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Deepti Sri · · 1 min readChinese regulators fine former CEO of SPAC-linked EV maker $37m over IPO fraud
“Jia Yueting, founder of formerly high-flying technology conglomerate LeEco Holdings, has been fined US$36.81 million by Chinese regulators over false and inadequate financial disclosures in the 2010 IPO of its video-streaming unit in Shenzhen and other fundraisings,” reported Nikkei Asia.
Details:
- The China Securities Regulatory Commission (CSRC) said that the revenues and profits of Leshi Internet Information & Technology, the group’s streaming unit, was inflated through fabricated deals with private companies controlled by its parent firm’s founder.
- Leshi, also known as Le.com, has been fined 240.6 million yuan (US$36.8 million), in addition to the 241.2 million yuan (US$36.9 million) fine on Jia. The CSRC also barred the founder from participating in China’s securities market.
Context:
- The development comes amid the listing plans of LeEco-backed EV maker Faraday Future, which has agreed to go public through a merger with blank-check firm Property Solutions Acquisition Corp, with the deal expected to generate gross proceeds of over US$1 billion.
- Jia resigned as the CEO of Faraday in 2019 after he had filed for personal bankruptcy in the US to restructure US$2 billion in debt.
Currency converted from Chinese yuan to US dollar: US$1 = 6.54 yuan.
Editing by Collin Furtado and September Grace Mahino
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