(NBD) Sept. 6 -- Chinese tech giant LeEco's finance arm LeFinance is suspected of engaging in quasi-asset securitization business, which is forbidden by the Interim Measures for the Administration of the Business Activities of Online Lending Information Intermediary Institutions issued by the China Banking Regulatory Commission (CBRC) last year.

While checking LeMall's official site, National Business Daily (NBD) reporter noticed that the underlying assets of a line of products of LeFinance are accounts receivable transferred by Chongqing LeEco Commercial Factoring Co., Ltd.

In response, LeFinance explained that it is not an online lending platform, but the one that offers sale and trading information of financial products, which is part of innovation of the Internet finance. 

According to LeFinance, supply chain finance and factoring financing both are common financial services. With regard to the involved product series, creditor's rights of accounts receivable and accounts receivable offered are factoring assets in compliance with laws and regulations. The factoring business features real trading and serves the real economy. Underlying assets related to the series have nothing to do with any subsidiary of LeEco in terms of stock equity, the company underscored.

Xu Xiaolei, economist with the National Committee of Experts on the Internet Financial Security Technology, told NBD that following the regulation announcement of CBRC, many Internet finance platforms group themselves into areas where there don't exist specific regulations yet, such as Internet finance, so as to evade monitoring and supervision.

Analysys International analyst Li Xiaochuan echoed by saying that LeFinance should be subject to the CBRC regulation as it does indeed connect the asset end with the financing end.

In addition to the suspected involvement in quasi-asset securitization business, LeFinance is suspected of conducting affiliated financing.

According to information registered at the industrial and commercial bureau, LeEco Commercial Factoring is a wholly-owned subsidiary invested by LeEco, and legal representative of both LeFinance and LeEco Commercial Factoring is Jin Jie, which makes the two companies affiliated corporations.

Email: lansuying@nbd.com.cn