LeEco is now being sued by an ad agency in its homeland of China, for failing to pay advertising fees. Jinyuan Technology says that four LeEco affiliate companies have failed to pay their fees. These fees amount to over 60 million Yuan – about $8.8 million USD. This is according to a regulatory filing by its parent company, MIG Unmbi Technology, that was sent to the Shenzhen Stock Exchange. More importantly, three of the five cases here, have been accepted by the People's Court of Chaoyang District in Beijing. The statement released by the People's Court states that LeSports, Leshi Holding and Leshi E-Commerce needs to make an immediate payment. There's also a penalty interest of 0.05% per day. Which is going to make things pretty pricey for LeEco, the longer they wait.
This is just the latest in the sage of LeEco and its financial struggles. Last year, LeEco noted that its were in a cash crunch, then the company was able to raise a significant amount of money to keep things running day-to-day. Now just a few weeks ago, LeEco announced that it was laying off around 325 employees in the US, which is about 70% of their US team. The company also announced that they would be moving their niche market to target Chinese-speaking households in the US.
LeEco is a company that seemingly came out of nowhere, but it did have big success in China. In fact, it is often referred to as the "Netflix of China". This is because the company does video streaming, like Netflix, but it also has its hands in a ton of other areas. It does also sell smartphones and TV's, as it wants to sell you products for you to watch more of their content. It launched in the US late last year with a slew of Android TV sets, as well as the LeEco Le Pro3 and Le S3. Neither of which were runaway hits in the US, but it did garner quite a bit of attention for its low prices and pretty stellar specs. LeEco seems to have quite a bit of financial trouble right now, and it appears to only be getting worse.