Regulator summons LeEco founder back to China

SHANGHAI: China’s securities regulator has formally ordered the founder of indebted tech conglomerate LeEco to return to China and sort out a mounting debt pile linked to his firms, ramping up pressure on the head of the embattled entertainmentto-autos group.

The Beijing branch of the China Securities Regulatory Commission (CSRC) said in a notice late on Monday LeEco chief executive Jia Yueting must return to China by Sunday to “fulfil his obligation” and protect investors’ rights.

LeEco, an entertainment, electronics and electric vehicles group founded by Jia, has struggled to pay its debts after rapid expansion into multiple sectors sparked a cash crunch, a plunge in the shares of a listed unit and led to multiple defaults.

The watchdog said it had previously asked Jia to return to China in September, but since then had not seen any action taken by the LeEco founder to comply.

It did not specify where Jia was, although he had business interests in the United States.

“Firms you control owe huge amounts to listed companies, which has not yet been returned,” said the CSRC. “This behaviour seriously harms the legal rights of listed firms and the personal interests of a wide range of investors.”

A spokesman for LeEco’s main listed unit Leshi said Jia’s personal behaviour would not have a major impact on the listed company’s overall operations and his ties with the firm were no longer that close. Jia stepped down as chief executive officer of Leshi in May, but remains the head of parent LeEco.

Earlier this month, Jia was placed on an official blacklist of debt defaulters The recent troubles underscore an abrupt fall from grace of one of China’s most prominent entrepreneurs, who created a tech empire ranging from a Netflix-like online content platform to a smart-car unit looking to rival Tesla Inc. Reuters