(Yicai Global) April 21 -- The CNY1.4 billion (USD203 million) loan allegedly misappropriated by Leshi Holding Beijing Co.’s subsidiary, Yidao Yongche, is from a third party investment firm and could cost them big, said the ride-hailing firm’s founder, Zhou Hang, who resigned two weeks ago.
Zhejiang Zhongtai Specialty Financing Enterprise Management Ltd., which isn’t authorized to issue loans, supplied the funds to Yidao, using the Bank of Nanjing as an intermediary. Leshi’s LeTV Mansion was put forward as collateral for the deal.
Insiders said the loan was for two years at an annual interest rate of 8 percent, costing a total of CNY224 million.
Zhongtai specializes in high interest rate loans, several people familiar with the firm said, adding that it wouldn’t lend at such a low interest rate. They suspect that a financial consulting cost would have been paid in advance, and in line with the company’s usual standards, the annualized interest rate would be around 15 percent. That would hike the cost of the loan to CNY420 million over two years.
Reports claim that as well as using LeTV Mansion as collateral, LeEco pledged equity in Yidao to Zhongtai, which is wholly owned by Beijing Zhongtai Specialty Financing Enterprise Management Ltd.
Yidao is in financial trouble, Hang said on April 17, citing the embezzlement as the root cause.
The misappropriation took place in November 2016, Leshi said. The funds were supposed to be used for daily operating cash flow at LeSEE, Leshi’s self-driving vehicle unit, and Yidao, a direct subsidiary of the auto division. Some CNY1.3 billion of the loan was used at LeSEE, with Yidao picking up just CNY100 million.