Leshi fined for IPO fraud

Chinese video-streaming service provider Leshi Internet Information & Technology Corp has been fined 240 million yuan ($35 million) following an investigation into suspected illegal disclosure of information and fraud in its initial public offering.

According to a filing from the company on Monday night, the China Securities Regulatory Commission has completed the investigation into Leshi's IPO in the A-share market, and ordered the company to make corrections, giving a warning and imposing a fine of 600,000 yuan. The authority also imposed a fine of 5 percent on the funds raised in its IPO, which is equivalent to 240 million yuan.

Leshi was delisted from the Chinese stock market on July 20 after three consecutive years of losses and suspension of trading for a year. Its share price registered at 0.18 yuan on that day and total market value was recorded at 718 million yuan, a drastic plunge from its 170 billion yuan peak valuation in 2015.

The company debuted on ChiNext, a technology board for Chinese start-ups, on the Shenzhen Stock Exchange in 2010.

Founded in 2007 by Jia Yueting, the billionaire chairman of Chinese technology group LeEco, Leshi was once seen as a potential Chinese technology titan, but was involved in lawsuits due to debt problems since 2017.

Leshi's parent firm LeEco started as a video-streaming service provider, akin to Netflix Inc, but grew rapidly into a tech heavyweight with a presence in smartphones, TVs, cloud computing, sports and electric cars. But it ran into a cash crunch in late 2016 after expanding too fast. Jia departed for the United States in July 2017 after running up huge debts and resigned from all his positions at Leshi.