Faraday Future accuses Evergrande of deliberately holding back funding to gain control of electric car start-up
Evergrande Health shares sink as much as 37 per cent on Monday, the biggest intraday drop in nearly four years
Faraday Future, the California-based electric car start-up founded by Chinese entrepreneur Jia Yueting, said on Monday that its largest shareholder Evergrande Health Industry Group had deliberately withheld promised payments and prevented it from seeking alternative financing.
The development comes after Evergrande accused FF of trying to scrap the original stake sale deal after spending the initial investment of US$800 million.
Evergrande Health, a unit of the Chinese real estate giant Evergrande Group, announced in June that it would buy a 45 per cent stake in FF for a total investment of US$2 billion, as part of the group’s diversification plan into the hi-tech industry.
As part of the deal, Evergrande fully acquired Season Smart, which owns 45 per cent of the joint venture that controls FF – Smart King. Through Season Smart, Evergrande has already made an initial investment of US$800 million in FF. It also agreed to pay another US$1.2 billion in two equal instalments in 2019 and 2020 respectively.
In August, Evergrande said the EV start-up had started assembling its first high-end car, FF91, at its US production base. FF also set up an operating headquarters in China for research and development and production in the country.
