In January, the company received a $2.4bn emergency cash infusion from Tianjin-based Sunac China Holdings, Huaxia Life Insurance and private equity group Le Ran Investment.
The strategic investment made Sunac the second-largest shareholder in LeEco’s online video, smart TV, and movie production affiliates, LeEco’s core businesses.
Originally founded to offer limousine rides, Yidao is the last competitor to Didi Chuxing left in China after Didi, which dominates the market, bought out Uber’s China business last August. Yidao is 70 per cent owned by LeEco.
Yidao claims it employs 6m drivers and has 40m registered users, but it trails leader Didi Chuxing with only 3.6 per cent of market share in terms of total rides taken.
Both LeEco and Yidao denied Mr Zhou’s allegations in a joint statement. LeEco said the company’s automobile division, of which Yidao is a subsidiary, took out a Rmb1.4bn loan in November 2016 using LeEco’s assets as collateral. It said Rmb100m was spent on Yidao’s operations while the remaining Rmb1.3bn was spent on LeEco’s auto business.
A post on Yidao’s official social media account called Mr Zhou a “modern edition of the farmer and the snake”, a reference to a folk tale in which a snake fatally bites the farmer who saves it from freezing to death.
