(Yicai Global) Feb. 7 -- Faraday Future, set up by controversial Chinese businessman Jia Yueting, has completed an investigation into a short-seller report accusing the US electric car startup of being a "scam" and concluded that there is no evidence to back up such claims, but has admitted that some of its published sales data were incorrect and deceptive.

Faraday Future’s statement that it has 14,000 reservations for its flagship FF91 vehicle, which has yet to start mass production, was misleading because only a few hundred of those were paid-up, while the rest were unpaid indications of interest, the California-based firm said in a filing to the US Securities and Exchange Commission on Feb. 1.

But the allegations of financial fraud levelled at it by US investment advisory company J Capital Research in October last year cannot be proven, according to the independent committee set up by Faraday Future to probe the claims.

“We don’t think Faraday Future will ever sell a car,” J Capital said on Oct. 7. “So far, it’s nothing but a bucket to collect money from US investors and pour it into the black hole of debt created by its founder.”

However, the special committee uncovered some findings which it said were significant in regard to Faraday Future’s listing on the Nasdaq in July last year through a reverse merger with a special purpose acquisition company called Property Solutions Acquisition.

It was concluded that the company needs to improve its internal controls regarding financial reporting and hire additional accounting support. The report recommended that Faraday Future hires a Chief Compliance Officer who reports directly to the chair of the Audit Committee.

There has also been some high-level reshuffling. Susan Swenson, an independent member on the board of directors, is now Executive Chairperson. Chief Executive Officer Carsten Breitfield and Jia, who serves as chief product and user ecosystem officer, will report directly to Swenson. Breitfield and Jia have also had their base salary cut by 25 percent, the company added.

Faraday Future was unable to file its earnings report for the third quarter 2021 on time due to the ongoing internal investigation, it said.

Editor: Kim Taylor