Chinese Internet entrepreneur Jia Yueting (賈躍亭) has defied orders from regulators to return home and help a listed technology company he founded resolve crushing debt, saying he needed to stay in the US to work on his electric car start-up.
In his first official response to the directive from China’s securities regulator, Jia said via his official Weibo social media account that he needed to oversee Faraday & Future Inc.
His brother, Jia Yuemin (賈躍民), and wife, Gan Wei (甘薇), have been empowered to handle affairs with the Shenzhen-listed firm, Leshi Internet Information & Technology Corp (LeEco, 樂視).
The outspoken founder of Leshi expanded aggressively from the Netflix-like service into smartphones and automobiles before coming under increased criticism from Chinese authorities.
The China Securities Regulatory Commission last month issued an order for him to return by the end of last year, saying Jia and his sister failed to provide loans to Leshi as promised.
The Shenzhen Stock Exchange last week also censured Jia for reneging on that pledge.
Now Leshi and LeEco, the closely held tech giant he helped create, are struggling to pay suppliers and lenders, which has led to Chinese courts seizing and freezing his assets.
Jia said in his Weibo post he would work with Leshi to resolve its issues and apologized for his companies’ debt crisis.
He said his brother met with regulators in person on Friday last week to discuss the matter.
“I am deeply sorry and I blame myself for the huge negative impact the debt crisis of LeEco has brought,” he wrote. “The financing of US-based FF has made great progress and there is immense work that requires me to guarantee on-time mass production and delivery of FF 91 EV,” he said, referring to the start-up’s prototype model.
Leshi Internet remains the largest listed vehicle in Jia’s LeEco empire, but has been suspended from trade since April last year.
The success of Jia’s forays into video streaming encouraged LeEco to expand into new businesses, during which Jia borrowed heavily against equity in Leshi.
In his Weibo post yesterday, Jia placed much of the blame for LeEco’s subsequent cash-flow problems on a single late payment in July last year, which he said led to the freezing of his assets and triggered a cascade of early loan recalls.
He also cited “false and malicious” reports that led to problems with creditors and suppliers.
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