LeEco Employees Who Are Owed Unpaid Wages Apply for Labor Arbitration
Xu Wei
/SOURCE : Yicai
LeEco Employees Who Are Owed Unpaid Wages Apply for Labor Arbitration

(Yicai Global) July 14 -- LeEco employees, who are owed unpaid wages, have applied to the Labor Dispute Arbitration Committee of Chaoyang District in Beijing, to recover their back pay and demand labor arbitration. Leshi Zhixin Electronic Technology (Tianjin) Co., Leshi Holdings, Leshi Mobile Intelligent Information Technology (Beijing) Co. and LeEco's e-commerce arm are all implicated in the case.

LeEco's employees have submitted materials to the arbitration committee, the Securities Daily reported today, citing the committee. The arbitration committee will treat different components of unpaid salaries by LeEco's separately, lawyers said. LeEco may be subject to legal liability if the committee rules that it has withheld wages.

LeEco has been withholding wages, recent media reports suggested. Employees of Leshi Holdings and LeEco's non-listed arms such as LeSports and Leshi Mobile were told on July 10, their pay day, that wage payments will be postponed. Leshi Holdings claimed that China Merchants Bank Co. [SHA:600036] has frozen LeEco's assets worth CNY1.2 billion (USD177 million), leading to cash shortage among LeEco's non-listed arms, so the company decided to postpone wage payments in July to next month.

However, unlike Leshi Holdings, both Leshi Internet Information and Technology Corp. [SHE:300104] and Leshi Zhixin have paid their employees' salaries. "As LeEco's new management team stabilizes, the company may take substantive measures to deal with historical issues," an employee of Leshi Internet told Yicai Global yesterday.

Less than one week after LeEco founder Jia Yueting resigned from all his positions at Leshi Internet, Sunac China Holdings Ltd. [HK:1918] chairman Sun Hongbin has speeded up overhaul of LeEco.  "All of our initiatives aim to help stabilize the market and restore confidence. Sunac's resources can make LeEco's listed company more secure so that it can have a better future," he said. "Sunac may inject more money into LeEco once it stabilizes," said a person close to LeEco.

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Keywords: MSCI , LETV , Leshi , FINANCING , Unpaid , Salary , Wage , Arbitration , Debt-Ridden , Troubled