Truly International Holdings Limited is using the courts to go after a subsidiary of embattled Chinese tech firm LeEco.
Truly states that due to LeEco's alleged violation of a related investment agreement, the company will sue Letv Zhixin and LeEco, and is asking the defendants to return its CNY240 million investment.
According to Truly International, its wholly-owned subsidiary Truly Electronics signed an investment agreement with Letv Zhixin on February 14, 2017. Under the agreement, Truly Electronics would invest a total of CNY720 million in exchange for 2.3438% of shares of Letv Zhixin. So far, Truly Electronics has paid the first investment of CNY240 million.
However, the management of Truly International believes that Letv Zhixin and LeEco violated investment terms and Truly Electronics has stopped the payment of the remaining investment. They asked Letv Zhixin to correct the breach and return the CNY240 million investment.
On February 14, 2017, LeEco published a report, which said that the board of the company had agreed to give up its priority subscription rights for new capital of Letv Zhixin. Meanwhile, Truly Electronics would invest CNY720 million new capital for a 2.3438% stake in Letv Zhixin.
Truly Electronics is engaged in the manufacturing of various electronic products, including electronic calculators, electronic information text memo devices, digital information players, electronic components, mobile phones, electric toothbrushes, flexible multilayer circuit boards, and high density interconnection laminated boards.