--- title: "Nearly 2.3 billion was illegally \"transfused\" to Jia Yueting and the LeEco system, and former Coolpad directors were heavily fined" type: "News" locale: "en" url: "https://longbridge.com/en/news/284100116.md" description: "Former Coolpad executive Zhang Wei was sentenced by the Hong Kong High Court to a 5-year disqualification order from serving as a director and required to pay HKD 4 million for assisting in the illegal transfer of nearly HKD 2.3 billion to companies affiliated with LeEco. This case has become a landmark case for the Hong Kong Securities and Futures Commission in holding directors of listed companies accountable. Between 2016 and 2017, Coolpad provided funding to LeEco through multiple transactions without following compliance approval procedures, resulting in direct losses exceeding RMB 83 million" datetime: "2026-04-26T05:27:06.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284100116.md) - [en](https://longbridge.com/en/news/284100116.md) - [zh-HK](https://longbridge.com/zh-HK/news/284100116.md) --- # Nearly 2.3 billion was illegally "transfused" to Jia Yueting and the LeEco system, and former Coolpad directors were heavily fined On December 17, 2025, the Hong Kong High Court made a ruling against Zhang Wei, the former executive director of COOLPAD GROUP (02369.HK, hereinafter referred to as "Coolpad"). Due to Zhang Wei's alleged assistance in illegally transferring a large amount of company funds to companies associated with LeEco, he was sentenced to a 5-year disqualification order from serving as a director and was required to compensate Coolpad HKD 4 million, along with bearing HKD 750,000 in legal costs for the Hong Kong Securities and Futures Commission. This case has become one of the landmark cases for the Hong Kong Securities and Futures Commission to pursue the responsibilities of directors of listed companies under Section 214 of the Securities and Futures Ordinance. On April 22, 2026, the Hong Kong High Court further disclosed detailed reasons for the ruling, revealing specific details of the illegal fund transfers. The judgment seen by the Daily Economic News shows that Coolpad and its subsidiaries transferred approximately HKD 2.275 billion to LeEco-related companies through five transactions related to LeEco from June 2016 to March 2017, of which approximately HKD 1.776 billion ultimately flowed into LeEco and its affiliates controlled by Coolpad's then-majority shareholder Jia Yueting. Specifically, Coolpad provided short-term financing to LeEco-related companies disguised as procurement prepayments, loans, and advertising fees, but these transactions did not undergo compliance approval procedures, nor were due diligence investigations conducted, and timely disclosures were not made. Ernst & Young had repeatedly warned about the compliance and fund recovery risks of these transactions, but Coolpad did not heed these warnings, ultimately leading to a direct loss of over HKD 83 million. The five transactions mentioned in the judgment are as follows: _**●**_ From June to September 2016, Coolpad paid a total of USD 170 million in "deposits" to the intermediary company Young Star under the guise of acquiring an American company, but most of the funds were actually transferred to the accounts of Hong Kong LeEco-related companies; _**●**_ In August 2016, Coolpad's wholly-owned subsidiary Dongguan Yulong Communication Technology Co., Ltd. (hereinafter referred to as "Dongguan Yulong") prepaid HKD 300 million for the procurement of mobile phone components to Beijing Duole Smart Technology Co., Ltd., controlled by a friend of Jia Yueting and Liu Hong, Yu Enyuan, but these funds were ultimately transferred to LeEco Holdings (Beijing) Co., Ltd. (hereinafter referred to as "Beijing LeEco"); _**●**_ In December 2016, Dongguan Yulong signed a procurement framework agreement with another company controlled by Yu Enyuan, New Stone Dragon Code (Beijing) Technology Co., Ltd., prepaying HKD 300 million, which was also transferred to Beijing LeEco; _**●**_ In March 2017, another subsidiary of Coolpad, Yulong Computer Communication Technology (Shenzhen) Co., Ltd. (hereinafter referred to as "Shenzhen Yulong"), provided a total of HKD 405 million in short-term loans to six companies closely related to LeEco, with the funds ultimately repaying the debts from the first transaction through multiple layers of transfers; _**●**_ In the same month, Shenzhen Yulong also paid HKD 80 million in advertising fees to Beijing Maiji Partners Advertising Co., Ltd., but this advertising agreement was later canceled, and approximately HKD 69.875 million remains unrecovered to this day As the financial manager of COOLPAD from December 2016 to March 2017 and an executive director from March 2017 to January 2018, Zhang Wei was directly involved in the approval or fund transfer of the last three transactions mentioned above. The judgment pointed out that Zhang Wei was aware of the significant recoverability risks and the possibility of violating listing rules related to the transactions as early as January 2017, but he did not timely and adequately report to the board of directors, nor did he take appropriate actions. The Hong Kong High Court found that Zhang Wei's actions severely violated his duties as a director, especially as he blindly executed the instructions of Jia Yueting and other senior executives of LeEco without considering the best interests of the company. In addition, he failed to ensure that COOLPAD disclosed transaction risks in a timely manner, allowing the company's internal controls to fail and information disclosure violations to occur. Regarding the judgment against Zhang Wei, the court considered his short period of involvement and that he did not personally benefit from it, as well as his cooperation with the investigation and agreement to assist in testimony, thus making appropriate reductions in determining the compensation amount. The court took into account his net assets of approximately HKD 5.8 million and ultimately ruled that the compensation amount would be HKD 4 million. Furthermore, the Hong Kong Stock Exchange had issued a statement as early as August 2021 condemning COOLPAD and six former directors including Jia Yueting, warning that if Jia Yueting or Jiang Chao continued to serve on the board, it would severely harm the interests of investors. As of now, the Hong Kong Securities and Futures Commission's legal proceedings against the other six former directors of COOLPAD (namely Jia Yueting, Jiang Chao, Liu Jiangfeng, Liu Hong, Chen Jingzhong, and Xie Weixin) are still ongoing, and the commission reserves the right to continue pursuing losses. However, Jia Yueting went to the United States in July 2017, making it perhaps not easy to hold him accountable. Source: Caixin.com, compiled from Daily Economic News ### Related Stocks - [02369.HK](https://longbridge.com/en/quote/02369.HK.md) ## Related News & Research - [Fosun Pharma unit Fosun Adgenvax files for Hong Kong IPO in proposed spin-off listing](https://longbridge.com/en/news/290957351.md) - [CITIC Resources says unaware of reasons behind unusual share moves, flags 10.01% stake sale by Chan Kin vehicle](https://longbridge.com/en/news/290978997.md) - [00:02 ETAnime "KAGURABACHI" Casts Katsuyuki Konishi as Togo Shiba; Cast Comments, Character Visual & Trailer Revealed!](https://longbridge.com/en/news/290911795.md) - [CITIC Resources Halts Hong Kong Trading Pending Inside Information](https://longbridge.com/en/news/290929972.md) - [Is the economy that bad right now?](https://longbridge.com/en/news/290993093.md)