A Chinese court this week froze $182 million in assets of Jia Yueting, the billionaire founder of tech giant LeEco and main financier of self-driving car start-up Faraday Future. But the company says that Jia’s financial woes will have “no impact” on FF’s daily operations and actually “aligns” with its immediate goal of getting its flagship vehicle, the FF 91, on the road in 2018. Okay, sure.
The entire situation is confusing. On Thursday, Jia resigned as chairman from LeEco’s publicly-listed arm, just weeks after resigning as CEO. And now, he reportedly says his main intention to focus on producing electric cars, Bloomberg reports.
“I sincerely ask everyone to give LeEco a little more time, to give LeEco’s car business a little more time,” Jia said in a Weibo post Thursday. “We’ll repay our debts to financial institutions, suppliers and everyone else.”
LeEco has slashed costs and staff since last year, and considered asset sales to address its cash crunch. But this week, a Chinese court ordered a freeze on 1.24 billion yuan ($182 million) worth of assets held by three affiliates of the company, Jia, and his wife, according to the Xinhua News Agency. The Shanghai High People’s Court’s ruling came after LeEco failed to pay interest due on loans despite several requests for repayment, prompting a Shanghai branch of creditor China Merchants Bank Co. to seek a property preservation order.
When asked, a Faraday spokesperson told Jalopnik that Jia’s mess won’t affect its ability to complete a barely-finished factory in Nevada and finish producing an electric car that it hopes to have on the road by next year.
“We are aware that YT’s equity has been frozen in China as a normal legal procedure to preserve the assets as YT’s had undertaken personal guarantee to LeEco’s mobile phone business,” the spokesperson said. “This news has no impact on FF’s daily operations, and aligns with FF’s immediate goals of diversifying FF’s investment sources, and getting FF 91 on the road within 2018.”
The spokesperson went on to remind us that LeEco and FF are “two separate companies,” which makes the rest of Jia’s statement weirder. From Bloomberg:
In his blogpost, he didn’t mention LeSee, a separate electric car being developed by the [LeEco] unit. While Jia’s a backer of Faraday Future, he said LeEco doesn’t own any shares in the carmaker.
“LeEco’s car business is sticking with its strategy, and no matter what the obstacles, they won’t detract from our dream to revolutionize the industry,” he said in his post.
But LeEco isn’t the same as Faraday? I thought?
Faraday’s spokesperson reiterated that it’s still in the process of fundraising and continues “to speak with investors in efforts to raise more than $1B and are in the process of executing the due-diligence necessary to do so.”
Jia says he’s resigning from numerous positions to focus on producing an electric car, but his money troubles keep getting worse. That makes Faraday’s goal of raising $1 billion to keep its dream alive seem farfetched as ever. Are investors really going to buy into FF if Jia’s plan is to have a bigger presence at the company?