Faraday’s future (FF), which frequently brings good news, can be regarded as making Jia Yueting proud. However, in the past two days, Beijing Securities Regulatory Bureau and China Securities Regulatory Commission have successively announced the decisions of fines and banning him from entering the securities market, which have “poured cold water” on him. From LETV to FF, Jia Yueting’s life is full of twists and turns.
If it is still the public’s moral accusation of cashing out and going abroad for not returning at the beginning, then this time the firm punishment for his financial fraud and other acts is the legal sanction against him. In the future, it is still unknown how many consumers are willing to pay for FF’s products.
Foreign triumphs and domestic disappointments
According to the decision, the CSRC decided to ban Jia Yueting from entering the securities market for life because of five illegal facts: financial fraud, failure to disclose related party transactions as required, failure to provide guarantee for LETV holding and other companies, failure to truthfully disclose the performance of loan commitments to listed companies, and fraudulent issuance.
The day before, LETV disclosed the decision on administrative punishment. For the non-public offering and fraudulent offering of LETV in 2016, LETV and Jia Yueting were fined 240 million yuan by Beijing Securities Regulatory Bureau respectively.
In this regard, Jia Yueting did not make a public response.
At the same time, in foreign countries, the preparations for FF and ff91 are in full swing.
At the beginning of this month, FF has formally submitted the S4 listing document to the US Securities Regulatory Commission, which shows that the board of directors of property solutions acquisitions (PSAC), a special purpose acquisition company, highly recognizes FF’s corporate vision, management team, high-end technology and its over 800 patents on smart electric vehicles.
In addition, the document also disclosed a supplier trust shareholding plan of up to US $116 million, which organically integrates the supply chain and FF, breaks the traditional relationship mode between the upstream and downstream of the supply chain in the electric vehicle industry, and clears the previous debt burden, so as to ensure that the financing after FF can be fully used in R & D, production and other positive investment.
Bi Fukang, chief executive of FF, revealed in an interview with foreign media that the company is trying to go public through the way of “special purpose acquisition company (SPAC)”, hoping to raise 1 billion US dollars, and proposed to achieve the sales target of 2400 new energy vehicles by 2022.
From LETV to FF, Jia Yueting, as the founder, has been in the vortex of public opinion.
In terms of business ability, Jia Yueting really has foresight. The steady development of LETV started from film and television resources, and has a good journey. It became the first online video website listed in a shares in China. Later, it began to cross the border. However, this cross-border became uncontrollable. It started to build mobile phones, TV, movies, sports, finance, and even cars one after another. The pace of cross-border is getting bigger and bigger, and it also divided LETV into seven ecosystems.
However, Jia Yueting’s projects are always near but far away from the horizon. Once successful, they will bring huge profits. But at the beginning, they need a lot of money to support. LETV, which has rapidly expanded in a short time, does not have such strength, and eventually the building collapses.
Business belongs to business, and the public’s dispute over Jia Yueting is more about character.
From the punishment of LETV and Jia Yueting, we can learn that in order to be listed, LETV inflated its performance through fictitious business and false collection in the initial issue stage to meet the listing conditions, and continued to be listed. Specifically, LETV fictitious its business with a third party company, and falsely increased its performance by constructing a false capital cycle through the bank account controlled by Jia Yueting, and falsely increased its performance by pretending to collect money in its real business dealings with customers. As the actual controller of LETV, Jia Yueting is bound to be involved.
In addition, when LETV’s development momentum was very good in 2015, Jia Yueting put forward a huge reduction plan, saying that he would reduce 8% of LETV’s shares, and the capital obtained would be lent to the company as working capital without interest, and the loan period would not be less than 60 months. Within three days, Jia Yueting cashed out 2.5 billion yuan; four months later, Jia Yueting transferred 100 million shares at the price of 32 yuan / share, cashing out 3.2 billion yuan. However, Jia Yueting did not lend the reduction funds to the listed companies as promised.
In 2017, after the LETV crisis, Jia Yueting pulled his fellow townsman sun Hongbin into the “dead end” of LETV. However, he turned around and went to the United States, saying that he would “return home next week”. Now he has not returned for nearly four years, leaving 280000 shareholders with “no way to appeal”.
The negative influence is unavoidable
It is undeniable that Jia Yueting is indeed a very ambitious entrepreneur. He looks very shy and introverted. He is not good at speaking in public, but he is full of courage. His cross-border business is never a small business, not limited to a small area or a certain period of time. He either monopolizes the whole industry, or acquires companies internationally, or cooperates with top companies.
However, those who should come will always come. Who would have thought that LETV would be “settled after autumn” after it has basically left the capital stage?
The most important task of FF today is to list on NASDAQ in the United States. The decision of China Securities Regulatory Commission should not have an impact on it. However, for the future development, the strategy of FF’s two markets in China and the United States will not necessarily blossom.
Beijing Business Daily reporter also interviewed FF China, as of press, the other side did not give a reply.
Major general Jiading, an industry and economic observer, pointed out that this punishment will still have some impact on FF. After all, LETV in those years, FF today and Jia Yueting are core managers. For FF domestic business companies, it is estimated that they will try their best to clarify the relationship with Jia Yueting and not let Jia Yueting hold management positions and shares. “At present, unless Jia Yueting withdraws from FF completely, FF will be listed in China only if FF succeeds at home and abroad and Jia Yueting’s debts and fines can be fundamentally solved.”
Hong Shibin, an industry observer, believes that from a factual point of view, Jia Yueting has made some legal separation from FF. By applying for personal bankruptcy, he has transferred his personal assets to creditors through creditor trust, making creditors become shareholders of FF and stepping down as CEO. However, from the connection between the two, the public knows that FF is related to LETV and Jia Yueting This is bound to have a reputation impact on FF’s brand.
Beijing Business Daily reporter Shi Feiyue
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