While he’s struggling to keep electric car startup Faraday Future afloat, Chinese tech entrepreneur Jia Yueting is dealing with a new blemish: the Chinese government has placed him on an “official online blacklist of credit defaulters,” according to the New York Times, meaning he could be blocked from flights or making big purchases.
It’s a stunning development for Jia, who made billions running tech conglomerate LeEco, but ran into enormous financial trouble as he tried to expand the company into the U.S. At the same time, he helped fund the launch of Faraday Future, which has struggled to stay afloat, facing numerous lawsuits and questions over how much money Jia has to support the company.
The database is operated by China’s top court, reports the Times, which says it’s part of a “growing effort by officials to rein in irresponsible borrowing—including by naming and shaming.”
Here’s more from the story:
Mr. Jia was added to the blacklist this week over unpaid debt totaling $72 million, including interest and fees, that he owed to Ping An Securities, a brokerage. Two units of LeEco, the group of companies that Mr. Jia controls, had already been blacklisted for smaller unpaid amounts. LeEco’s ambitious, debt-driven expansion began running aground last year, causing angry creditors to stage sit-ins at the company’s Beijing office and leading courts to take action.
The court’s order, reports the Times, says that Jia can’t engage in any “high spending” or drop money on anything that isn’t “necessary for living and working.” There’s a specific law that outlines what Jia can and cannot do, and for a guy with a penchant for high-class living, it’s surely going to present an issue: he can’t travel first-class, stay at expensive hotels, buy or build luxurious houses, purchase unnecessary cars, travel for leisure, or pay for his kids to study at a private school.
The purchase of homes, in particular, is an interesting caveat. Jia owns an expensive 7,800 square foot mansion in California that he maintained even as Faraday and LeEco suffered dire financial issues, Jalopnik reported in an investigation last month.
The Times quoted a lawyer in Beijing, Hu Wenyou, who said the debt datbase is effective at getting defaulters to pay what they owe, but only if they’re in China. As we previously reported, Jia’s holed up in California, trying to stay focused on keeping Faraday alive.
A Faraday spokesperson didn’t respond to a request for comment. We’ll update this post if we hear back.