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Shanghai court rules LeVR founder to sell shares to pay off debts of RMB 530 mln

CKN
minutes 2019/02/02 06:43:10
2,098
China's News, China Financial News, Debt

Feb 02, 2019 (China Knowledge) - Jia Yueting who is the founder of Chinese tech conglomerate LeEco is likely to pay off his debts by selling shares of LeVR. LeVR is another affiliate of LeEco. This is the latest financial woes faced by LeEco following local judges freezing the founder's stakes in Le.com.

According to a Chinese Jiemian report, the Shanghai regional court ruled that LeEco-owned LeView Mobile Ltd is to pay debt of RMB 530 mln to Leyu Fund – a Shanghai-based private equity firm. In the event that LeView refused to comply, Mr Jia is also allowed to sell his 39.63% shares of Leshi Chuangjing Technology owned by LeEco. The court also ruled that both Jia himself and LeEco were ruled to bear joint liability.

In May 2015, Leyu Fund signed a loan contract with Mr Jia and his companies. In return, LeEco will receive RMB 410 mln with a 15% interest rate over the period of three years. In July 2017, Mr Jia failed to fulfil his obligations after the due date. Subsequently, a lawsuit was filed against LeView Mobile Ltd as well as its parent company LeEco to Shanghai Senior People's Court.

Leshi Chuangjing Technology is one of the main investors backing LeVR. It belongs as an affiliate of LeEco which was founded in 2015. The firm focused on developing consumer-faced virtual reality (VR) products.

In December 2015, the company announced its first VR headset LeVR COOL 1. It completed its Series A at a valuation of RMB 3 billion in the next year. This made LeVR the most valuable VR startup in China at that time.

In 2017, LeVR was later dismantled after its parent company LeEco was burden down with massive debt since late 2016. In August 2018, LeEco’s Shenzhen-listed subsidiary Le.com made announcement that they owe RMB 6.7 bln in debt.

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