(Yicai Global) May 12 -- The founder of Levdeo has exited China, according to a news report published a few days after the country's once premier maker of mini electric cars by sales filed for bankruptcy reorganization.

Li Guoxin and his family are now in Canada, The Paper reported today. Weifang-based Levdeo filed for bankruptcy reorganization with a court in Shandong province on May 10, according to business information platform Tianyancha.

Li had a close relationship with Wang Shuhua, former secretary of the Communist Party of China's committee for Changle county in Weifang and the city’s former executive vice mayor, The Paper quoted a businessman from Weifang familiar with Li's wanderings as saying. When Wang was investigated for serious violations of discipline and law in September 2020, Li was taken in to assist.

“Afterwards, Li hired a professionals to manage Levdeo and settled in Canada for a long time,” the businessman noted.

“Li has no real friends in Weifang's business circle,” a senior manager at a large state-owned enterprise told The Paper.

On Jan. 14, Li accused the secretary of the CPC’s committee for Changle of having forced Levdeo to report CNY6.7 billion (USD964 million) in sales last year to make the local economy's report card look better. The actual figure was CNY2 billion, Li said.

Levdeo failed to receive funds worth CNY3.2 billion from investors, so it had to shut down because the local government did not renew its loan and was unwilling to help the company extend its mortgage, Li added.

The Shandong provincial government launched an investigation into the matter, but has not yet disclosed any results.

Levdeo is a fraud, dealers in Jiangsu province wrote in an open letter to the investigation team. A dealer from Liaoning province said he ordered 10 EVs from Levdeo but only received seven, adding that he never got the refund for the three undelivered cars.

Levdeo had been involved in 190 lawsuits totalling CNY206.2 million (USD29.7 million) as of May 10.

Founded in 2008, Levdeo topped China's mini-sized EV sales rankings between 2016 and 2018. After the country tightened supervision on such vehicles in 2019, Levdeo acquired Yema Automobile for CNY1.5 billion to secure manufacturing licenses for new energy vehicles, fossil fuel-powered passenger cars, and buses.

Editor: Futura Costaglione