INSUBCONTINENT EXCLUSIVE:
Evergrande Health, the investor that bailed out besieged electric vehicle startup Faraday Future in a deal worth $2 billion this summer, is
now accusing it ofattempting to break an agreement it made with previous backer Season Smart
In June, Evergrande Health announced that would it take over the financial commitment made by Season Smart last November thatsaved Faraday
Future from running out of cash
Now Evergrande Health says Faraday FutureJia Yuetinghas started arbitration in Hong Kong in an attempt to renege on its agreement with
Season Smart.Evergrande Health agreed in June to buy Season Smart 45% stake in Faraday Future for $860 million, an increase over the $800
million Season Smart originally paid, and then complete the deal with additional installments of $600 million in both 2019 and 2020.But in a
new filing with the Hong Kong stock exchange first reported by Reuters, Evergrande Health says it was informed in July by Faraday Future
that the $800 million it received from Season Smart had already been spent, and that Smart King, the joint venture set up between Faraday
Future and Season Smart, had been asked to provide another $700 million
As a result, Season Smart had entered into a supplemental agreement to advance $700 million.Evergrande Health now accuses Faraday Future of
&manipulating Smart King& by using its majority seats on Smart King board of directors to begin arbitration in Hong Kong claiming that
Season Smart hasn&t fulfilled its payment conditions
Evergrande Health says Faraday Future is using this as a pretext to deprive Season Smart of its shareholder rights to approve Faraday Future
future financing plans and terminate its agreements with Season Smart.As a result, Season Smart has &engaged a team of international lawyers
and will take all necessary actions& to protect its rights, as well as Evergrande Health interests.Despite its deals with Season Smart and
Evergrande Health, The Verge reports that Faraday Future financial woes have continued, with some of its company vendors and suppliers
claiming that they have not been paid in weeks, and that Faraday is also contemplating layoffs
The Verge sources say at least three companies have filed liens with the California Secretary of State over payments owed by Faraday
Future.Meanwhile the company is facing a host of other legal and financial issues
These include a legal battle with its former CFO, Stefan Krause, who Faraday Future claims stole intellectual property (Krause has accused
Faraday Future of defamation)
Jia is also under fire over debts incurred by LeEco, the failed tech conglomerate he founded
The Chinese government froze his assets in 2017 and, in an unusual move, publicly ordered him to repay LeEco investors.TechCrunch has
contacted Faraday Future for comment.
