LeTV also orchestrated a controversial and confusing public relations move. On the afternoon of January 2, Jia Yueting responded to the Beijing Securities Regulatory Bureau by stating that “due to the end†and claimed he had fully communicated with LeTV to reach a debt settlement agreement. However, in the evening, LeTV officially announced that no enforceable or comprehensive debt solution had been reached yet.
The truth behind the claims remains unclear. A senior LeTV executive, speaking to a reporter from the Securities Times e-Corporation, stated: “Jia Yueting’s strategy is to mix facts with some lies. The detailed parts are not false, but the misleading parts are easy for the public to believe.†This statement raised questions about whether Jia was being honest or simply engaging in damage control.
Who will ultimately be held accountable for the company’s financial troubles? After Jia Yueting returned to China, his nickname list would have to include another label — “responsible for the end.â€
At midday on January 2, Jia Yueting issued a response letter on the official WeChat account of the Beijing Securities Regulatory Bureau, addressing the regulator's demand that he return to China to fulfill his duties. He claimed to have fully communicated with LeTV.com to form a debt settlement intention. Additionally, he sent his brother, Jia Yuemin, to meet with the regulatory authority on December 29, 2017, to personally report and discuss the matter.
When asked by the regulator to take responsibility for the company’s issues and protect investor interests, Jia skillfully reframed the situation as a “debt issue between non-listed and listed companies,†avoiding any direct mention of his personal obligations. He emphasized that while shareholders of non-listed companies have limited liability, the debts owed by those entities should not fall on individuals. Nevertheless, he claimed to be voluntarily taking responsibility and committed to resolving all debt problems.
According to the LeTV executives, Jia’s statements were somewhat transparent, but if not entirely truthful, they could be seen as a PR maneuver aimed at deflecting scrutiny from regulators.
Jia further outlined his plan for resolving the debt issue, stating that he actively engaged with the listed company, expressed clear willingness to repay, and worked on preliminary plans involving asset sales. He mentioned that both parties had formed an intent to resolve the debt through asset repossession, which would help settle the arrears of the listed company and fulfill shareholder responsibilities effectively.
However, LeTV clarified that no enforceable, substantive written agreement had been reached yet.
Jia also explained that he was too busy to handle everything himself and had delegated the task to his wife and brother to manage asset disposals and pay off debts. He said, “To better solve the listed company’s debt problem, I have authorized Gan Wei and Jia Yuemin to represent me in exercising shareholder rights and fulfilling responsibilities, including asset disposal. They are solely responsible for these actions.â€
In the closing part of his response, Jia reiterated: “We solemnly promise again — I will take full responsibility for the debt issue.â€
LeTV confirmed that it would continue efforts to resolve the debt issues between Jia Yueting and related non-listed entities, with follow-up updates to be released in future announcements.
Where is the money going?
While Jia Yueting declared his commitment to “take responsibility until the end,†his wife, Jia Weiting, also spoke out in support, claiming that Jia’s stock holdings and pledged shares were used for business and investment, not for personal or family use. She added that their personal finances were heavily in debt. However, this solidarity did not gain approval from LeTV.
Jia Yueting had just issued a response letter, and Gan Wei took to Weibo to detail the funds involved: “Jia Yueting has reduced his stock holdings (a total of $9.7 billion in reductions, with tax payments of 2 billion yuan), pledged stock loans (RMB 6.9 billion in outstanding balances, with interest since 2014 totaling RMB 1.74 billion), equity investments of approximately RMB 1.6 billion, and operating investments of around RMB 15.2 billion. These funds are not used for personal or family purposes, but rather to guarantee over RMB 10 billion for the company. Personal and family assets are frozen and heavily indebted. The debt team will do everything possible to resolve the debt issue.â€
Despite this, the same LeTV executives questioned the transparency of these claims, saying, “There is doubt about how the money is being used. Please prove where the funds are going and what you intend to do.â€
LeTV’s announcement also highlighted the current financial crisis facing the company. It stated that numerous non-listed subsidiaries owe large amounts to the listed company, leading to significant unpaid bills to upstream suppliers, widespread defaults, legal disputes, and severe cash flow issues. This has put the company’s credit system and daily operations at risk.
A reporter analyzed the related-party transactions between LeTV and its subsidiaries and found that the volume of transactions surged dramatically over four years. In 2013, LeTV’s sales to related parties amounted to 11.15 million yuan, and purchases from related parties totaled 20.65 million yuan. By 2016, the figures soared to 12.868 billion yuan in sales and 7.48 billion yuan in purchases. Over four years, sales to related parties increased by approximately 1,153 times year-on-year, while purchases from related parties rose by about 361 times year-on-year.
In addition to the above disclosures, LeTV revealed more critical information. First, Leshi Mall plans to inject RMB 92.9 million into the listed company through a debt-issued method. Second, New LeTV Zhijia (formerly LeTV Zhixin) has decided on a capital increase plan, aiming to raise RMB 3 billion based on a valuation exceeding RMB 12 billion. Current creditors of Xin Le Zhi Zhijia have invested RMB 1.5 billion in their debts.
LeTV stated that these two transactions aim to optimize its new debt structure.
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