Jia Yueting is the founder of LeEco and holds a 24.43% stake in Leshi, most of which has been frozen or pledged as collateral. Handout.

Debt-ridden businessman Jia Yueting is under investigation by China’s securities regulator for alleged violation and misconduct of information disclosure rules.

Leshi Internet Information & Technology, the Shenzhen-listed unit of LeEco, said in a stock exchange filing on Monday night that the company and its largest shareholder Jia Yueting have received notice of a formal investigation.

Leshi said the company and Jia will actively assist in the regulator’s investigation.

Jia is the founder of LeEco and he holds a 24.43% stake in Leshi, most of which has been frozen or pledged as collateral.

The company is now on the edge of delisting as it posted negative net assets of 3 billion yuan by the end of 2018 and reported a huge loss for two consecutive years. Shares of Leshi have been suspended since last Friday awaiting further regulatory notice.

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