Electric car startup Faraday Future is currently embroiled in a dispute with key investor Evergrande Health Industry Group, a subsidiary of property developer China Evergrande Group.
Evergrande agreed in June to purchase a 45-percent stake in Faraday Future from a company by the name of Season Smart. As part of the deal, Evergrande paid $860 million directly to Season Smart and approximately $2 billion was to be paid to Faraday Future via a payment plan running until 2020, with $700 million of the $2 billion figure to be paid up front.
Evergrande is yet to pay the $700 million so Faraday Future has started arbitration against Evergrande at the Hong Kong International Arbitration Center, Reuters reported Monday.
Evergrande said in a statement that certain obligations the $700 million payment was dependent on haven't been met by Faraday Future, and that Faraday Future CEO and main backer Jia Yueting is using his influence on Faraday Future's board to deprive Evergrande of its right as a shareholder to approve plans by Faraday Future to raise further funds.
Faraday Future in a statement posted to Chinese social media site Weibo argued that Evergrande tried to acquire control of Faraday Future's intellectual property and was trying to block the startup from raising further funds.
Faraday Future, after years of cash struggles, finally got around to building the first pre-production example of its FF91 electric crossover SUV in August at a plant in Hanford, California. Should all go to plan, the first customer deliveries are scheduled to commence in the first half of 2019.