Faraday Future Employees Decry Bankruptcy Efforts by “Malicious Board Members”
Employee whistleblowers at California-based electric vehicle maker Faraday Future have claimed that four “unqualified” directors – Sue Swenson, Brian Krolicki, Scott Vogel and Jordan Vogel – are plotting to force the company into bankruptcy, which could occur during the next few days, according to a petition Pandaily received from a firm shareholder.
These whistleblowers, on behalf of the more than 140 employees around the world, have petitioned all Faraday Future shareholders and investors to “solemnly demand all directors to stop any irresponsible acts of maliciously pushing the company into bankruptcy,” as well as to remove the directors who had breached their fiduciary duties.
Faraday Future was successfully listed on Nasdaq on July 22, 2021 and oversubscribed to raise almost $1 billion in capital. However, its stock price has plunged from a high of $14.82 apiece to a record low of $0.88 over the past year, with nearly 95% of the market value having evaporated. Even still, the petition claims that employees are “keenly aware that the company still has enough money to maintain basic operations, complete fundraising and does not need to file bankruptcy immediately.”
In the open petition, whistleblowers said that since the successful IPO in July of last year, the four directors have initiated a special committee and appointed Sue Swenson, who was the chair of the special committee, as the new executive chairperson in relation to the internal investigation and remediation, also granting her the firm’s highest decision-making power. Jordan Vogel became the Lead Independent Director while Scott Vogel became the chair of the Audit Committee and Nomination Committee.
The directors have successfully gained control over the board and the company management. The petition asserts that the means they adopted to achieve such control include purposefully establishing a special committee to launch an internal investigation, improperly controlling the internal investigation and subsequent remediation, and committing securities fraud and other wrongdoing, for the ultimate purpose of unjust enrichment and tunneling of benefits. They further secured their long-term control of the company through intimidating, misleading and bribing other organizations or individuals.
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Faraday Future employee whistleblowers have submitted a letter to the SEC regarding securities fraud and wrongdoings, and potential violations of laws and regulations by the Board of Directors under the control of the four directors.
In addition, according to a report by Bloomberg, Faraday Future has been sued by a top shareholder group that includes its founder. FF Top Holding LLC, which owns about 20% of Faraday’s shares but has voting rights for roughly 36%, said in a lawsuit filed in Delaware Chancery Court that the startup is “suffering from a crisis of leadership at the board level.” The group is seeking the resignation or removal of two directors – Susan Swenson and Brian Krolicki.