LeEco Founder Says Wife, Brother to Handle Debt Issues as Proxies

The founder of beleaguered technology firm LeEco said Tuesday he had “entrusted” his wife and brother to exercise their collective rights as shareholders, and carry out tasks including asset disposal at the debt-ridden company on his behalf.

Jia Yueting’s post on his verified Sina Weibo account came after the Beijing branch of the China Securities Regulatory Commission (CSRC) on Dec. 25 asked him to return to the country by the end of 2017 to deal with LeEco’s mounting debt problems.

The commission has no power of enforcement and cannot compel Jia to return from the U.S., where he currently lives.

LeEco has been struggling for more than a year now. Jia first admitted in November 2016 that he had expanded too quickly into a raft of new businesses such as smartphones and new-energy cars, which went far beyond the company’s core online video service. Since then, many of LeEco’s suppliers and business partners have complained of unpaid bills, forcing the company to scramble for new funds. The regulator said the debt problem has tremendously violated investors’ rights and has had an extremely negative impact on society.

Gan Wei, Jia’s wife, retweeted her husband’s post on her own Weibo account Tuesday and vowed to “do her best” to help solve the debt problems at LeEco.

In her own Weibo posts, Gan said Jia sold a total of 9.7 billion yuan worth of LeEco shares, and took out 6.9 billion yuan in loans backed by LeEco shares he pledged.

Gan said the funds raised were not used for personal or family purposes, and that their family assets, including two properties in China, have been frozen.

Contact reporter Pan Che (chepan@caixin.com)