Jia Yueting, founder of troubled Chinese Internet firm LeEco, has denied rumors about the company's supposed listed arm's IPO fraud and responded to a slew of questions about the company's operations in a recent interview.
Among the several former members of China Securities Regulatory Commission (CSRC) who were detained, only three were in charge of IPO-related issues for Leshi Internet Information & Technology Corp, a listed arm of LeEco, and were not under investigation because of Leshi's IPO, Jia told Lengjing, an investigative financial news program owned by Tencent Holdings.
In November 2016, Li Liang, former head of the investor protection department under the CSRC, was accused of graft totaling 6.94 million yuan ($1.05 million) which provided help to nine companies, including Leshi in IPO, Lengjing noted.
"It's not related to Leshi," Jia said, emphasizing that Leshi has not falsified its IPO documents.
Besides, Jia said he will pay back all the debt that the company now owes in China. For the moment, the total assets worth 40 billion yuan have been frozen, and LeEco owes more than 20 billion. "I'm responsible for about 10 billion yuan [of the debt]," he said.
The interview was carried out in the research and development center of Faraday Future (FF) in Gardena, Los Angeles. There, Jia responded to the questions as the founder of electric car startup FF.
He noted he will not return to China in the short term, as he has to guarantee that his investment of $1 billion in FF will show results. However, A-round financing for FF has not seen any progress so far.
Jia said the company's failure is mainly due to a proactive corporate strategy. "To build an ecosystem is right, but the pattern of development is wrong," he noted.
LeEco has been spreading its business into various sectors including television, film, video-streaming, smartphones and so on.
Jia emphasized that the company's future is about artificial intelligence (AI), noting the largest application of AI is in the automotive sector. But the company has decentralized its focus into different sectors instead of becoming a leader in one area.
In terms of the difficulties that the company has encountered in FF fundraising, Jia said he expects the situation will get better in the next three or four months. And now he is planning on selling his stake in the US electric car startup Lucid Motors and pushing forward A-round financing for FF.
