Evergrande establishes Faraday Future company in Beijing even as turmoil prevails | Digital Asia
Digital Asia News Update
Evergrande Faraday has set up a company in Beijing despite continued disputes between the company’s CEO and founder Jia Yueting and Evergrande Health Industry Group, which owns a 45% stake in the company and runs its Chinese operations.
Faraday Future set up its headquarters in the southern Chinese city of Guangzhou in August under the name Evergrande FF Intelligent Automotive China. The company also named Peng Jianjun, vice chairman of Evergrande Health and vice president of Evergrande High-Tech Group, its own chairperson.
It has now established an office in Beijing with a registered capital of RMB 50 million. The Beijing subsidiary—Evergrande Faraday Future Automotive Technology—was set up on October 16 and is wholly owned by its Guangzhou-based parent.
The move comes amid tense times for the company and may demonstrate Evergrande’s determination in continuing to promote its electric car business.
Earlier this week (October 16), more than 60 Chinese FF employees said they have not received their salaries and blamed Evergrande. The company responded by saying that it has not stopped salary payments, and that the 60 employees had not signed a revised labor contract with Evergrande Faraday.
FF CEO Jia Yueting sought arbitration to terminate the $2 billion investment deal with Evergrande Health, claiming Evergrande Health, which is a subsidiary of property developer China Evergrande Group, had not upheld its end of the deal.
The company agreed to take the stake in the EV firm in November 2017 through the purchase of Season Smart Ltd, which owns the FF stake. The investment brought the EV manufacturer back from the brink of financial ruin. Evergrande Health made a payment of $800 million. It also committed to paying an additional $1.2 billion in two installments in 2019 and 2020.
However, in July, FF requested an additional $700 million to pay suppliers after spending the initial amount. Evergrande Health agreed as long as FF met a number of undisclosed conditions.
Jia then sought to terminate the agreement through arbitration after payment wasn’t made, with Evergrande claiming that FF had not met the terms of the deal.
Evergrande has accused FF of trying to scrap the original deal after spending the initial investment of $800 million. The company also claimed Jia and FF used their majority control of the board to “manipulate” it. FF disputed the claims.