A Beijing court has approved China Construction Bank (CCB)โs application to freeze the assets of LeTV Holdings and LeEco founder Jia Yueting, with a total value of RMB 250 million ($37.2 million), local media is reporting (in Chinese).
The Beijing civil court ruled on July 25 that assets owned by Jia, Leshi Internet Information & Technology Co., Leshi Holdings, and Jia Yuemin, Jiaโs elder brother and Leshi Holdings director can be frozen for up to three years.
Itโs been one month since another Chinese court ordered Jiaโs assets frozen. On July 5, Shanghai High Peopleโs Court froze 519 million LeTV shares worth around RMB 15.927 billion ($2.3 billion), calculated at 30.68 apiece. The court carried out this order on behalf of China Merchants Bank.
However, China Construction Bank and China Merchants Bank are only some of the banks involved. LeEco has also borrowed tens of billion RMB from Ping An Bank.
LeEcoโs early signs of trouble started showing up last October, when its cash crunch worsened at an alarming speed, partly due to its outstretched overseas expansion efforts. LeEco expanded its business to U.S. in 2016, but the companyโs expansion to U.S. had gone too far, despite the limited capital and resources, resulting in โan apparent lack of momentumโ in various businesses.
One previous full-time employee at LeEco pointed out that LeEcoโs failed globalization process attributes to these four reasons: language, the resonance of organizational values, leadership and management skills of those in power, and localization.
Following the difficult situation for LeEco, there has been a transition in LeEcoโs leadership. Early July, Jia Yueting stepped as chairman of Leshi, following his resignation from the listed companyโs CEO role in May. Jia was then named as a global chairman of LeEcoโs electric business to focus on making electric vehicles. On July 21, Leshi named Sun Hongbin, chairman of Sunac China Holdings Ltd. as a chairman of Leshi, now controlling LeEcoโs healthier businesses.
