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Ad agency sues LeEco for unpaid bills

chinadaily.com.cn | Updated: 2017-06-08 09:28

Ad agency sues LeEco for unpaid bills

LeEco's Le Pro3 phone is on display during a press event in San Francisco, US Oct 19, 2016. [Photo/Agencies]

A Chinese advertising agency has sued tech giant LeEco for missing payments, casting more doubt on the company's financial health.

Jinyuan Technology is accusing four LeEco affiliate companies of failing to pay advertisement fees of more than 60 million yuan ($8.8 million), a regulatory filing by its parent company MIG Unmobi Technology to Shenzhen Stock Exchange shows.

Three of the five cases have been accepted by the People's Court of Chaoyang District in Beijing. According to the statement, the company demands LeSports, Leshi Holding and Leshi E-Commerce make immediate payment, with a penalty interest of 0.05 percent per day.

Jinyuan Technology hasn't received notice of acceptance from courts on the other two cases, seeking immediate payment of 13.8 million yuan from Le.com, according to the statement.

The payment has been allegedly delayed since the advertising campaigns finished at the end of last year, coinciding with LeEco founder Jia Yueting's first admission that the company was struggling with a cash crunch due to breakneck expansion.

Starting as a video streaming platform, the tech giant has been pushing to become a combination of Netflix, Apple and Tesla by manufacturing smartphones and TV tablets, producing original content and developing electric cars.

Last month, Jia stepped down as the CEO of the group's main listed subsidiary Leshi Internet Information & Technology Corp, while remaining chair of LeEco.

The change of role came four months after the company received an injection of funds worth 15.04 billion yuan from property developer Sunac China Holdings.

LeEco last month announced it would slash 325 jobs in the United States, around 70 percent of its payroll in the country, as it scaled back operations.

Tan Xinyu contributed to this story

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