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Faraday Future shareholder sues EV startup for removal of two directors

Stock Markets Sep 19, 2022 06:31PM ET
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© Reuters. Faraday Future's luxury electric car FF91 is seen at the company's headquarters in Gardena, California, U.S. November 21, 2019. REUTERS/Lucy Nicholson

(Reuters) - Faraday Future Intelligent Electric shareholder FF Top Holding has sued the electric vehicle startup seeking the removal of two board members, according to a court filing, escalating the battle for the revamp of the company's board.

The firm, which is yet to start production of its FF 91 luxury electric vehicle, has been under pressure from FF Top for the removal of executive chairperson Susan Swenson and board member Brian Krolicki.

In a lawsuit filed at the Delaware Court of Chancery on Monday, the shareholder group – which has an over 20% stake in the firm and about 36% voting rights – said that the startup is "suffering from a crisis of leadership at the board level."

FF Top added that the "current board has driven the company into the ground".

In a separate filing with the U.S. securities regulator, the shareholder said it had delivered a notice to the company nominating Li Han and Xin (Adam) He as replacements for Swenson and Krolicki.

Last month, several employees of Faraday Future had called on the board and shareholders to remove Swenson alleging that the executive chairperson had organized attempts to "push the company into bankruptcy and restructuring".

FF Top earlier this month delivered a notice to the company seeking the removal of Swenson.

The Los Angeles-based startup has been battling high costs and supply-chain disruptions that have delayed the production of its FF 91 to the fourth quarter of 2022.

Adding to the company's woes, auditor PricewaterhouseCoopers resigned last month citing the lack of effective internal controls at the company.

Faraday Future's shares have slumped about 93% since going public through a reverse merger with a blank-check firm in July last year.

Faraday Future shareholder sues EV startup for removal of two directors
 

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