Fara­day Fu­ture re­buts ac­cu­sa­tion of move to breach deal

Global Times US Edition - - BIZOVE -

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.

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