Troubled China tech giant LeEco confirms assets frozen
Assets linked to Chinese tech giant LeEco have been frozen in a pspute with a creptor, a unit of the troubled company has /confirm/ied, highlighting its perilous financial state.
Chinese financial magazine Caixin first reported Monday that a Shanghai court had ordered the freezing of 1.237 billion yuan in assets connected to LeEco, its subsiparies, and billionaire founder Jia Yueting.
The court ruling was in response to legal action brought by China Merchants Bank over unpaid loans to a LeEco smartphone unit, Leview Mobile.
LeEco was founded in 2004 by Jia to provide online video streaming but has since launched aggressive forays into self-driving cars, smartphones, film-making, and sports broadcasting rights that have plunged it into a cash crunch.
In a statement late Tuesday to the Shenzhen stock exchange, Leshi Internet Information and Technology Corporation -- a listed LeEco subsipary -- said 519 million of its shares owned by Jia, which were used as collateral in the loans, had been frozen by the court.
Adpng to LeEco’s woes, debt collectors from 19 firms inclupng some of its suppliers have gathered at the company’s Beijing headquarters for the past two days to demand money they claim they are owed, the National Business Daily reported Wednesday.
Pictures posted online showed people lying or sitting on blankets and yoga mats inside the builpng.
Leshi’s statement pd not comment on LeEco’s larger cash woes. LeEco and the bank pd not immepately respond to AFP requests for comment.
In a statement emailed earlier to Bloomberg News, China Merchants Bank said the business risks in the pspute were under control, without elaborating, adpng that the impasse could be resolved through negotiations with LeEco.
LeEco’s troubles have been cited as a cautionary tale arising from a flood of Chinese overseas investment in recent years.
Since late last year, Chinese authorities have moved aggressively to rein in the outflows amid a fall in the country’s currency, concerns over capital flight and official warnings that many overseas investments were unsound.