Leshi, Jia Yueting Each Fined $37 Million for Financial Fraud
What’s new: China’s securities regulator fined Leshi Internet Information & Technology Corp. and its fugitive founder Jia Yueting each 240 million yuan ($36.7 million) for financial fraud from 2007 to 2016.
The fine resulted from a regulatory investigation launched by the China Securities Regulatory Commission (CSRC) in April 2019 after the company disclosed that its founder, also the biggest shareholder, was suspected of violating financial disclosure laws.
The regulator found Leshi committed financial fraud for ten consecutive years from 2006 to 2017, resulting in false statements in its initial public offering prospectus in 2010 and private placement offering in 2016, the CSRC said in a statement Monday.
The background: Leshi, a once high-flying video streaming site, has been mired in massive debt woes since its parent, LeEco, suffered a cash crunch after years of aggressive expansion. Leshi was delisted from the Shenzhen Stock Exchange in May 2020 after three consecutive years of losses and a suspension of trading for a year.
Jia fled China to the U.S. in the summer of 2017 and has not returned, leaving behind 11.9 billion yuan ($1.7 billion) of debts. Jia was blacklisted as a debt defaulter by a Chinese court. In October 2019, Jia filed for bankruptcy in the U.S.
Jia is currently chief product and user officer of Faraday Future, a California-based electric-vehicle maker he founded. The startup is also facing funding difficulties. It is currently planning to raise another $1 billion through a backdoor listing on the Nasdaq.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.
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