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LeEco called a 'Ponzi scheme' by Tencent co-founder

After promising phones, TVs and self-driving cars to the US, Chinese company LeEco has fallen on some hard times.

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LeEco founder Jia Yueting had big ambitions.
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LeEco, the China-based consumer electronics maker, has fallen on tough times, slashing most of its US workforce. But at least one fellow tech company isn't sympathetic.

Zeng Liqing, co-founder of Chinese internet giant Tencent, called LeEco a "Ponzi scheme," the South China Morning Post reported Wednesday.

"If you're not able to spot an apparent Ponzi scheme [like LeEco], you're neither worthy of working in the investment industry nor suitable for entrepreneurship," Zeng said in a lengthy post on Chinese social media platform WeChat.

LeEco had grand ambitions of a US expansion, hoping to sell a hodgepodge of gadgets such as TVs, phones and self-driving cars when founder and then-CEO Jia Yueting revealed his plans last October at a splashy event in San Francisco. The situation went downhill from there, with the company facing financial problems that eventually led to 325 layoffs and its retreat from a deal to buy TV maker Vizio. Jia resigned from his role in early July.

While Zeng's rant was "liked" by Tencent Chairman Pony Ma and Chinese angel investor Xu Xiaoping, others came to the defense of Jia and advised people against drawing conclusions.

"Jia's still got some good cards in his hand, and he's still young. We should be more tolerant of failure, and support entrepreneurial spirit like Jia's," said Sun Hongbin, chairman of property firm Sunac Holdings, which recently loaned 15 billion yuan to the debt-ridden company. Sun is expected to replace Jia as the CEO of LeEco's video streaming arm, Leshi, although he had expressed no public interest in the position.

LeEco did not immediately respond to CNET's request for comment.

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