Lentuo International Inc (LASLY)

[icroucher]

But it referred to LAS revenue paying of the debt, not any earnings that Guo got from the company. He was treating the LAS revenue as a source of paying of his debts as though they were LAS debts, and as if he was free to treat LAS revenue as his own.

I've seen similar arrangements in the context of money laundering, LAS being the "beneficial" as opposed to "legal" owner of those debts.

Why were we paying off someone else's debt? If I have a credit card bill and someone else is paying it off for me then, even if technically it is my debt, in practice it is their debt as it affects their net income.

LAS having to pay back those loans from its revenue made a bad cash flow situation even worse and and contributed to the inability to operate as a business. So of course shareholders should have known about it. Note how in the court cases about the debts in China, LAS is a party, so we are being treated as if they were our debts.