LeEco's Coolpad delays financial report again, cites audit problems

[HONG KONG] Chinese smartphone maker Coolpad, part of the cash-strapped LeEco technology conglomerate, on Friday said it would further delay the publication of its 2016 financial results due to outstanding audit issues.

Coolpad has repeatedly delayed reporting the results because of audit issues since March, when the annual report was due.

Trading in its shares have been suspended since then.

The company needs more time to provide information requested by auditors of its annual report regarding "rationale and business substances of various prepayments and/or loans made by the company as well as going concerns", Chairman Yueting Jia said in a filing to the Hong Kong Stock Exchange.

Mr Jia, who founded the LeEco group, is Coolpad's largest shareholder with a 28.83 per cent stake.

Mr Jia has been fighting financial troubles at various units of the conglomerate with businesses spanning from entertainment to electric cars. He said this week that cash crunch at LeEco was worse than expected and needed additional funding.

In Friday's filing, Coolpad said it had received a letter from the exchange setting out conditions for the stock to resume trading, which included publishing the results, conducting investigations to address audit issues and disclosing relevant information so investors could appraise the firm's position.

It said it was taking steps to fulfil the conditions, but did not provide any timeline.

In May, Coolpad published unaudited results that showed the company flipped to a loss of HK$4.23 billion (S$748.7 million) for 2016, from a HK$2.3 billion profit in 2015.

Among China's largest mobile phone makers in 2013, Shenzhen-based Coolpad was ranked No 14 in the first quarter of 2017, according to research firm Canalys.

Analysts say the top players, such as Huawei, Oppo and Vivo, in China's fiercely contested smartphone market will take more share away from smaller vendors this year.

Coolpad shares dropped 10 per cent over the first quarter and were at HK$0.72 before trading was suspended.

REUTERS