The mysterious LeTV shareholders meeting: there were more security guards than shareholders attending the meeting

LeTV (300104) held its first extraordinary general meeting of shareholders in 2018 at the Yunze Villa Conference Center in the Shidu Scenic Area, 100 kilometers away from downtown Beijing. This location choice seemed unfriendly to the participating shareholders.

The place is remote enough. It costs more than 400 yuan to take a taxi from downtown Beijing to there.

You can choose to check into the hotel first.

Yunze Villa is a four-star hotel with 277 guest rooms. Considering that the LeTV shareholders' meeting was held at 9:30 a.m. on February 23 and the location was remote, some shareholders who were going to the meeting chose to stay at Yunze Villa in advance.

However, some shareholders reported that they had booked a room at Yunze Villa on Ctrip in advance after LeTV announced that it would hold a shareholders' meeting. However, on February 22, Ctrip customer service informed them that the hotel was unavailable that night and asked them to book another hotel. According to Ctrip, Yunze Villa was "requisitioned" because LeTV held a shareholders' meeting.

There are very limited hotel options around Yunze Villa, and the commuting time from the city to the venue is uncertain.

It is worth mentioning that Zhang Zhao, one of the six directors, supervisors and senior managers of LeTV who attended the shareholders' meeting that day, arrived at the scene after the meeting started.

It can be seen that there were only 19 shareholders and representatives (including a large number of media reporters) attending LeTV's extraordinary shareholders' meeting on February 23, and the number was even less than the security personnel on the scene.

Compared with the shareholders' meeting in July 2017, the security of the interim shareholders' meeting on February 23, 2018 was significantly strengthened. There were security personnel guarding the entrance of Yunze Villa to the conference center. In the conference room, the number of security personnel plus LeTV and hotel staff even exceeded the number of shareholders in attendance.

There are many security personnel outside the Yunze Villa International Conference Center

Sun Hongbin, Jia Yueting's former close comrade-in-arms and current chairman of LeTV, did not appear at the extraordinary shareholders' meeting on February 23.

However, LeTV executives who attended the meeting obviously did not want to be interpreted as "escape" by shareholders present.

A shareholder who claimed to have held LeTV shares for more than five years said at the scene that he came to the meeting just to meet LeTV chairman Sun Hongbin, but Sun Hongbin was absent from the meeting. However, he still said: "I would like to thank Mr. Sun for taking over (LeTV)."

LeTV's secretary Zhao Kai immediately explained that Sun Hongbin had a temporary schedule, "(this) does not mean that not attending the meeting is an attitude towards the new LeTV." Liu Shuqing, who was sent to LeTV by Sunac and is currently the director and general manager of LeTV, also added: "It is true that Sun Hongbin is still very supportive of LeTV and has invested a lot of personal energy in it."

Since LeTV resumed trading on January 24, it first continued to fall by 11 limits and issued risk warning announcements several times, but investors still began to boldly "buy the bottom" and LeTV hit the limit on February 22. On February 23, during the shareholders' meeting, LeTV's stock price also rose rapidly and hit the limit during the trading session.

Despite this, the shareholders' meeting, which lasted more than an hour, failed to reveal much substantive good news.

On the day before the shareholders' meeting, an announcement from LeTV showed that as of now, the company has not formed any substantive plan or intention regarding the "reorganization plan" mentioned by the media.

LeTV shareholders meeting held at Yunze Villa

During the exchange session, when talking about the strategic direction of LeTV and Le Pictures for future home Internet entertainment, Zhang Zhao, director of LeTV and chairman of Le Pictures, said: "There is no problem with the direction, but I should be realistic (and say that) the difficulties are huge, huge, huge." Zhang Zhao used three "huge"s in a row to emphasize "difficulties."

Liu Shuqing also said: "If LeEco's Internet genes and content genes are well combined, it should be able to do well in the future, but we have to face the difficulties at hand. The difficulties are very, very great, and I hope that all shareholders will continue to support and understand."

Regarding the huge amount of related-party transactions , Liu Shuqing said: It is very difficult to recover, but the management has not given up its efforts and has been communicating with the non-listed system to seek solutions. So far, there has been no substantive content. "The results are not much, but we are all working hard."

According to the risk warning announcement released by LeTV on January 19, the LeTV non-listed system controlled by Jia Yueting owes LeTV 7.53 billion yuan, which has imposed an unbearable burden on the company's business operations.

However, after LeTV released this announcement, Jia Yueting's LeTV debt handling team issued a statement on January 22, saying that the amount of repayment that LeTV Holdings and its affiliates need to bear to the listed company is estimated to be around 6 billion, not 7.5 billion as stated in the LeTV announcement.

The dispute sparked speculation that the conflict between Sun Hongbin and Jia Yueting had become public.

At the shareholders' meeting, some shareholders also raised questions about the communication between Jia Yueting and LeTV. Zhao Kai responded by saying, "The board of directors and management have communicated very smoothly with Mr. Jia, whether it is him or his two agents in China. The issues of arrears in related-party transactions are still being discussed."

Currently, LeTV's share price has fallen by more than 60% compared to before the suspension, and all parties are paying attention to whether Jia Yueting's stock liquidation line has been broken.

As of now, Jia Yueting holds 1.02 billion shares of LeTV, accounting for 25.67% of the total share capital, of which 1.019 billion shares have been pledged to financial institutions and 1.02 billion shares have been frozen by judicial authorities such as the Beijing No. 3 Intermediate People's Court.

So far, LeTV has not announced the liquidation of Jia Yueting's pledged shares. In this regard, Zhao Kai said: "The (equity) disposal itself is his personal matter, and the possible liquidation is also his personal matter. If the liquidation line is triggered, we will disclose it. We have also issued more than one risk warning. Such problems may occur, including he himself will also make corresponding notifications. We will also make an announcement at the corresponding stage. There is no further disclosure of the incident at present."

An investor asked: "Does the lack of an announcement mean that the liquidation line has not been reached yet?" Zhao Kai's response was: Strictly speaking, the standards that require disclosure have not been met.

For ordinary investors, continuous limit downs result in direct market value losses.

At the shareholders' meeting on February 23, a shareholder who claimed to have bought LeTV with leveraged financing said that he was now facing the risk of having his position liquidated. According to the shareholder, his position was as high as 50 million yuan.

According to LeTV's current situation, even though it is unable to "recover", some shareholders still plan to continue holding their shares.

A shareholder of LeTV who attended the meeting said that he started buying LeTV after Sun Hongbin invested in LeTV in 2017. The price at that time was 41 yuan per share, and he bought more than 50,000 shares in total. "I lost a lot, 500,000 yuan is gone," the shareholder said, "I can only hold on to it and wait for the best to come."

What provides some comfort to these investors is that LeTV's stock price has surged for two consecutive trading days in anticipation of the shareholders' meeting.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.