LeEco's Coolpad says lawsuit filed against unit over loan due next month
LeEco is grappling with the fallout of expanding too fast, has been under growing pressure from its creditors and business partners.
Chinese smartphone maker Coolpad Group, part of the cash-strapped LeEco technology conglomerate, said on Thursday a bank has sued a subsidiary, demanding early repayment of an 80 million yuan ($11.9 million) loan due Aug. 15.
LeEco, a smart cars to online content conglomerate that is grappling with the fallout of expanding too fast, has been under growing pressure from its creditors and business partners. This month a court in Shanghai ordered a freeze on some of its assets over late payments to a bank.
Coolpad said in a statement that the unit, Yulong Computer Communication Technology, had been sued by a Ping An Bank branch which argues that it can call in the loan as the financial situation of the guarantor, another Coolpad unit, had deteriorated.
Coolpad added that it has consulted lawyers regarding the case and was gathering evidence to defend itself in court.
Coolpad has repeatedly delayed reporting its earnings, which were due to be reported in March, because of audit issues since March. Its shares have been suspended since March 30.
LeEco founder Jia Yueting this month resigned as chairman of the group's main listed unit, Leshi Internet Information & Technology Corp Beijing, after making a public plea for patience.