LeEco chairman has $182 million in assets frozen after failing to pay off company's debts


Call it schadenfreude if you will, but LeEco's massive death spiral is getting ever more interesting to observe. Previously, the company officially halted its ambitious plan to expand onto US territory, fired about 80 percent of its workforce in the country, and sold off the property on which it had previously planned to build a Silicon Valley HQ. But this wasn't nearly enough to cover all the debt, though, as a Shanghai court has now frozen $182 million in assets tied to LeEco's founder, Jia Yueting.

The freezing of the assets, which are property of Jia, his wife, and three unnamed affiliates of the company, is a direct result LeEco raising more than $6 billion in cash from investors last year, and then failing to return on that investment to its loaners. But even before the court took these measures, the company was struggling to pay off its debt, with its ride-sharing affiliate, Yidao Yongche, being sold off to an unknown entity just last week, after months of not paying its drivers.

Meanwhile, the company is not just missing payments to its debtors, but to its employees and suppliers as well — and as one might imagine, not paying the very same people who provide you with components for your products isn't exactly good news (unless you're Apple, of course).

And while LeEco is giving everyone a great case study in how not to run an international tech empire (as one does), it's quite a sad story, really: all of these failures result in real-life people losing their jobs, all because of bad managerial decisions by a single person. And while Jia has previously admitted himself that he's made "some mistakes" running the company, this won't make the debt go away.

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7 Comments

1. deewinc

Posts: 455; Member since: Feb 21, 2013

They expanded too fast. They ought to have concentrated on their market in China first, then head in other Asian territories and probably focus on Africa since most of their phones are budget phones. Companies that once did this and are now successful include Huawei (Who remembers the IDEOS?) and ZTE. We now have Tecno following this direction. After all, the US market is hostile especially when you are a small company with little resources.

2. ZombieHunter

Posts: 265; Member since: Oct 13, 2013

Death spiral.. too bad, they had the potential to put out some competition and lower prices. Oh, but that name is stupid too... Excuse me, what is that phone? I don't know... Leeko, LeEeco, Layco, Lico?? Not sure

3. izim1

Posts: 1599; Member since: Feb 04, 2013

"Because i dont know how to pronounce a word, it is a stupid word" Let me guess, U.S American?

4. toukale

Posts: 631; Member since: Jun 10, 2015

This is so rich, its the same guy a few years ago who said that Apple was done and that his company was the top new dog around. How is that working out for him I wonder. I know those guys only make statements like this to bring attention to themselves and their companies to give the media and blogs something to talk about.

5. trojan_horse

Posts: 5868; Member since: May 06, 2016

LeEco is on fire now. Damn.

6. UglyFrank

Posts: 2194; Member since: Jan 23, 2014

I guess this is why Xiaomi didn't rush the expansion

7. ThirdEye

Posts: 33; Member since: Oct 31, 2012

Well, it is Sad. I have a LeEco S3 PRO that I got for 249USD with the last year TG sale and it has been the least problematic phone for the first six months so far.

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