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Faraday Future issues bombastic statement accusing former CFO of ‘malfeasance and dereliction of duty’

Tue Nov 14, 2017 9:24 pm

Faraday Future issues bombastic statement accusing former CFO of ‘malfeasance and dereliction of duty’
Stefan Krause, previously of BMW, calls the claims ‘baseless’
By Sean O'Kane on November 10, 2017 8:01 pm

Faraday Future’s concept car at CES 2016.
Hours after it was made public that struggling electric car startup Faraday Future was losing three top executives, the company is coming out swinging against the one who was most deeply involved in trying to keep the lights on. In a post on the company’s website, Faraday Future is accusing now-former CFO Stefan Krause of “malfeasance and dereliction of duty,” as well as a “possible violation of law.”

Faraday Future also claims that it terminated the executive when he left last month, as first reported by Jalopnik. The company says Krause was “hindering FF’s fundraising efforts.”

“Stefan Krause’s possible violation of law and lack of contribution to FF’s goals over the course of his leadership since March has led to severe damages to the interests of FF and its investor,” the statement says. “FF is currently taking legal actions as a result of Stefan Krause’s malfeasance and dereliction of duty.”

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The company wouldn’t specify what those “violations of law” are, and, as Jalopnik reported, no legal action has been taken yet. In a statement, Krause reinforces that he resigned from the company and called the claims “baseless and defamatory.”

Faraday Future issued a statement today that falsely described my departure from the company. The truth is that I resigned from Faraday Future on October 14, effective immediately. The company’s statement inaccurately portrays the circumstances surrounding my departure, and includes baseless and defamatory statements about me and my contributions to the company. I have retained legal counsel and will be exploring all options available to me.
A representative for Faraday Future declined to provide further details when reached for comment Friday.

Krause, a former BMW executive, was brought in to help rescue the company earlier this year as it struggled to recover from the fallout of the major financial troubles plaguing its main investor, former LeEco CEO Jia Yueting. As part of his work as both CFO and COO of Faraday Future, Krause helped the company secure a new manufacturing facility when its $1 billion effort in Nevada fell through.

Meanwhile, Krause was preparing a number of options to save the company and its goal of manufacturing an electric vehicle known as the FF91. These options ranged from capital investment, to partial acquisitions of the company’s business, to OEM partnerships, multiple sources with knowledge of the situation told The Verge.

Perhaps those could be construed as “hindering fundraising efforts.” But Yueting, who is the company’s biggest shareholder, made it difficult for Krause to pursue these options, those sources said. He wanted to protect his control over Faraday Future, a company which, despite assertions from its representatives, he manages closely.

Krause was also preparing one other option, they said: restructuring the company through Chapter 11 bankruptcy. Yueting supposedly rebuffed this option, too. With all his options exhausted, Krause resigned along with CTO Ulrich Kranz.

This account obviously contradicts the story being presented by Faraday Future. But documents surfaced earlier this week that showed what it would take to prepare Faraday Future for Chapter 11. The company told Jalopnik that the documents, “were not created by Faraday Future, nor were they created on behalf of Faraday Future or at Faraday Future’s request.”

Meanwhile, Jia Yueting (who goes by YT) sent an email to all Faraday Future employees earlier today before the company’s statement went public. Here’s the full text of that email, which was obtained by The Verge:

Dear Faradians,

I must regretfully notify you all of the following news. We will be announcing externally the termination of employment of Stefan Krause and Ulrich Kranz.

We will have a Director’s meeting 2:00PM today and be able to share more details regarding the truth and evidence of Mr.Stefan Krause’s wrong doings and the damage on the company in the last several months.

I know we have a dedicated team of more than 1,000 employees globally who continue every day, despite challenging head winds and disbelievers, to push forward with our goal of bringing FF 91 to market. This goal has never changed, and I look forward to working with each of you through the rough waters ahead.

Thank you.

I don't think this will change much for the befunked auto manufacturer :(

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