Before taking over as CEO of electric car startup Faraday Future earlier this month, LeEco founder Jia Yueting was known as the company’s main financial backer and majority shareholder. But Jia is no longer the largest shareholder, according to three people with knowledge of the company’s finances, because he transferred his controlling shares in Faraday Future’s holding company to his nephew, Jiawei Wang, earlier this year.
Wang was named as the company’s chief financial officer in documents filed earlier this year with the California secretary of state, and as treasurer in documents filed in 2016 with the Nevada secretary of state. He does not list Faraday Future as a place of employment on his public LinkedIn profile, but he has been deeply involved in the company’s efforts to wrangle new investment, two former employees and one person close to the company tell The Verge.
A representative for Faraday Future declined to comment on the company’s financial situation. Wang hung up when reached for comment by phone.
Jia has faced increased pressure throughout 2017 as LeEco and its subsidiaries have been rocked by financial trouble. These sources say that by transferring his controlling shares in Faraday Future Holdings Limited — a corporation registered in the Cayman Islands in 2015 — to Wang, Jia is trying to keep the company from being involved in potential legal action related to his debts in China. (Faraday Future has a second corporation in the Cayman Islands that holds the company’s IP called City of Sky Limited, according to documents obtained by The Verge and the accounts of multiple former employees.)
Creditors have been hounding LeEco for unpaid debts, with some even literally camping out in the company’s lobbies. This past summer the Shanghai High People’s Court seized over $180 million of Jia’s assets, a move that multiple former Faraday Future employees say prompted the tech mogul to take up residence in California, where he currently lives, according to lawsuit documents obtained by The Verge.
Earlier this month Jia was placed on a Chinese debtor blacklist, and this week Chinese regulators ordered him to return to the country. Today, the Beijing First Intermediate People’s Court announced it seized about $200,000 of his assets in the form of bank deposits, two of his properties in Beijing, and 1 billion of his shares in Leshi Internet Information & Technology Corporation, the listed unit of LeEco in China.
This month, at the same company all-hands meeting where he told employees he was taking over as CEO, Jia announced he lined up a new investment of around $1 billion for Faraday Future. The company has used some of its newly acquired cash to start paying back supplier debts, according to multiple former employees. Before the influx, Faraday Future was in danger of not being able to pay its employee payroll. The company’s chief designer, chief financial officer, chief technology officer, and three of the five founding executives have resigned in recent months.