Caixin
Apr 14, 2021 05:31 AM
BUSINESS & TECH

Jia Yueting, Other Leshi Former Executives Banned from Securities Market for Life

What’s new: China’s securities regulator banned Leshi Internet Information & Technology Corp.’s founder Jia Yueting and other former executives from the securities market for life in connection with their role in the company’s financial fraud from 2007 to 2016.

In addition to Jia, other individuals banned include: Yang Lijie, former financial chief of Leshi, former vice chairman and deputy general manager Liu Hong, former chairman of supervisory board Wu Meng, and former deputy general manager Jia Yuemin, brother of Jia Yueting, according to a statement released Tuesday by the China Securities Regulatory Commission (CSRC).

These individuals are also banned from acting as director, supervisors, or senior executives at listed companies or non-listed companies, or conducting securities business at any institutions, the CSRC said.

The CSRC 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 in its annual reports from 2010 to 2016, including inflated revenue and profits and fraudulent transactions and contracts.

Jia and Yang played key roles in organizing, planning, leading and implementing a scheme to conceal and fabricate important facts, resulting in a huge amount of fraud, the CSRC said.

The background: The move came after the CSRC on Monday slapped fines of 240 million yuan ($36.7 million) each on Leshi and Jia.

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 debt. Jia was blacklisted as a debt defaulter by a Chinese court. In October 2019, Jia filed for bankruptcy in the U.S.

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Denise Jia (huijuanjia@caixin.com)

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