Jia Yueting was choked by the "dream"

Radar Finance and Economics Wen | Zhang Kaijing, ed. | The Deep Sea

The investigation into Jia Yueting's electric vehicle company Faraday Future (hereinafter referred to as "FF") has recent progress.

On April 15, the U.S. Securities and Exchange Commission (SEC) released a filing revealing that FF's board of directors had approved additional remedial measures on April 12, including the dismissal of founder and former CEO Jia Yueting from his executive position. Jia Yueting was replaced by Matthias Aydt, the former senior vice president in charge of business development.

It is understood that after that, Jia Yueting will continue to serve as the company's chief product officer and user ecosystem officer, and report to the executive chairman of FF. Its main responsibilities will be limited to products and mobility ecology, artificial intelligence, advanced research and development technology.

In addition to Jia Yueting, FF also took a series of disciplinary measures against other non-executive employees, including dismissal, but did not disclose their names.

Jia Yueting's job change is only a microcosm of FF's recent turmoil. Radar Finance and Economics found that all kinds of signs show that Jia Yueting and his dreams are gradually drifting away.

"A friend advised me to give up FF, sell my equity and then 'hide' in the United States in bankruptcy liquidation, but he still didn't know me well enough, and giving up and escaping was never an option in my life." Judging from Jia Yueting's repeated statements in public, after the Thunderstorm of LeTV, FF is where his hope for turning over lies.

In 2021, the FF car manufacturing process has continuously sent positive signals. In March of that year, FF announced that it had completed the winter testing and verification of the second quarter of the FF 91 pre-production car, and officially confirmed that it would be listed in the first half of 2022; in July, FF was officially listed on the NASDAQ, and Jia Yueting himself also appeared at the bell ringing site and test-riding FF 91.

The day after the FF listing, he donated one million yuan to Henan, which was in the flood situation; less than a week later, Jia Yueting revealed that the 300 invitation-based limited edition FF 91 open to a very small number of spire users around the world had been sold out; a month after the listing, in order to celebrate the completion of FF 91's 3653-kilometer long-distance road test in the United States, Jia Yueting even celebrated with FF global CEO Bi Fukang.

But the good times did not last long, and the bearish situation soon followed.

In November, FF postponed its third-quarter financial report after short-selling agency J Capital accused FF of alleged fraud, including misrepresentation of FF 91 bookings and Jia Yueting's improper profits.

J Capital said that through on-site visits and research, analysis of the company's financial report data and technical capabilities, it came to the conclusion that "FF companies cannot sell even one car".

Since then, FF has set up a special committee of the board of directors in response to the allegations in the short selling report and appointed a law firm to conduct an independent investigation.

It is worth mentioning that for J Capital's report, Jia Yueting publicly responded that "cold rice is hot and fried, nonsense" and reminded J Capital to be careful, "You are not the first time you have been punched in the face." However, later results showed that it was Jia Yueting himself who was punched in the face.

In February 2022, the FF Board of Directors Special Committee released the results of the survey showing that for FF's first model, the FF91, the company claimed to have received more than 14,000 orders, but the survey found that 14,000 were free bookings, and only 300 paid fee bookings had been paid.

In addition, the Special Committee believes that it underestimated Jia Yueting's participation in FF.

In 2019, Jia Yueting announced his resignation as CEO of FF and his transfer to FF's CPUO (Chief Product & User Experience Officer). However, the investigation found that Jia Yueting controlled the development of FF by installing relatives within the FF management and had a strong voice within FF.

After the results of the investigation were announced, it also triggered organizational turmoil within FF. Jia Yueting and Bi Fukang were not only cut by 25 percent in salaries, but also reduced their powers — Susan Swenson, an independent member of the company's board of directors, will assume the newly created executive chairmanship, to which both Bi Fukang and Jia Yueting report directly.

At the same time, Wang Jiawei, vice president of FF Capital and nephew of Jia Yueting, was also suspended. The latest news shows that the general who has led FF's financing projects many times and played an important role in the successful listing of FF has voluntarily resigned from FF.

However, even at this time, Jia Yueting still did not forget to "paint the cake". At the end of February, FF held a quasi-production car off-line conference at its Hanford plant in the United States, at which Jia Yueting and Bi Fukang introduced the production progress and final mass production time of the FF 91, but still did not introduce the details of the performance and configuration of the mass production model.

In the past 3 months, due to FF's more focus on internal investigations, the company did not submit its annual report to the NASDAQ exchange in a timely manner. On April 4, the Nasdaq exchange issued a notice to FF that its delay in filing its statements did not comply with the continued listing requirements. If FF wants to maintain its status as a public company, the company needs to file Form 10-Q for the third quarter of 2021 and Form 10-K for the third quarter of 2021 and Form 10-K for the third quarter of 2021 by May 6.

After a series of bearish bears, FF's stock price has fallen by nearly 70% since its listing in July 2021. The company's financial position is also difficult to be optimistic, after the IPO, FF only disclosed financial data once in December 2021, and the company expects the net loss in the third quarter to expand significantly to $280 million, compared with a net loss of $33 million in the same period last year.

Due to the delay in mass production, FF has been losing money since its establishment. FF said that since the company's inception, the company is expected to have a cumulative loss of about $2.8 billion as of September 30, 2021 due to negative cash flow from operating activities.

It is worth noting that on April 15, the news that the CSRC rejected Jia Yueting's application to revoke his previous administrative punishment decision and market ban decision came.

Previously, the CSRC's "Administrative Penalty Decision" and "Market Prohibition Decision" showed that due to LeTV's financial fraud for ten consecutive years from 2007 to 2016, and LeTV's non-public issuance fraud in 2016, the CSRC imposed a fine of 241 million yuan on Jia Yueting and imposed a lifetime ban on the securities market.

Jia Yueting was dissatisfied and applied to the CSRC for administrative reconsideration, requesting the revocation of the two decisions, the main reason being that the case punished the illegal acts of information disclosure that had passed the penalty limitation period, and the application basis was wrong.

The domestic heavy penalty is the head, the FF who pinned his dreams has also lost control, and Jia Yueting, who is willing to suffocate for his dreams, still has the opportunity to turn over? Radar Finance will continue to pay attention.

Note: This article is the original of Radar Finance (ID: leidacj). Unauthorized reproduction is prohibited.