Author | Wang Gangge
In traditional Chinese culture, the original life year is too old, and the offender is too old to flow the year unfavorably, and things are not smooth. But Jia Yueting, who had just survived the Year of the Ox and ushered in the Year of the Tiger, did not turn to good luck because of the end of the year of his life.
Just on the second day of the Spring Festival of the Year of the Tiger, Jia Yueting's "American scam" came to full exposure — Faraday Future's (FF) Independent Directors Special Committee completed a previously announced investigation into allegations of inaccurate disclosure, which found certain inconsistencies in the company's investor statements and certain weaknesses in the company's control and culture.
The "inconsistency" here is that FF previously claimed to have an order of 14,000 vehicles, but the actual payment was only a few hundred people. In particular, the investigative documents note that the Company's statement prior to the business consolidation that it had received more than 14,000 bookings for FF 91 vehicles could be misleading.
The "some weaknesses" here are directed at Jia Yueting, and the survey content bluntly says that "Jia Yueting's participation in the business is underestimated." As early as 2019, Jia Yueting resigned as CEO and became CPUO (Chief Product & User Experience Officer), appointed Bi Fukang as global CEO, and openly recruited the position of global chairman. However, from the survey content and the state of FF in recent years, Jia Yueting is obviously still the "main backbone" of FF. Another foreign media report said that Jia Yueting's "own person" inside FF is Wang Jiawei, vice president of FF's global capital markets, who is also Jia Yueting's nephew.
However, the document also highlights that other allegations facing FF, including a previous short-selling report by J Capital Research, were not supported by the evidence reviewed.
The FF Special Committee filed 8-K documents with the SEC
At the same time of "self-disclosure", the board of directors of FF was overhauled, and in response to the existing findings, the special committee put forward a number of suggestions for rectification measures, which were approved by the board of directors of FF on January 31, 2022:
AppointIng Board Independent Director Susan Swenson as Executive Chairman of the Board, CEO Carsten Breitfield and Founder and Chief Product and User Ecosystem Officer Jia Yueting will report directly to Susan Swenson, while Carsten Breitfield and Jia Yueting will both cut their annual base salaries by 25 percent. Appointed Jordan Vogel as Lead Independent Director. Under the new leadership structure, Brian Krolicki will step down as Chairman of the Board and Chairman of the Corporate Governance and Nomination Committee to become a member of the Audit and Compensation Committee of the Board, and Scott Vogel will become Chairman of the Audit Committee and corporate governance and nomination committee of the Board. Wang Jiawei, vice president of FF Global Capital Markets, was suspended.
Jia Yueting will report directly to Susan Swenson, who has no car experience, and the "extremely insulting" salary cut partly indicates that Jia Yueting is experiencing a power storm within FF. "FF is not surnamed Jia?" I'm afraid it's the most central issue for the controversial company. And Jia Yueting will also usher in a more severe credit crisis with almost no way out.
On February 4, Pomerantz Law Firm, which had filed a class action lawsuit for Luckin stock investors, announced that it would investigate claims on behalf of investors in FF. Previously, a number of law firms have filed class actions against FF.
On the day of the FF listing, Jia Yueting appeared on the NASDAQ site
FF should not have "fallen" into the current dilemma, whether it is strategic cognition or talent technology, or even funds, FF has always had an advantage.
Jia Yueting jumped into the new car as early as 2014, launched the first model FF 91 in 2017, and was once considered to have a chance to kill Musk. In 2014, after test driving Tesla in the United States, Jia Yueting made up his mind to enter the electric vehicle industry. In the same year, it invested in the electric vehicle startup Atieva (later Lucid Motors), vigorously promoted LeEco's LeEco automobile, and invested in the establishment of Faraday Future FF in the United States at the end of 2014.
FF has attracted a large number of technical and management talents from Tesla, BMW and other enterprises. In June 2016, FF obtained its autonomous driving test license in California and announced a $1 billion investment in the construction of a gigafactory in Nevada. On January 3, 2017, FF released FF91 in Las Vegas, and it also received a lot of flowers and applause for a while. At that time, Li Bin was still fighting in Easy Car and Mobike, and Ideal Car did not have any products.
Even today, FF still has many of the top talents in the automotive world:
CEO Carsten Breitfield joined FF in September 2019 after co-founding by-one Chinese electric vehicle startup Byton, where he served for 20 years as Vice President of the BMW Group and Head of the landscape-changing i8 luxury plug-in hybrid model project, as well as responsible for a range of key engineering departments in BMW's chassis development, powertrain development and corporate strategy areas. Christian Gobber, who was responsible for developing and executing FF's O2O commercial sales strategy, introduced the Maserati brand to the Chinese market and built the Chinese market into the second-largest sales and profitable market for the Marasati brand in the world for 9 years. He then moved to the United States, where he served as CEO of Maserati USA during the introduction of the Levante SUV. Prior to joining FF, Phil Bethell was responsible for manufacturing engineering at both Richo and Tesla, focusing on the development, testing, efficiency improvement, manufacturing and operation of electronics and complete vehicles. Matt Tall, who is responsible for manufacturing, focuses on the Hanford manufacturing plant and the volume production of the FF 91, and he has been responsible for vehicle manufacturing at Ford, General Motors and Mercedes-Benz. Prior to joining FF, he served as Vice President of Manufacturing at Rivian. Benedikt Harmann, who is responsible for the supply, procurement and transportation of all capital equipment, materials, vehicle components, production lines and facilities, has led several procurement and supplier initiatives at BMW, including the successful launch of the BMW 5 Series, X3, 3 Series and X2. Bob Kruse, who is responsible for product execution, was a co-founder and co-director of the GM/University of Michigan Powertrain Advanced Battery Technology Alliance, where he led the team to complete the execution of chevrolet Volanda and establish the largest battery test facility in North America.
This is the same as the situation of LeTV at that time.
At that time, Lu Zhengyu, the head of LeTV Automobile, worked in South Korea's Daewoo, Ford, General Motors, Ferrari, Infiniti and other companies. In an interview with Forbes, he recalled: "To say that you have no doubts or worries is definitely false." "But in October 2014, after talking for three hours with Jia Yueting, who had not yet returned to China, he finally decided to join LeEco." Because I met Jia Yueting. He was sincere and candid, and I chose to trust him. ”
Jia Yueting and the FF team
At the level of funds, there are many people who choose to continue to believe in Jia Yueting and believe in FF.
In addition to sunac Sun Hongbin, who is familiar with crying "borrow him 10 billion again, I am stupid" and Evergrande Xu Jiayin, who is "difficult to protect himself", Palantir, the world's most mysterious software service company, which predicted bin Laden's hiding place through data analysis, invested FF 25 million US dollars, geely holding group also officially announced the signing of a framework cooperation agreement with Faraday Future, and participated in a small amount of investment in the listing of Faraday Future SPAC as a financial investor.
These funds give FF a certain amount of confidence. In a conference call in December last year, FF CEO Bi Fukang once again responded to the outside world's questions about the FF91 mass production time and funds: "The company has sufficient funds to complete the FF91 project, and the project's production time target is still July 2022. ”
Palantir invests in FF
However, FF's net loss in the third quarter of 2021 was about $280 million, which was larger than the third quarter net loss of "Wei Xiaoli", which has achieved large-scale delivery. What is even more bizarre is that FF is actually quite "saving money" in research and development - FF's research and development expenditure in 2020 is only 20.186 million US dollars, about 130 million yuan. In 2017, WEI's research and development expenditure has reached 2.6 billion yuan.
FF estimates it will also need about $1.5 billion in additional funding and expects to achieve profitability and positive cash flow in 2024. As of September 30, 2021, FF's total assets were approximately $1.1 billion, including $667 million in cash and cash equivalents, an increase from $316 million at the end of 2020.
Bifukang said the new car is still planned to launch in July 2022. But short-selling agency J Capital firmly believes that "FF can never sell even a car, so far, this is nothing more than Jia Yueting taking money from American investors to fill his debt black hole." ”
At present, the total market value of FF is about 1.401 billion US dollars, which is nearly 70% of the market value of about 4.5 billion US dollars at the beginning of the listing, and more than 3 billion US dollars (about 19 billion yuan). ）
The following are the main contents of the FF report compiled and compiled by "True Detective AlphaSeeker":
Board Arrangement:
Susan Swenson was appointed Executive Chairman and is currently an independent member of the Board of Directors. In view of Ms. Swenson's role as Executive Chairman, she will step down from the Audit and Compensation Committee of the Board; (Ms. Susan Swenson will be entitled to a base salary of $100,000 per month and will also receive stock options equivalent to $3 million, of which 50% will be granted and effective January 31, 2023.) CEO Carsten Breitfield and Jia Yueting, founder and chief product and user ecosystem officer, will report directly to Susan Swenson that their base annual salaries will be reduced by 25 percent; Jordan Vogel will be appointed as lead independent director; and under the new leadership structure, Brian Krolicki will step down as chairman of the board and chairman of the corporate governance and nomination committee to become a member of the board's audit and compensation committee. Jordan Vogel will step down as a member of the Corporate Governance and Nominating Committee; Scott Vogel will become Chairman of the Audit Committee, Corporate Governance and Nominating Committee of the Board; and Jiawei Wang, Vice President of Global Capital Markets at FF, will be suspended without pay.
As previously disclosed on November 15, 2021, the Board of Directors established a special committee to investigate potentially inaccurate disclosures, including claims made in the October 2021 Short Seller Report, which resulted in the Company's failure to file its Q3 2021 Quarterly Form 10-Q Report ("Q3 Form 10-Q") and the revised S-1 Form Registration Statement (File No. 333-258993) ("Form S-1/A") in a timely manner. The Special Committee engaged outside independent counsel Kirkland & Ellis LLP and Legal Department accounting firm Alvarez and Marsal to assist in the review. The Special Committee has completed its review and, on the basis of its findings and actions, will conduct additional investigations and remediation work under the guidance of the newly appointed Executive Chairman and report to the Board of Auditors.
The Special Committee made the following findings:
About FF Intelligent Mobility Global Holdings Ltd. In july 2021, the business merger with Property Solutions Acquisition Corp. was inaccurate in statements made by some company employees describing Mr. Jia's role within the company to certain investors. Jia Yueting's role in the company's post-merger management is more important than that of some investors. The company said in a pre-merger statement that it had received reservations for more than 14,000 FF 91 cars, but that statement could be misleading because only a few hundred of those bookings had been paid, while other bookings (totaling 14,000) had not yet been paid. Consistent with the Company's previously publicly disclosed information regarding material deficiencies in its internal controls, the Company's internal controls over financial accounting and reporting need to be upgraded. The company's corporate culture fails to adequately prioritize compliance.
At the direction of the Executive Chairman, the Company will continue to conduct investigations and remedial work, including regarding the inaccuracies in its corporate housing arrangements and its related party disclosures. Based on the findings, the Special Committee further concluded that, in addition to the above, the other substantive allegations of inaccurate disclosures by the companies it assessed, including those disclosed in the October 2021 short sellers' report, were not supported by the evidence reviewed.