Electric-vehicle company Faraday Future Intelligent Electric Inc. FFIE, +6.54% on Tuesday said it named Susan Swenson as executive chairperson, following the completion of an investigation by a special committee of independent company directors.
Among the focus of the committee’s investigation were “allegations of inaccurate disclosures, including claims contained in a short seller report issued during October 2021,” the company said.
According to Faraday Future, the committee found statements leading up to a business combination with special purpose acquisition company Property Solutions Acquisition Corp. that it received more than 14,000 reservations for the FF 91 vehicle were “potentially misleading.” According to the company, “only several hundred of those reservations were paid, while the others (totaling 14,000) were unpaid indications of interest.”
Among other findings were that the company’s corporate culture failed to sufficiently prioritize compliance, and that its internal controls over financial accounting and reporting require an upgrade in personnel and systems, Faraday Future said.
Other findings were included in an 8-K filing on Tuesday with the U.S. Securities and Exchange Commission.
The special committee, which was assisted by independent legal counsel Kirkland & Ellis LLP and forensic accounting firm Alvarez & Marsal, concluded that except for findings included in the 8-K, “substantive allegations of inaccurate disclosures that the special committee evaluated, including those made in the short seller report, were not supported by the evidence reviewed.”
The company said Swenson, in the newly created role of executive chairperson, will have “oversight of the senior executive leadership team.” Also, additional investigative and remedial work based on the special committee’s findings will be carried out by the executive chairperson.
Other actions being taken include a 25% annual base salary reduction for Carsten Breitfield, the company’s chief executive, and Yueting Jia, founder and chief product & user ecosystem office. They will also report directly to Swenson, Faraday Future said.