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Chinese tech executive accuses LeEco of misappropriating millions

Chinese car-hailing platform Yidao Yongche is rumored to have fallen into financial distress after its founder and former CEO claimed that 1.3 billion RMB was appropriated from the company by its top stakeholder, LeEco.

“As far as I know, Yidao is indeed in financial troubles and the most direct cause is LeEco’s misappropriation of 1.3 billion yuan in funds owned by Yidao,” Zhou Hang, who founded Yidao in 2010, said in a statement on Monday.

A joint statement from LeEco and Yidao on Monday refuted Zhou’s allegation, stating that LeEco offered one of its buildings as collateral to help Yidao borrow 1.4 billion yuan (US$203 million), of which 1.3 billion yuan was for LeEco’s automobile development and the remaining 100 million yuan was to be used for Yidao’s business operations.

The statement said Zhou, as chief executive and second-largest shareholder of Yidao, was well aware of the details of the loan deal. It added that he has made false statements that have damaged the “reputation” of Yidao and LeEco.

Zhou's assertion aroused a great deal of public attention, and many drivers went to the company's headquarters to withdraw their money from the platform. According to Caixin.com, several drivers haven't been able to withdraw money earned on the platform since January. The amount of money various drivers are owed ranges from 4,000 RMB to more than 10,000 RMB.

Zhou said these incidents were not simple debt disputes, but rather could lead to wider protests by drivers and users and even affect social stability.

In early April, reports suggested Zhou had left Yidao to join Shunwei Capital as a partner. Shunwei was co-founded by Lei Jun, the chief executive of smartphone maker Xiaomi.

LeEco became the largest stakeholder of Yidao Yongche in 2015, when it purchased 70 percent of the car-hailing platform's stock. Zhou Hang said he stepped away from Yidao Yongche after LeEco took over the company he founded, although he retained the title of CEO.


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