Founder and former Chief Executive Officer of LeEco has been blacklisted as a debt defaulter in his home country of China, Reuters reported Wednesday, citing a government notice. Jia Yueting was sanctioned after not settling his debt to Ping An Securities Group amounting to the equivalent of $71 million after a court order compelled him to do so. The development itself occurred on Monday and marks yet another problem in the long string of issues attached to the Chinese original equipment manufacturer that's still enduring the largest cash crunch in its history and keeps industry analysts guessing over whether it will eventually go under.
Mr. Yueting's blacklisting isn't expected to amount to any palpable consequences for LeEco, albeit it may prevent him personally from enjoying various luxuries such as premium hotels, golf courses, and resorts, as well as high-end flights and other such means of transportation. The debt to Ping An Securities Group is just one of several that LeEco failed to pay in time over the course of this year, with the company's assets still being partially frozen by the courts in the Far Eastern country. According to most industry watchers, the current state of affairs can primarily be attributed to LeEco's general business strategy that pushed for aggressive global and technological expansion at all costs, taking on unsustainable debt in the process of doing so. While LeEco's smartphones and a Netflix-like on-demand video platform have been lucrative endeavors for the company, its decision to commit significant resources to moonshot projects like self-driving cars ended up overleveraging its business to the point that it was unable to pay off its debts and forced to not just dropped major acquisitions like the VIZIO purchase but also sell off a number of its assets.
U.S. electric car startup Faraday Future that's effectively controlled by Mr. Yueting also had its operations essentially halted after the Chinese billionaire ran into financial troubles and its future remains unclear. LeEco's prospects are equally hard to predict as courts continue sanctioning the firm's inability to pay its creditors what it owes, especially since a takeover that would save it doesn't appear to be a realistic scenario due to the current state of its business.