Shulou(Shulou.com)11/24 Report--

Beijing, November 3 (Xinhua) Jia Yueting founded Faraday Future (FF) in 2014 and continued to pursue his car dream in the United States. However, eight years later, he burned more than $3 billion (currently about 21.9 billion yuan) and did not build a single car.

He seems to be better at infighting than building a car. A few days ago, foreign media published an in-depth article revealing how Jia Yueting competed for future control of Faraday, including the control of Faraday's board of directors and his struggle with Evergrande Group.

Death threats one Wednesday night, Susan Susan Swenson, then executive chairman of Faraday, received a picture in her email inbox. In the picture, her company profile picture is roughly crossed out by red digital ink, with the word "kill" written in the lower left corner. In the hours that followed, some of her colleagues received similar threats, including a reference to the recent assassination of former Japanese Prime Minister Shinzo Abe.

The threat emails marked the culmination of a months-long battle for future control of Faraday. In September, Faraday executive chairman Svenson and three others agreed to leave the board in a major restructuring after death threats, continued pressure from Faraday's largest shareholders and unexpected meddling by real estate giant Evergrande.

▲ Swenson was forced to resign over death threats although it is unclear who sent the death threats and the company has submitted evidence to FBI, but some leaders within Faraday believe the threats stem from a recent board battle among the company's major shareholders, including a group run partly by founder and Chinese tycoon Jia Yueting: Faraday Global Partners (FF Global Partners). However, Faraday Global Partners denied involvement in any death threats.

The board battle comes seven months after Faraday's board launched an internal investigation into Jia Yueting, led by a special committee led by Mr Swenson. The special committee hired Kaiyi law firm and forensic accounting firm Alvarez and Marsal to investigate Jia Yueting's impact on the company's relationships and finances.

According to a document submitted by Faraday to SEC in April this year, the committee concluded that the company's executives misled investors about the extent of Jia Yueting's daily control over Faraday. They also found that the company's executives did not properly disclose "certain relationships, arrangements and transactions" involving Mr Jia. As a result, Jia Yueting was officially removed from his post and stripped of his executive status. Jia Yueting's nephew Jia Ruokun (Ruokun Jia) was "fired for his actions during the investigation by the special committee".

However, Faraday said Faraday's global partners began boycotting the disciplinary action as early as February this year. By June this year, Faraday Global Partners began issuing public documents calling for the replacement of Faraday's director, Brian Brian Krolicki. The spillover effect of the incident disrupted a round of financing negotiations between the company and Citigroup, according to people familiar with the matter. In July, Faraday again delayed the launch of electric cars because more money was needed to start production.

Meanwhile, ▲ Jia Yueting, Faraday began to receive emails claiming to be "employee whistleblowers" who portrayed the board members as villains. A letter circulated by a group of employees working closely with Jia Yueting showed that Mr Swenson had "carried out a series of unfair and improper investigations and corrective measures against the company and its core executives".

Faraday Global Partners agreed, saying the group "does not believe that the special committee's investigation is fair" and that the investigation "unfairly punishes people associated with Faraday global partners".

The best part of the struggle came on September 19th this year. Faraday Global partner sued Faraday in Delaware Chancery Court on the same day, accusing his board of directors of violating fiduciary obligations. Faraday Global Partners urged the replacement of Mr Swenson and brought in a key supporter: Evergrande. Evergrande supports Faraday Global Partners' efforts to restructure the board. Evergrande still holds about 20.5% of Faraday after the merger of Faraday and Blank check in 2021.

Finally, Faraday and Faraday Global Partners declared a truce on September 26. Faraday Global Partners agreed to drop the suit and arranged about $100 million in short-term financing. In exchange, Swenson, Crowley and other directors agreed to leave the board at the next general meeting. A week later, Mr Swenson resigned early, citing "threats that continued links with the company might increase the risk for themselves and their families". Crowley resigned earlier this week.

Now, Jia Yueting is expected to benefit a lot from the upcoming board reshuffle. The board reshuffle will be completed at the annual shareholders' meeting postponed by Faraday. He has been appointed as an adviser to the board and Faraday Global Partners will have a say in all six new members. As Faraday said in a recent filing with the Securities and Exchange Commission (SEC), "Jia Yueting and Faraday Global Partners have strengthened their already significant influence over the company."

Although Jia Yueting has regained power, the company is under investigation by the SEC for matters related to the results of its internal investigation. Faraday said the US Department of Justice had also asked for relevant information. What's more, the electric car company needs capital, and it has to be quick. Since its establishment eight years ago, Faraday has burned more than 3 billion US dollars. Faraday reported on October 25th that the company had only $27 million in cash left. To eventually deliver FF91 SUV, it needs millions more.

Before fighting with Evergrande, Faraday has been unable to fulfill Jia Yueting's ambitions. He wants an ultra-luxury electric car stuffed with gorgeous technology. But by the end of 2017, just months after the company unveiled its first prototype, it ran out of cash.

Jia Yueting invited two former BMW executives, but when they filed for bankruptcy protection, the tycoon refused. People familiar with the matter said the restructuring would endanger his control of the company, so he refused. Then the executives resigned and Faraday accused them of "dereliction of duty".

▲ Evergrande also wanted Jia Yueting to give way to Xian. At the end of 2017, Jia Yueting found an unexpected savior: Evergrande. Evergrande promised to inject up to $2 billion into Faraday in exchange for a 45 per cent stake. At the same time, Jia Yueting officially became CEO. As a result, Faraday spent his first $800 million ahead of schedule. Evergrande agreed to pay another $700m in advance in mid-2018, but only if Jia Yueting gave way and sacrificed his ownership, according to documents filed by the two companies in the Hong Kong arbitration case.

Jia Yueting agreed, at least in name. He transferred his shares to the daughter of a Faraday vice president, but Evergrande thought it was not enough. As a result, Evergrande did not inject new money into Faraday. At the end of 2018, Jia Yueting and Faraday sued Evergrande in a US court, accusing the real estate giant of "deliberately starving Faraday." Evergrande accused Jia Yueting of "acting as a shadow director, controlling or guiding the decisions of directors who are closely related to him".

Due to lack of funds, Faraday had to give employees time off and fire hundreds of employees, and was sued by suppliers. Nick Sampson Sampson, a former Tesla executive and co-founder of Faraday, also left. "the company is virtually insolvent." He said in his resignation letter.

On the last day of 2018, Faraday and Evergrande reached a settlement. Evergrande agreed to reduce its stake to about 33 per cent, allowed Faraday to find other investors and provided Faraday with a $10 million bridge loan, and Jia Yueting's startup survived under his helm.

No matter when the next shareholder meeting is held (Faraday has not yet set a date), the start-up has agreed to completely reshuffle its board of directors, cutting the number of members from 10 to seven. Faraday Global Partners will choose three people. The other three will be selected by a panel of CEO Carsten Breitfeld, the Swenson replacement selected by Faraday Global Partners and the current manager of Faraday Global Partners. Bi Fukang is also the seventh board member.

The name ▲ Bifukang did not appear much in the board battle launched by Faraday Global Partners. People familiar with the battle say it is difficult to analyze his alliance. Until May this year, he was the manager of Faraday Global Partners. He lives in a California mansion that Jia Yueting once owned. He was also an important force at the presentation, which may be why his contract was recently extended to March 2023, which was originally due to expire in September, people familiar with the matter said. Mr Bi Fukang has not commented.

No matter how much effect Bi Fukang played on Faraday's survival or failure, he has lived in the shadow of Jia Yueting for the past few years, sometimes indeed. One person familiar with the matter recalled that in some meetings, when Bi Fukang sat at the top of the conference table, Jia Yueting would pull up a chair and sit next to him, and the meaning was clear. In good times, especially in difficult times, Faraday will always be Jia Yueting's company.

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