LeEco called a ‘Ponzi scheme’ by Tencent co-founder – CNET

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LeEco’s founder and CEO, Jia Yueting, had ambitions of expanding into the US, but the beleaguered company is now up to its eyeballs in debt.

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LeEco has fallen on some tough times, slashing most of its US workforce, but Tencent isn’t particularly sympathetic.

Zeng Liqing, co-founder of Chinese internet giant Tencent, labelled LeEco a “Ponzi scheme,” reports the South China Morning Post.

“If you’re not able to spot an apparent Ponzi scheme [like LeEco], you’re neither worthy of working in the investment industry,” Zeng said in a lengthy post on Chinese social media platform WeChat, “nor suitable for entrepreneurship.”

LeEco had grand ambitions of a US expansion, hoping to sell a hodgepodge of items from premium gadgets such as TVs and phones to self-driving cars when its founder and CEO, Jia Yueting went onstage to talk about his plans last October. Things went downhill from there, with the company facing financial problems which eventually led to 325 employees being laid off and its retreat from a deal to buy TV maker Vizio. Jia resigned from his role in July.

While the rant was “liked” by Tencent’s chairman Pony Ma, and Chinese angel investor Xu Xiaoping, others came to the defense of Jia, and advised people against drawing conclusions.

“Jia’s still got some good cards in his hand, and he’s still young. We should be more tolerant of failure, and support entrepreneurial spirit like Jia’s,” said Sun Hongbin, the chairman of property firm Sunac Holdings, who recently loaned 15 billion yuan to the debt-ridden company. Sun is expected to replace Jia as the CEO of LeEco’s video streaming arm, Leshi, although he expressed no interest in the position.

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