Faraday Future rebuts accusation of move to breach deal
sponse to an announcement by Evergrande Health Industry Group, the healthcare division of Chinese real estate group Evergrande.
“Evergrande failed to make any of the promised additional payments agreed to in July 2018, including $500 million of the $1.2 billion in 2018,” FF said.
Evergrande said on Sunday that FF had sought legal arbitration to terminate the contract and introduce other investors without Evergrande’s permit, in the wake of failing to advance another $700 million.
The former partners are at odds publicly and they have issued different statements on the amount of further investment and whether the terms of payment have been met, indicating the fight for control of the electric car start-up is intensifying, analysts said.
According to the Beijing News, Jia expects to dilute Evergrande’s stake by introducing other investors. Jia’s move to seek arbitration to terminate the contract and introduce other investors without Evergrande’s permit is for the purpose of preventing Jia from losing dominance over FF’s operations if he can’t fulfill the promise of mass production in 2019.
“Evergrande held the payments back to try to gain control and ownership over FF China and all of FF’s intellectual property,” FF said. “Evergrande is preventing FF from accepting any immediate financing from other sources.”
Evergrande said that Jia used “manipulative” tactics to persuade the board of directors who oversaw the deal involving the further $700 million. But FF said neither Jia nor anyone else manipulated the board in reaching agreements.
In the wake of FF’s announcement, an insider disclosed that the key dispute between FF and Evergrande is the additional con- ditions that Evergrande requires for the further $700 million. Because these conditions concern business secrets, neither side can reveal them, and outsiders can only wait for the arbitration result from the Hong Kong International Arbitration Centre, said a Chinese financial media wallstreetcn.com.
FF, founded in 2014 by Jia, is seen as his only chance to redeem himself after the failure of his conglomerate LeEco.
The only Chinese firm still under his control (Le.com) is facing a potential delisting from the Shenzhen Stock Exchange due to negative assets. Its shares fell 7.93 percent to 3.6 yuan Monday.