After Jia Yueting's confidant Wang Jiawei was out, FF took more disciplinary action: removing Jia Yueting from his executive position

Leifeng Network reported on April 15 that as part of the internal investigation that has been concluded, the troubled Faraday Future has taken more disciplinary actions, including removing its founder and former CEO Jia Yueting from his executive position.

Faraday Future said in a regulatory filing on Thursday that Jia will continue to serve as chief product officer and report to the executive chairman. However, Jia's role will be limited to focusing on the product and mobile ecosystem, the Internet, artificial intelligence and advanced research and development technologies, and he will no longer hold the executive position of executive.

It is unclear whether Faraday Future will be able to submit its 2021 annual report on time after this investigation, so that complying with NASDAQ regulations will not face the risk of being delisted.

Just two days ago, Jia Yueting's cronies, one of FF's core executives and vice president of the capital department, Wang Jiawei, had left FF. Sources close to FF revealed that the contradictions between the current FF board of directors and the management team dominated by Jia Yueting have escalated, and the influence of the Chinese executive founding team represented by Jia Yueting on FF has been seriously weakened.

According to multiple sources, Wang Jiawei is the son of Jia Yuefang, and Jia Yuefang and Jia Yueting are sisters and brothers. Wang Jiawei is not only Jia Yueting's nephew, but also the CFO of FF.

Wang Jiawei studied at the Central University of Finance and Economics and New York University in the United States, only in his 30s, worked at LeTV after graduating from college in 2014, and began to serve as vice president of FF's global capital markets in 2018.

According to the listing documents, Wang Jiawei directly enjoys 7.87 million FF exercisable options and 4.1 million conditional exercise options, totaling about 12 million shares, focusing on the exercise price of less than $0.36 per share, almost for free. In addition, Wang Jiawei also enjoys 9.1 million shares of options for FF's actual control company "FF Global", thus indirectly holding FF.

On October 7 last year, less than 4 months after Faraday Future successfully landed on the US stock market, FF was shorted by the short-selling agency J Capital Research (Meiqijin Investment Consulting).

J Capital Research highlighted in the report that Jia Yueting may still have control over FF through direct control, holding positions, hiring relatives, etc. Wang Jiawei, who was the vice president of FF's global capital markets at the time, was Jia Yueting's nephew.

J Capital Research, a short-selling agency at the time, released a 28-page short report questioning Faraday's future financial position, the number of car bookings, and its capacity to mass-produce. The report believes that the order volume claimed by FF has a false component, or there is a phenomenon of "left hand to right hand". It said that 78% of the orders in the figures claimed by FF came from the same company, which is likely to be a subsidiary of FF.

In addition, FF's prospectus shows that FF91 still needs $1.4 billion to achieve mass production, but the agency believes that no institution will provide financing and loans for FF. In the 28-page report, J Capital Research bluntly stated that "Faraday's future car can't be sold."

In response to the short report, Faraday Future set up a "Special Committee of Independent Directors" to conduct internal investigations. Subsequently, the FF Automotive Investigation Committee announced the results: FF91 booking data was false, and announced a major restructuring of the board of directors.

In a report filed by FF's Independent Special Inquiry Commission to the U.S. Securities Regulatory Commission, they said that "the FF's previous claim in the listing prospectus that it has received more than 14,000 bookings for FF 91 vehicles" may be misleading because only a few hundred of these bookings have been paid, while the others (totaling 14,000) have not been paid. ”

The survey report also pointed out that "Jia Yueting's participation in FF was underestimated."

As early as 2019, Jia Yueting announced his resignation as CEO of FF and became the CPUO (Chief Product & User Experience Officer) of FF. However, according to the investigation, Jia Yueting has mastered the development of FF by installing relatives within the FF management and has a strong voice within FF.

In response to this matter, the FF Special Committee also listed a series of remedies.

Among them, FF has newly established the position of executive chairman of the board of directors, which is served by Susan Swenson, one of the former board members of FF, and Bi Fukang, the current CEO of FF, and Jia Yueting, CPUO, will report to him. Jia Yueting and FF CEO Bi Fukang are facing 25% wage cuts.

Jia Yueting reported to the executive chairman of the board of directors that Jia Yueting was already an official demotion, which was seen by the industry as Jia Yueting's power cut.

Several other FF core executives have been punished to varying degrees. Brian Krolicki stepped down as Chairman of FF's Board of Directors and Chairman of the Corporate Governance and Nominating Committee to become a member of the Audit and Compensation Committee of the Board, and Jordan Vogel will step down as FF's Governance and Nominating Committee as Lead Independent Director. Jordan Vogel, as lead independent director, will receive an additional $27,500 a year in a salary.

In addition, Scott Vogel will become chairman of the Audit Committee, Corporate Governance and Nominating Committee of the Board of Directors, and Jarret Johnson, Vice President, General Counsel and Secretary, will leave the company.

Wang Jiawei, vice president of FF's global capital markets, suffered an immediate unpaid suspension, which has laid the groundwork for his subsequent departure.

Now that Jia Yueting has been dismissed from his executive post and his close confidant Wang Jiawei has left, Jia Yueting's control and voice within FF have obviously been weakened.

As of the close of the U.S. stock market on April 12, 2022, FF shares closed at $4.470, with a total market capitalization of $1.45 billion, which is more than $3 billion (about 19.4 billion yuan) from the high of $4.5 billion at the beginning of the listing.

Since its inception in 2014, FF has accumulated losses of about $2.9 billion, and now the FF, which is plagued by negativity and tight cash flow, can it still survive until the mass production of FF91?