FF small shareholder sues U.S. Evergrande and its executives: Reclaiming control of Chinese companies

FF small shareholder sues U.S. Evergrande and its executives: Reclaiming control of Chinese companies

Original title: FF small shareholder of the United States prosecuted Evergrande and its executives, demanding the right to regaining control of Chinese companies

Author: Qian Tongxin

Faraday's future (FF) and Hengda disputes are affecting shareholders of FF. On November 14, local time, FF minority shareholders filed a class action against Evergrande Health in the California High Court of Los Angeles, accusing Evergrande Health, Xia Haijun and Peng Jianjun of attempting to take control of FF and core intellectual property rights by fraudulent means.

According to the First Financial Journalist, the representatives of the plaintiff shareholders in this lawsuit are all FF veteran employees, and obtained the corresponding shares of the parent company of FF in the equity incentive plan implemented by the company. "Evergrande and FF signed a financing agreement and pledged to fully support the development of the company and the production of FF 91, bringing benefits to the company and all shareholders," wrote a statement from the representative of FF minority shareholders obtained by First Financial Journalist. Recently, a series of facts have proved that Evergrande has repeatedly breached its contract and has not fulfilled its promise. It deliberately pushed FF to the brink of bankruptcy, forcing the company to take a series of extreme measures such as layoffs and salary cuts to save itself, which seriously infringes the vital rights and interests of many FF interest communities, including these minority shareholders. According to FF, the lawsuit involved more than 250 small shareholders who have already exercised their rights.

First Financial Journalist sent information inquiries to the email provided in the statement on behalf of FF minority shareholders. As of the time difference, no reply had been received by the time of submission.

The statement also sued Xia Haijun and Peng Jianjun, senior executives of Evergrande in FF, accusing the two executives of "being the actual executors of this series of breaches and injuries", persistently using fraudulent means to induce FF to sign agreements, refuse to pay after secretly transferring FF's Chinese assets and core intellectual property rights, and accuse their enterprises. The aim is to force FF bankruptcy by means of "cash hunger" and seize the control of FF and the world's leading core intellectual property rights.

FF's minority shareholders strongly urged Faraday Future Inc in the statement. From Hengda to recover FF's assets, business operation and management rights in China. "As the core part of China-US dual home strategy, we must not lose all the rights and interests of FF China, resolutely protect the value of FF global assets and safeguard the vital interests of all minority shareholders." The statement reads.

Because of the serious cash crisis, FF is on the verge of survival. The company has taken a series of extreme measures to save itself, such as layoffs, salary cuts, suspension of pay and retention of posts. On November 11, FF filed a new arbitration application with the Hong Kong Arbitration Center for a number of breaches of contract, such as Hengda Health Default Refusing to Release Asset Preservation. According to the information previously provided by FF to the First Financial Journalist, the arbitration result is expected to be announced on Wednesday and Thursday.

In addition, at the company's Strategy Conference on November 12, Jia Yueting publicly stated that 64% of his personal equity had been used for employee incentives. He also said that the listing plan of FF will advance to 2020, and potential investors will be the US and Middle East funds. This is Jia Yueting's first public statement after falling out with Hengda. However, in Hengda, Xu Jiayin has not expressed his attitude towards FF in public since visiting FF's factory in the United States in July.

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