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LeEco founder stays in U.S. to raise funds
Reuters | 2018/1/5

SHANGHAI -- LeEco founder Jia Yueting has defied orders from Chinese regulators to return to the country, saying he needs to stay in the United States to raise funds for his electric car startup. 

The Beijing branch of the China Securities Regulatory Commission issued a notice last month ordering Jia to return to China to sort out his companies¡¯ mounting debts.

In a statement, the executive said he had asked his brother, Jia Yuemin, to meet the regulator to provide a report. 

"I am deeply sorry and blame myself for the negative impact of LeEco's debt crisis," he said in a statement posted on his official WeChat account. 

"The fundraising for Faraday Future in the United States is making significant progress and there are many tasks I need to push forward in order to ensure the production and timely delivery of the FF 91," he said, referring to a luxury electric vehicle that LeEco is developing with Faraday Future. 

Questions have been raised about the FF 91¡¯s prospects, given LeEco's spiraling cash problems as well as its decision to pull out of a joint project with Aston Martin to develop the RapidE electric car.

LeEco is pursuing projects in entertainment, electronics and EVs. 

The company has struggled to pay its debts after its rapid expansion into multiple sectors sparked a cash crunch. At one point, LeEco owed creditors 10 billion yuan ($1.5 billion). 

Jia has tried to ride out the cash crunch by cutting its payroll and selling assets. 

Jia said he had asked his wife and brother to represent him at Leshi Internet Information & Technology, which is selling off assets. Jia stepped down as CEO of the group's main listed unit last May. 

He also said a late debt payment by LeEco last July triggered an asset freeze and a slew of early loan recoveries. He said "false and malicious" reports had affected the business.
 
Jia was placed on an official blacklist of debt defaulters in early December, a move taken by Chinese courts to pressure people and companies to repay debts.


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