Will Chinese tech tycoon return to deal with company debt?

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Jia Yueting, a Chinese Internet tycoon, has been ordered by the China Securities Regulatory Commission (CSRC) to deal with the mounting debt of LeEco, the company he founded.

The Chinese market watchdog has given him a deadline of Dec. 31 to handle the situation.

In the notice, the CSRC stated that it had tried several times to get in touch with Jia to no avail. He may currently be in the US.

It is still unclear whether Jia will comply with the order and deal with his company’s debt.

However, due to the limits of its jurisdiction, CSRC can neither summon Jia by warrant, nor dole out any punishment if Jia disobeys the order.

In recent weeks, Jia Yueting’s personal troubles have escalated, starting at the beginning of this month when he was put on the blacklist of debt and credit defaulters by the court after publicly alleging that he was not able to pay the debt.

Being on the list means that he will be blocked from making big purchases such as first class flights and high-speed trains.

At his peak, Jia was among the most flamboyant figures in China, making his fortune when Letv became the first streaming video company in the country to go public. His ambitions to expand from the Internet into diverse industries to take on global giants such as Apple, Netflix and Tesla resulted in an expansion that amassed significant debt.

It has been reported that LeEco owes the brokerage Ping An Security 479 million yuan (about $73 million), including interests and fees.

In July 2017, Jia stepped down from his position as the chairman of Leshi Information Internet and Technology, the main listed unit of LeEco, to focus on electric cars. Meanwhile, he promised to repay the company debt.

However, in a recent letter released to the public, Jia said that “the development was too quick. However, our resources and funds limited the company’s over-stretched global expansion.”

Currently, Jia appears to be in the US, according to his latest post on Weibo, which includes a Christmas message and a picture at Faraday Future, the electric car company Jia invested in to help LeEco get through financial woes.

Screenshot of Jia's Weibo