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Faraday Future avoided the catastrophe in late 2017 by securing a major new investment from the health division of the Chinese real estate group Evergrande. But that money – about $ 800 million – had disappeared in July, according to a new document filed on the Hong Kong Stock Exchange. Today, Evergrande accuses the founder and CEO of Faraday Future, Jia Yueting, of trying to go back and declares that he will take "all necessary steps" to protect himself and his shareholders. The news of the deposit was reported for the first time by Reuters.
The Chinese conglomerate said Jia had resorted to a "manipulation" tactic to persuade the board of directors responsible for the deal to advance an additional $ 700 million. Meanwhile, The edge learned that Faraday Future was struggling after spending the first $ 800 million. Some of the company's vendors and suppliers have not been paid and layoffs are under consideration, according to three former employees and sources close to the company, who have asked not to be named for fear of judicial retribution. Faraday Future representatives did not respond to a request for comment prior to publication.
The new financial problem comes at a critical time for Faraday Future. The company has spent the entire year 2018 retooling a plant in Hanford, Calif., Where it plans to manufacture its first car, an ultra-premium electric SUV called FF91, by the end of the year. ;year. Even this process has stumbled, however, as The edge learned that the first and only version of the company's car, the first to be manufactured at the Hanford plant, caught fire at the end of September.
The fire occurred a few hours after the company had introduced the car at an event organized on the occasion of the "Future Day" for its employees and families. The extent of the damage is not clear because the company has forced employees to sign non-disclosure agreements specifically related to the fire, said former employees. But this is considered a major setback before the start of production later this year.
However, the most pressing problem could be that some suppliers and vendors of Faraday Future have not been paid for weeks. The stoppage of payments is a direct result of Jia spending the first installment of $ 800 million in July, which came from Evergrande through a complex structure of offshore companies, said former employees and sources close to society.
E-mails reviewed by The edge This date, which dates back to early August, shows that Faraday Future's representatives are trying to explain this by a "delay" in the processing of payments. Others have repeatedly promised that checks were issued but pending signature or kept by the company's "treasury department" for more than a month, what two former employees who were working closely with the finances of Faraday Future were the same stall tactic used in 2017 the company was almost running out of money.
One supplier, who asked not to be named, fearing to jeopardize his chances of being paid, said a Faraday Future representative had suggested to his company that he hire a collection agency. At least three other people have lodged pledges with the California State Secretary, one for nearly $ 400,000 owed on equipment sold to Faraday Future, according to official documents.
The company had previously struggled to pay suppliers in 2017, some even going so far as to sue Faraday Future in court for a refund. The company owed at least $ 100 million in early 2018 and began using new investment money to pay off those debts. Faraday Future organized a "Supplier Summit" in February, where the Supply Chain Manager was supposed to help these companies "leave with renewed confidence in our projects and funding". However, not all debts have been repaid. In a lawsuit filed this summer, Nevada's Astound Group says Faraday Future still owes about $ 1.5 million for works dating back to 2016, including unpaid bills since the 2017 launch of FF91 at Consumer Electronics. .
Jia has a history of money problems. Best known as the founder of LeEco's technology conglomerate in crisis, he currently lives in the United States after freezing his holdings in China in 2017. He was placed on a blacklist of domestic debtors and, although he still controls LeEco's listed arm, a different real estate giants (Sunac) have recently taken control of some of the conglomerate's subsidiaries.
It was also Jia's management of the company's money that allowed Faraday Future to find itself in a precarious financial situation last year. The edge reported in December. A private confrontation between him and Faraday Future's chief financial officer at the time prevented new investments and thwarted the bankruptcy attempt to restructure the company.
Although Jia was finally able to secure funding from Evergrande, the deal was signed with harsh terms, such as giving up Faraday Future's intellectual property rights and many of its assets. Evergrande has spent the last few months setting up Faraday Future brand research and development centers in China and recently bought a $ 2 billion stake in a major Chinese car dealership.
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