REUTERS/Jason Lee
Unpaid loan payments prompted a Chinese court to freeze $ 182 million in assets tied to LeEco chairman Jia Yueting.
The Shanghai High People’s Court took the action last week, clamping down on the assets linked to a loan for the LeEco phone company, Le Mobile, The New York Times reported on Tuesday.
The frozen assets belong to LeEco chairman, Jia Yueting, his wife, and several LeEco affiliates, according to Xinhua.
A LeEco spokesperson told The Times it has resources to cover the debt.
It is the latest of LeEco’s financial woes which Jia acknowledged publicly last fall, as an ambitious expansion in the US began to fall apart. LeEco pulled down about $ 6 billion in funding since early 2016, but has so far yielded little return for its investors, The Times said.
Last week, Jia told shareholders of LeEco’s publicly traded business, Leshi Internet Information & Technology, that the company made mistakes in allocating the funds. Citing a transcript of the meeting, The Times’ Ryan McMorrow and Owen Guo wrote that Jia acknowledged his company’s money troubles had gotten worse.
“The cash problems at the nonpublicly traded businesses are more serious than when this crisis erupted. Our businesses are constantly using cash to repay loans, having a huge impact on their operations,” Jia said, according to the transcript.
Jia, who founded Leshi in 2004, stepped down as its CEO in May.
Ethan Miller/Getty Images)
A LeEco spokesperson contacted by Business Insider Tuesday night did not immediately respond to a request for comment.
About $ 2 billion of the funds LeEco received in 2016 came from the Chinese real-estate developer Sunac China Holdings, which purchased a stake in LeEco last year. LeEco has since laid off about 70% of its US employees and drew down plans to grow its US business, including selling off 49 acres of Silicon Valley land less than a year after it purchased it from Yahoo.
Jia remains the largest shareholder and main backer of the Los Angeles-based electric-car startup, Faraday Future, which itself is seeking $ 1 billion from potential investors to fund its own operations.
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