Letv 'not involved' in ChiNext probe of IPO fraud: source

Updated 2017-11-02 09:03:02 Global Times

A recent probe into former members of the IPO examination panel of the ChiNext stock market, a NASDAQ-style board, has nothing to do with Beijing-based Leshi Information Technology Co (Letv), domestic news site thepaper.cn reported Wednesday, citing a person close to the company.

Media reports have claimed that the IPO of Letv, an arm of LeEco, was the subject of an investigation involving several former members of the panel.

"The matter isn't connected to Letv, and I did not hear any departments asking the company or executives about the matter," the unidentified person was quoted as saying in the report.

The person said that if a company is under investigation, inquiries should be conducted into its sponsor institutions, accountants and the people who participated in the examination. Since no one at Letv has been questioned or investigated, the probe into the members of the panel has nothing to do with the company, the report quoted the person as saying.

Several members of the panel have been arrested due to financial fraud in Letv's IPO, news site caijing.com.cn reported Tuesday.

Letv was listed on the ChiNext in August 2010. The shares, which had an IPO price of 29.2 yuan (.4), surged to a peak of 179.03 yuan on May 15, 2015, media reports said. Trading in Letv was suspended in April 2017 and its current shares had tumbled to 15.33 yuan, and it never resumed.

Letv's revenue decreased 91.8 percent year-on-year to 554 million yuan in the third quarter of 2017, according to the company's latest earnings report. Cumulative losses reached 1.65 billion yuan in the first nine months.

Since Jia Yueting, debt-laden LeEco's founder, resigned as chairman of Letv in July, other members of the management team reportedly followed. Jia has left China and is staying in the US.

On Friday, five other Letv executives, including CEO Liang Jun, resigned citing "personal reasons," the company said.

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