Gasgoo.com (Shanghai November 15) - Reports have been circulating that Li Shufu's Geely Automobile has been under a lot of heat from foreign investors as of late. According to an article appearing on capitalweek.com.cn, Geely had borrowed high interest funds when purchasing Swedish manufacturer Volvo and that liability rates have now exceeded 73 percent. However, Geely's lawyers denied the reports, calling them entirely unfounded and aimed at defrauding both the image of the manufacturer and Mr. Li. They have also announced that they are taking legal measures against the site, the Beijing News reported.

The capitalweek.com.cn report alleges that Geely is facing financial trouble due to its purchase of Volvo. The only reason Geely was able to acquire Volvo was due to the amount of money it was willing to put down. The report claims that the cash-stripped manufacturer had no choice but to borrow loans from the authorities and national banks. Geely allegedly also issued high interest bonds to foreign banks.

Geely Holdings' liabilities have climbed from 4.78 billion yuan ($698.66m) in 2008 to 71.07 billion yuan ($10.69b) last year, increasing 73.4 percent. An investment report by Goldman Sachs done this August revealed the sources of Geely's funds. According to the report, Geely covertly began contacting foreign private equity firms such as the Carlyle Group in order to have Goldman Sachs' bonds returned.

The story has dealt a damaging media blow to the manufacturer, who has already filed claims against the site. Geely also said that its liability rates were reasonable and not a matter of concern, adding that Western manufacturers generally have rates of 70 to 80 percent.