Asian Tech Press (Jan 18) -- Le.com, or LeTV, an Internet company in which California-based EV company Faraday Future's Chinese founder Jia Yueting is the second-largest shareholder, was recently sued by 2,000 investors for more than 4.5 billion yuan ($720 million).

The news that Le.com was sued by investors was disclosed by a China-based securities company, Shanxi Securities Co. Ltd., in an announcement issued on Monday evening.

The announcement said that on January 13, Zhongde Securities Co. Ltd, a subsidiary of Shanxi Securities, had received a civil indictment served by the Beijing Financial Court for a dispute over liability for securities misrepresentation.

The plaintiffs were two thousand investors, including Shanghai Junying Asset Management Co. Ltd., who demanded that LeTV's parent company, Leshi Internet Information and Technology Corp., compensate for investment losses totaling 4,571,357,198 yuan ($720.68 million) caused by its misrepresentation.

Among them, three securities companies including Zhongde Securities and three accounting firms were sued for failing to exercise due diligence and to detect Le.com's financial fraud, and were required to bear joint and several liability.

And in April 2021, the China Securities Regulatory Commission (CSRC), China's top securities regulator, found that Le.com had five violations of law. At that time, the company was fined 240 million yuan ($37.84 million), and Jia Yueting, as the de facto controller of Le.com, was fined 241 million yuan ($37.99 million). Together with fines imposed on other LeTV executives, the total amount of administrative penalties reached 483.1 million yuan ($76.16 million).

Now on top of this administrative penalty, Le.com's investors have launched a class lawsuit requiring it to pay them civil damages.

Currently among the shareholders of LeTV's parent company, Jia has 28.57% of shares and he is the second-largest shareholder of the company.

(US$1 = 6.3431 yuan)