Faraday Future CEO Defies Order to Return to China

Matt Posky
by Matt Posky

Founder of the debt-laden technology firm LeEco has shirked orders from Chinese authorities to return to the country before the end of 2017, saying he needed to stay within the United States to fundraise for Faraday Future. Last week, the Beijing branch of the China Securities Regulatory Commission issued a notice ordering Jia Yueting to return to China to face the staggering debt attached to his various businesses and protect investors’ rights.

However, he claims he’s making too much headway with efforts to keep electric vehicle startup Faraday Future from sinking deeper into the toilet to head back to China. Instead, he has requested that his brother, Jia Yuemin, meet the regulator face-to-face last Friday to provide a report in response to the notice.

“I am deeply sorry and blame myself for the negative impact of LeEco’s debt crisis,” Reuters reported Jia Yueting as saying on his official WeChat account on Tuesday. “The fundraising for Faraday Future in the United States is making significant progress and there are many tasks I need to push forward in order to ensure the production and timely delivery of the FF91.”

Still, Faraday’s ability to bring its much-hyped EV to market continues to look less and less likely. The company’s financial issues are well-documented and nothing but Jia’s promises have offered any indication that the situation might be improving. LeEco previously worked jointly on an electric vehicle with FF. But its own explosive expansion into everything high-tech is the primary reason for its defaulting on payments. At its peak, LeEco owed creditors around 10 billion yuan — or $1.54 billion.

Likewise, Faraday Future also had numerous debts that went unsettled last year. This has resulted in the firm scaling back its production efforts immensely, despite big promises made in 2016. Jia has since assured the public that the capital necessary to save the automaker is all but secured.

He also points to a single late payment in July as the impetus of LeEco’s cash-flow problems, suggesting it led to the freezing of his assets and prompted a barrage of early loan recoveries. He said “false and malicious” reports have impacted the business as well. Jia was placed on an official blacklist of debt defaulters in early December, a move taken by the Chinese courts to pressure people and entities to repay outstanding debts.

[Image: LeEco]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • 1500cc 1500cc on Jan 02, 2018

    I wonder who all these investors are ... it boggles the mind that anybody could expect FF to be successful in building and selling electric cars. Selling bonds to Venezuela would be a better investment.

    • See 1 previous
    • Wsn Wsn on Jan 03, 2018

      It boggles my mind that anybody could expect Tesla to be successful. Sure it's already successful in raising money, but operationally? No way.

  • Twotone Twotone on Jan 02, 2018

    "Return to China to face the staggering debt..." really means "Have all your assests seized and spend the rest of your life in some remote prison camp never to be seen again." Similar to the VW executive who made the mistake of changing planes in the US from his Caribbean holiday and heading home to Germany. He won't be seeing home for a long time.

    • Detroit-Iron Detroit-Iron on Jan 03, 2018

      Yeah that reminded me of Mark Whitacre and the lysine price fixing. He enticed them to Hawaii for a golf trip and the skels (not least of which was Mark himself, if you have ever seen 'The Informant') involved joked on tape that they shouldn't be talking about it in the USA because the FBI might be listening.

  • ChristianWimmer The interior might be well-made, but the design is just hideous in my opinion. It’s to busy and there’s no simplistic harmony visible in it. In fact I feel that the nicest Lexus interior ever could be found in the original LS400 - because it was rather minimalistic, had pleasing lines and didn’t try to hard. It looked just right. All Lexus interiors which came after it just had bizarre styling cues and “tried to hard” if you know what I mean.
  • THX1136 As a couple of folks have mentioned wasn't this an issue with the DeLorean? I seem to recall that it was claimed you could do a 'minor' buff of the surface and it would be good as new. Guess I don't see why it's a big deal if it can be so easily rectified. Won't be any different than getting out and waxing the car every so often - part of ownership, eh.
  • ToolGuy This kind of thing might be interesting in a racing simulator.
  • FreedMike Hmmm, electric powered vibrations. Is this the long rumored move into the...ahem...adult products market?
  • MrIcky /Checks date on his calendar- nope, not April 1st.I have a transducer in my home theater seat for sub-bass. Not sure if this is patent worthy.
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