Jia Yueting CEO and co-founder Faraday Future has a notorious history of money. His reputation and luck were partly based on his vision when he woke up in China, but in 2004 he founded a streaming company called LeTV long before Netflix left the DVD. It is also built on financial liabilities. For years, he followed a relatively simple formula. He found success with LeTV and succeeded in trying new things under LeEco's umbrella. Then I was able to do more by borrowing against this venture. He left the race when the Chinese economy was booming and a large shadow banking system emerged that facilitated the borrowing.
Over the next ten years, Jia finds herself living in a mansion. Rancho Palos Verdes, California One of the mansions actually owned by the coastal cliffs. It sounds like a dream life, but Jia has no choice. He lives here in his exile last summer. Because the way he has accumulated in China is finally catching up with him. It seemed particularly true this week as the LeTV affiliates continued their path of bankruptcy, and a new trial of every place in the Caribbean raised potential new threats to Faraday Future's status as a controlling figure. .
Jia left China last summer when the walls began to close at LeTV and LeEco. With billions of dollars in borrowed money he built a big business around core streaming services, including ambitious products ranging from cell phones, movie studios and electric cars. It was unsustained, unsurprisingly, of course. Failure to expand to the United States, disgust with the attempted takeover of TV maker Vizio, and excessive expansion of China demanded money from creditors.
When Jia did not pay, the land quickly changed. Some creditors camped in one of the LeEco offices. Sunac China Holdings, China's leading real estate developer, eventually tried to escape from skids by paying $ 2.2 billion to LeEco for a portion of its debt. Jia has stepped down as CEO of its parent company, LeTV's major listed division. The court froze almost $ 200 million worth of assets. He promised to get a loan to fuel other venture companies. Basically, all the people who started working for LeEco's new American arm were disbanded.
Jia quickly moved to the United States to take over operations in Faraday. He began with the $ 500 million money he generated in China. He wrote at least $ 21 million in housing and property in California, but was listed on the national debtors list. At the end of 2017, the government demanded to return to China to pay off the debt during the shadow banking system crackdown. He owes money to Tang, but instead he sends his wife and brother to solve the problem.
Since then the situation has continued to expand. The Chinese government continued to pressurize Chiropractors throughout 2018, with wives and sisters added to the list of missing persons. All three sanctions were taken, such as travel and hotel reservations.
On the other hand, Sunac gradually tried to recoup some of the billions of dollars lost, and gradually included the increasingly broader LeEco enterprise structure. To save the company, LeTV's publicly traded company reported a loss of about $ 2 billion in 2017 and another major loss in 2018, indicating that the shares could be listed or brokered at SungenExchange. The court further froze Jia's LeTV stock. The US office opened by LeEco is now empty and started to sell. Jia recently sued Vizio for a lax acquisition, but the amount paid was not disclosed.
At least three Chinese companies that Jia still pays for through LeEco and LeTV accused him in US courts, accusing him of creating "hundreds" of shell companies to escape. His debt problem.
Two new developments this week have increased the heat. In a press release from the Shenzen Stock Exchange, LeTV announced that it had asked Jia to link some of the company's remaining debt to the assets and / or shares of Faraday Future.
A similar but potentially more severe blow may have been handled on Friday. Yiaai Global Yicai Global said another company that claimed that Jia still owes money took action against him at the East Caribbean Supreme Court (ECSC). While the place may sound random, it keeps 33% of Taoyun Capital – FIA (Faraday Future) stake. Due to the Byzantine corporate structure built around Jia's Faraday Futur, he is a technology leader and holds a controlling stake in FF Virgin Holding (Peak Holding), a British Virgin Islands entity located on other entities related to all other Shell companies, LLCs and EVs. We are doing. The ECSC has jurisdiction over the UK spiritual rights.
Yicai reports that the ECSC has frozen 33% of Jia's stake and has frozen its stake until legal action is taken. And Evergrande, a Chinese real estate giant who rescued Faraday Futura at the end of 2017, owns 45% of EVs, but Jia's stake has more voting rights. In a few months 'game against investors, only 33 percent of Faraday Futur' s shares are keeping him out of control. Two new vectors are under attack. Both are direct consequences of habit of over borrowing.
Jia has an undeniable ability to persuade others to give money. CEO of Powerpoint, "but he now finds himself in an unknown sea because Jia is not sure who or where he can make money to make money. China has reduced its overseas investment and has been using axes for its lending system, which has been booming for years. Even if Jia can reverse her status as an "untrustworthy" debtor in her homeland, the fire used to promote her to a billionaire status is turning into fire.
According to property records in the United States, Jia has already borrowed – many times against the mansion he owns. The only obvious asset of his Faraday Future is scary. The start-ups have recently laid off and promoted hundreds of employees as a result of continued competition with Evergrande. If the company goes down or if Everglade takes control, Jia will be in the proverb of his Oceanside family. He spent a few years till this point, once he built the New York Times which he called "The Debt Bomb"  . Now that we know how big the explosion is.