Leeco IPO incident: seven years ago, there was a lot of doubt.

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According to the financial report, according to Leeco's listing announcement, its top two revenues are paying users and advertising, respectively. Its largest advertiser, Beijing Xinruili Advertising Co., Ltd., has only two office staff for a long time, but has developed a 10 million-level advertising business. The annual inspection report for industry and commerce shows that in 2008, China Television Longsheng had zero business income, a net loss of 4500 yuan and one employee, but the 2010 Leeco prospectus revealed that China Television Longsheng contributed 6.51 million yuan to Letv in 2008.

7 years ago, Leeco faced doubts when it went public, after all, it did not escape the test of time.

on October 30th, Tencent Finance and Caixin successively reported that a number of members of the former Development Review Committee who participated in the IPO audit of Leeco were recently investigated.

the reporter quoted people familiar with the matter as saying that three to four members of the first gem Development and Review Committee were investigated at the end of July and the beginning of August 2017, including two from accounting firms, which are still under investigation. "it is mainly related to the IPO of Leeco. I don't know if it will be investigated or whether the public security will be involved."

according to the latest news, the three committee members under investigation so far include Xie Zhongping, partner of Lixin Accounting firm (Special General Partnership), Sun Xiaobo, Director of Beijing Tianyuan Accounting firm, and Han Jianyu, Director and Executive partner of Dahua Accounting firm. Among them, Xie Zhongping and Sun Xiaobo are two of the first seven members of the Development and Review Committee of Leeco. The reporter quoted people familiar with the matter as saying that Han Jianyu did not directly participate in the Letv hearing to vote, but provided help during Leeco's IPO.

< strong > 7 years ago < / strong >

Leeco launched in June 2010 and landed on the gem in August, becoming the first listed company in China's video industry. The listing price exceeds the issue price by 60%, close to 47 yuan.

at that time, Leeco ranked 168th in terms of domestic website traffic, far behind Youku's 10th and Tudou's 12th. Just 10 days before the listing of Letv, Ku6, which ranks far ahead of Letv in terms of traffic, was listed on Nasdaq through backdoor Huayou Century, but the valuation of Ku6 by NASDAQ was less than that of Letv. At the beginning of 2014, Letv's market capitalization reached 41 billion yuan, making it the company with the highest market value on gem.

when it goes public, Leeco claims that its advantage over many video sites with more traffic is that it is in a healthier financial position. Leeco claimed that it was "already profitable" when it raised funds in 2008, when many domestic "mainstream" video websites were still in a state of loss.

was Leeco's financial situation really good at that time? The media exposed the problems in 2014.

Financial reports say that according to Leeco's listing announcement, its top two revenues are paying users and advertising, respectively. Its largest advertiser, Beijing Xinruili Advertising Co., Ltd., has only two office staff for a long time, but has developed a 10 million-level advertising business. The other two advertisers, Beijing Zhongshi Longsheng Advertising Co., Ltd., and Beijing Spring and Autumn Advertising Co., Ltd., the legal representative is the same person, named Chen Jie. The former office is at No. 564 Xingyi Street, Town, Tongzhou District, Beijing. The latter is located in Building 1, No. 1, Jiayuan District, Huairou District, Beijing. The establishment dates of the two companies are only three months apart, and the registered capital is both 500000 yuan.

the annual industrial and commercial inspection report shows that in 2008, China Television Longsheng had zero business income, a net loss of 4500 yuan and one employee, but the 2010 Leeco prospectus revealed that China Television Longsheng contributed 6.51 million yuan in advertising revenue to Letv in 2008. In 2009, CCTV Longsheng had an operating income of 85000 yuan, a net profit of 2300 yuan, and two employees. Leeco's prospectus revealed that CTV Longsheng contributed 3.245 million yuan of advertising revenue to Letv in this year.

China Renaissance Capital Investment CEO Bao Fan pointed out in this report: "A video website that ranks 17th has the first financial index in the industry."

but Jia Yueting firmly denied the problem of "Letv's financial fraud". He responded to the above media that the CSRC had conducted an in-depth investigation into Letv's financial fraud questioned by the media, which (still approved listing) meant that Letv did not have any problems with his business.

Edit: mary