(Yicai Global) Aug. 26 -- Faraday Future, an electric car startup founded in the US by Chinese entrepreneur Jia Yueting, will reportedly introduce an equity partnership program while Jia also assigns part of his stake in the company to a trust fund aimed at paying off his debts in China.
Jia is considering changes to Faraday Future's corporate governance, online news outlet The Paper reported, citing insiders close to the California-based company, adding that Jia will select partners from inside and beyond the firm and transfer part of the equity he holds. The plan will be announced soon.
According to the insider, after allowing partners to share the stake, Jia will keep part to set up a personal debt repayment trust fund. If the fund's value is sufficient to pay off Jia's debts after Faraday Future lists sometime in the future, he will still own a small stake in the company. Otherwise, he would not have any stake in the firm once the debt was paid, the insider added.
Jia left for the US in July 2017 in the wake of a cash crunch at his companies in China. A Shanghai court froze assets worth about CNY1.2 billion (USD174.2 million) belonging to Jia and his wife, as well as his companies. Regulators also added his name to a list of defaulters, though Jia has always claimed that he will be fully responsible for his debts in China. How much he owes remains unclear.
To ensure implementation of the partnership program, Jia may step down as chairman and chief executive of Faraday Future, according to market rumors. The insider did not specifically respond to the speculation, but sources say that auto industry executives will probably join Faraday Future, with one taking over as CEO.