Western Securities Sues Leshi for Unpaid Loans Totaling USD158 Million
Wang Juanjuan
/SOURCE : Yicai
Western Securities Sues Leshi for Unpaid Loans Totaling USD158 Million

(Yicai Global) Feb. 28 -- Chinese securities broker Western Securities Co. has filed a lawsuit against Jia Yueting, the disgraced founder of Leshi Internet Information and Technology Corp., as well as three other company figures, over unpaid loans worth CNY1.02 billion (USD158 million).

The Xi'an-based firm has accrued CNY439 million in bad debt provisions for funds lent to Leshi Internet, and accuses Jia, his brother Jia Yuemin, and two former company executives of failing to buy back shares used as collateral, it said in a statement.

The bad debts account for 60 percent of Western Securities annual net profit for last year, based on its 2017 profit outlook of around CNY736 million.

The brokerage alleges it its funds lent break down as follows:

CNY473.5 million to Jia Yueting

CNY296 million to Jia Yuemin

CNY240 million to Liu Hong

CNY9 million to Yang Lijie.

Leshi Internet and its array of affiliates have been struggling to make ends meet since last year. On Jan. 31, the Beijing-based company forecast a USD1.8 billion loss for 2017, the biggest for a private A-share company in over a decade. Founder Jia resigned as the firm's chairman in July and headed to the US, leaving Sun Hongbin, chairman of major property developer and key investor Sunac China Holdings Ltd., to take the reins.

Jia said early last month that he was entrusting his wife and brother with handling, as he termed it, the "debt crisis" at Leshi Internet. It was his first public statement after the Beijing branch of the securities regulator ordered him back to China before Dec. 31. He did not return.

 

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Keywords: Leshi , Share Pledge , Western Securities , Margin Call , Burned Account