Chinese firm LeEco's downward spiral continues after unpaid debts lead a Shanghai court to freeze 1.2 billion yuan ($180 million) in assets owned by its subsidiaries, chairman and CEO Jia Yueting and his wife, according to various local media reports citing court documents.
The assets were originally pledged as collateral in 2015 for a 2.4 billion yuan loan, and cover bank deposits and other assets owned by subsidiaries including LeEco's main listed unit, LeShi Internet Information & Technology, LeShi Mobile Intelligence and LeView Mobile.
This is the latest blow to LeEco — once a tech darling success story in China, the firm's fortunes seem to be reversing almost as quickly as they rose. The company, founded by Jia, originally started as an online streaming site before quickly expanding its business into everything from smartphones to electric vehicles. The company even jumped overseas, launching in the U.S. and India.
But LeEco's fast ascent seems to have been funded by ignoring basic business sense as the company spent far beyond its means and failed to replenish its coffers. The fallout from its cash crunch continues to widen, scuttling a $2 billion deal to buy U.S. television maker Vizio, and hurting other related ventures. At one point last year, LeEco was so cash-strapped that Jia said he would cut his salary to 15 cents, and the firm has also suffered from layoffs.
Shares of listed unit LeShi have dropped 14 percent in Shenzhen this year. The stock has been halted from trading a handful of times, with the latest suspension hitting April 14 and continuing through today.