Leshi Denies Existence of Substantive Written Agreement With Jia Yueting Over Debt Issue

Leshi Denies Existence of Substantive Written Agreement With Jia Yueting Over Debt Issue

Xu Wei

Date: Wed, 01/03/2018 - 20:58 / source:Yicai
Leshi Denies Existence of Substantive Written Agreement With Jia Yueting Over Debt Issue
Leshi Denies Existence of Substantive Written Agreement With Jia Yueting Over Debt Issue

(Yicai Global) Jan. 3 -- Leshi Internet Information & Technology Corp. has been continuously pushing for a settlement of its debt problems with the non-listed systems to solve its financial problems and enable the company to resume normal operations, it said in a statement yesterday. However, how the company will settle its debt problem with its founder Jia Yueting remains to be seen as both sides make conflicting statements.

The two sides have yet to form a practical substantive and written agreement to deal with the overall debt issue. Leshi will continue to vigorously seek a substantive settlement of the debts between Jia Yueting and related parties, and any parties concerned should only take into account official company statements, it emphasized.

Earlier on the same day, Jia Yueting, former chairman of Leshi, claimed on his WeChat group account that he has actively discussed and communicated with the company and displayed a clear intention of repayment including putting forward a preliminary plan. Both parties formed an intention of debts settlement under which he will settle the debts through obtaining funds by selling assets or offset debts with assets to settle the arrears of Leshi and effectively fulfill the responsibilities as the shareholder, he added.

The large debts related non-listed companies owe to Leshi have caused the company to withhold substantial payments due to upstream suppliers, per the statement, adding this led to plenty of debt default and litigation acts, risking its credit system and causing extremely tight cash flow, thus making the daily operations go wrong.

According to last year's semi-annual report, as of June 30, 2017, the book value of Leshi’s accounts receivable was USD1.4 billion, of which accounts receivable balance of related parties was CNY5.2 billion (USD800 million), accounting for more than half of the total accounts receivable.

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Keywords: Leshi, Jia Yueting, Cash, Trouble, debt, PAYMENT