LeEco founder Jia Yueting was ordered to return to China and settle the numerous debts of companies controlled by the troubled entertainment and technology group, Reuters reported earlier today, citing a Monday notice issued by the Beijing division of the China Securities Regulatory Commission (CSRC). The agency claims it already prompted Mr. Jia to return to the Far Eastern country in September but that move wasn’t widely publicized and it’s presently unclear whether it was as highly formal in nature as the newly reported one. The whereabouts of the indebted 44-year-old remain unclear as he hasn’t been publicly seen for months. The CSRC claims Mr. Jia made no effort to comply with the September request.
The entrepreneur also served as the Chief Executive Officer of LeEco’s flagship division Leshi but resigned in May, though he remains in control of the entire group. Many subsidiaries of the Chinese conglomerate defaulted on their debts over the course of this year, prompting the CSRC to call for Mr. Jia to return to his home country and personally settle the matter. The mid-2017 edition of the Forbes Billionaires index puts his net worth at approximately $3.8 billion, though a significant portion of that sum is understood to be directly tied to LeEco’s assets and hence isn’t liquid enough to quickly pay for any of the firm’s debts even if its founder would make any such attempt. The CSRC concluded LeEco‘s failure to willingly honor the obligations to its creditors hurts both its partners and investors, which is understood to be the main reason why it ended up making an unconventional move to personally call for the founder the intervene in the matter.
It’s presently unclear whether the regulator’s notice was primarily aimed at attracting additional publicity to the issue or if the agency believes Mr. Jia may eventually comply with its order. The multi-billionaire was personally listed as a debt defaulter in China earlier this month, shortly after many of LeEco’s units received the same treatment based on a ruling issued by the Supreme People’s Court. LeEco’s cash crunch is largely attributed to its aggressive business strategy that stretched out its resources on moonshot projects and endeavors that didn’t end up yielding short-term gains, ultimately leading the company to surpass more than $1.5 billion in unsustainable debt.