LeEco founder ‘has bank accounts frozen’

By BBC

The billionaire co-founder of struggling Chinese technology giant LeEco has had personal assets frozen by a Shanghai court, state media reports.

Assets worth a combined 1.24bn yuan ($183m; £141m) belonging to Jia Yueting, his wife, and three affiliates have reportedly been blocked.

The ruling follows LeEco’s failure to pay interest due on bank loans taken out to fund its smartphone business.

Neither Mr Jia nor the company has commented on the reports.

‘Severe’

LeEco was for a while known as the Netflix of China, a company that streamed content and eventually started making its own original material.

But it then drew comparison with the likes of Apple and Tesla when it began branching out into hardware, including a smart TV, phones and electric cars.

LeEco started selling devices in the US at the tail end of last year, but is now facing a cash crunch and has been forced to slash costs, including making job cuts.

Mr Jia, who resigned as chief executive in May but retains his position as chairman, recently admitted to shareholders that its financial problems were “more severe than we expected”.

In April, a $2bn deal to buy consumer electronics-maker Vizio was called off because of “regulatory headwinds”.

Business problems

People look at the Letv 120-inch UHD 4K panel, January 9, 2016 in Las Vegas, Nevada at the CES 2016 Consumer Electronics Show
Image caption: LeEco’s television business Letv launched in the US last year

Meanwhile LeEco’s smartphone unit, Coolpad, has further delayed its 2016 financial results because of audit issues. The company’s unaudited results from May suggest it lost $542m last year.

Coolpad shares listed in Hong Kong have been suspended from trade for three months.

The news of the court freeze on some of LeEco’s assets was welcomed by Philip G Chiu, CEO of US-based marketing firm Beyond Media Global.

He took LeEco business LeTV to court over debts of $1m but claims that it still owes his firm around $100,000.

“LeTV has still not paid all their debt to our company,” he told the BBC.

  

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