Faraday Future CEO Defies Order to Return to China
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.
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.
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