LeEco Did Not Misappropriate Funds, Yidao Yongche and LeEco Jointly Assert
Yicai Global
/SOURCE : Yicai
LeEco Did Not Misappropriate Funds, Yidao Yongche and LeEco Jointly Assert

(Yicai Global) April 18 -- Replying to claims that LeEco diverted USD188 million (CNY1.3 billion) of Yidao Yongche's funds, the two companies issued a joint statement averring that LeEco never appropriated any Yidao Yongche funds, including those from users recharging accounts.

Rather, LeEco has invested nearly CNY4 billion and many other resources to develop Yidao Yongche, the announcement by LeEco Holdings Co. and Beijing Oriental Cloud Information Technology Co. yesterday claimed.

Yidao Yongche is the online ride-hailing platform of Beijing Oriental Cloud Information Technology Co.

The platform was experiencing funding problems, which were directly attributable to the fact that LeEco diverted CNY1.3 billion of the platform's funds, Zhou Hang, founder of Yidao Yongche, earlier claimed.

"As the founder of Yidao Yongche, I, on behalf of the platform's start-up team and all users, strongly appeal to the platform's actual controllers now -- LeEco and Mr. Jia Yueting -- to properly handle the platform's funding problem from the perspective of social responsibility," Zhou said.

LeEco Holdings announced that LeEco Automobile had officially signed an equity investment agreement with Yidao Yongche in October 2015. Upon completion of the transaction, LeEco Automobile received a 70 percent stake in Yidao Yongche and became a controlling shareholder of the platform. Since then, LeEco has appointed He Yi as chairman and Peng Gang as president of Yidao Yongche, while Zhou Hang was gradually shut out from the platform's actual management.

LeEco said in the joint announcement that the "misappropriated CNY1.3 billion" was a part of the CNY1.4 billion joint loans Yidao Yongche received under LeEco Automobile, with the LeEco building LeEco Holdings owns pledged as collateral when Yidao Yongche had difficulty applying for loans on its own in November. At that time, the two sides made clear the funds would be used for the daily operation of LeEco Automobile, including Yidao Yongche, with CNY100 million for the latter, and CNY1.3 billion for the former.

The statement also said that Zhou Hang was not only informed, but also signed the relevant board meeting documents, and Yidao Yongche and LeEco Holdings likewise signed the corresponding agreement. However, Zhou Hang, still the second-largest shareholder and CEO of Yidao Yongche, alleged that LeEco Holdings misused Yidao Yongche's CNY1.3 billion in funds, and maliciously misled the public, saying that Yidao Yongche's funding problem resulted from "LeEco's misappropriation of CNY1.3 billion." His statements have grievously impaired the reputations of both Yidao Yongche and LeEco, and are deemed libelous. Yidao Yongche will convene a board meeting to discuss sanctions against Zhou Hang and to seek potential legal redress.

LeEco Holdings owns Leshi Internet Information and Technology Corp. [SHE:300104].


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Keywords: LEECO , Yidao Yongche , Misappropriation of Funds