Further blow to LeEco as smartphone unit Coolpad hit with lawsuit to repay US$11.8m loan

Legal action comes to light a week after cash-strapped company was branded a ‘Ponzi scheme’ in a post made on popular social media WeChat by Tencent Holdings co-founder Zeng Liqing

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Models display Coolpad smartphones during the Tianyi Mobile Fair & Mobile Internet Forum in Nanjing in June 2014. Photo: Imaginechina

Published: 9:30pm, 27 Jul 2017Updated: 12:09am, 28 Jul 2017

Coolpad Group, the struggling smartphone supplier controlled by cash-strapped LeEco, has revealed that one of its subsidiaries was recently slapped with a civil complaint by Ping An Bank to repay a loan worth 80 million yuan (US$11.8 million).

The case lodged in the Shenzhen Intermediate People’s Court marks the latest financial predicament to hit the desk of troubled LeEco founder and chairman Jia Yueting, who also serves as chairman of Coolpad.

The Shenzhen branch of Ping An Bank, a unit of Ping An Insurance (Group) Company, said it has the right to recover the debt owed by Coolpad subsidiary Yulong Computer Communication Technology after it found that the financial situation of another subsidiary, which acted as one of the loan guarantors, has deteriorated.

Ping An Bank has lodged a civil complaint against LeEco unit Coolpad to repay a loan worth US$11.8 million. Photo: David Wong

It alleged such a situation “will seriously affect the borrower’s business and performance”.

Jia said in a regulatory filing on Thursday that the loan contract, which has a term of up to August 15 this year, has not yet expired.

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