of the China Securities Regulatory Commission (CSRC) who were detained, only three were in charge of IPO-related issues for Leshi Internet Information & Technology Corp, a listed arm of LeEco, and they were not under investigation because of Leshi's IPO, Jia told Lengjing, an investigative financial news program owned by Tencent Holdings.

In November 2016, Li Liang, former head of the CSRC's investor protection department, was accused of graft totaling 6.94 million yuan ($1.05 million) for helping nine companies, including Leshi, in their IPOs, Lengjing reported.

"It's not related to Leshi," Jia said, emphasizing that Leshi did not falsify its IPO documents.

Jia said that all the company's debt in China will be repaid. Total assets worth 40 billion yuan have been frozen, and LeEco owes more than 20 billion. "I'm responsible for about 10 billion yuan [of the debt]," he said.

The interview was carried out in the research and development center of Faraday Future (FF) near Los Angeles. Jia responded to the questions as the founder of electric car start-up FF.

He said he will not return to China in the short term, as he has to guarantee that his investment of $1 billion in FF yields results. A-round financing for FF has not seen any progress so far.

As to the difficulties in fundraising, Jia said he expects the situation will get better in the next three or four months. He plans to sell his stake in US electric car start-up Lucid Motors, he added.

Jia said the company's failure mainly reflected problems in the corporate strategy. "To build an ecosystem was right, but the pattern of development was wrong," he noted.

LeEco has expanded into many sectors including TV and films, streaming video and smartphones.

Jia said that the company's future is about artificial intelligence (AI), noting the largest application of AI is in the automotive sector.

Posted in: COMPANIES

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