The founder of LeEco, the tech conglomerate loaded in debt defied orders from regulators in China to return there prior to the end of 2017, claiming that he needed to remain in the U.S. as a new fundraising campaign for his electric car startup has been making progress.
The China Securities Regulatory Commission’s (CSRC) branch in Beijing issued a notice a week ago that ordered Jia Yueting the CEO of LeEco back to China to sort problems out related to the mounting amount of debt tied to his firms and to protect the rights of investors.
Jia in a prepared statement said that he asked his brother Jia Yuemin to meet with regulators last Friday face to face to give them a report after he was issued the notice.
He said that he was sorry and blamed himself for the problems related to the debt crisis at LeEco.
The Faraday Future fundraising in the U.S. is moving forward significantly and many tasks are involved in which he needs to be present to ensure production as well as timely delivery of the FF91, he added referring to the company’s luxury electric vehicle being developed.
Questions have come up about the outlook for FF91 given the spiraling cash flow problems at LeEco and its decision to leave a joint project with Aston Martin the Britain based sports carmaker to develop RapidE electric car.
LeEco, an electric vehicle, entertainment and electronics group, has been battling in an attempt to pay debt after its rapid expansion into several sectors created a cash flow crunch, a drop in shares of the unit that is listed and led to several defaults.
When it was at its highest, LeEco owed 10 billion yuan or $1.54 billion to creditors.
Struggling to keep supporting it goals that included beating Tesla Motors in premium electric car manufacturing, Jia has attempted to ride the cash crunch out by taking money saving measures like cutting staff and selling off assets.
Jia has said that he asked Gan Wei, his wife, and his brother to represent him at Leshi his company in exercising shareholder rights and the sale of assets. Jia then stepped down as the CEO of the main unit of the group last year.
He also mentioned just one late payment in July as the key causes of the cash flow problems of LeEco, saying that led to assets being frozen and in turn prompted a number of early recoveries in loans. He added that malicious and false reports impacted the business.