Chinese Entrepreneur and co-founder of the California based electric car startup Faraday Future, accused Evergrande Health Industry Group, a subsidiary of property developer China Evergrande Group, one of its investors, of failing to make good on promises.
He alleged that Evergrande was holding back payments to the extent of CNY 700 million and filed an arbitration claim in Hong Kong to cancel all agreements with Evergrande.
Jia Yueting escaped from China due to his broken capital chain, and Faraday Future became the biggest capital for his comeback.
At the end of June, Evergrande Health, Evergrande's Hong Kong-listed company, announced that it had acquired Hong Kong Shiying for HK $6.767 billion, controlling 45% of Smart King, the parent company of Faraday Future.
Hong Kong Shiying promised to invest a total of $2 billion in FF and has paid $800 million in advance by May 25 this year. But in July when Yueting asked for an additional $700 million, Evergrande signed a supplementary agreement to pay on conditions.
However, the two sides have been disputing about it ever since. Evergrande believes that Yueting did not meet the terms of payment of the supplementary agreement.
According to the original agreement, by the end of 2018, Yueting will have to honour the promise of the first batch of electric vehicles to be delivered in volume, otherwise, he will lose the actual control over Smart King.
This July's supplementary agreement looks more like an excuse Yueting found for lifting the fetters of Evergrande. And now he hopes to remove Evergrande 's transfer of control of their own agreement, in order to avoid the possibility of losing control of FF in the future.
Evergrande Health did not disclose the contents of the supplementary agreement, but Faraday Future said that Evergrande should not refuse to pay funds while it enjoys the rights and interests after the supplementary agreement came into force, including taking over most of the management rights of Faraday Future.
But if Evergrande pays the money, can it really take over most of the management power of FF China? It’s something to be watched out for.
(Reported by Jing Cai, an intern at The Passage)