(Yicai Global) Aug. 13 -- Issues at Faraday Future exposed by its new competitor Evelozcity do not amount to cause of action for a lawsuit and were only revealed in an attempt to discredit the company, according to Jia Yueting's Californian carmaker.

Faraday Future operates within the law, a company representative told Yicai Global, adding that many of the allegations in the lawsuit were frivolous claims that had nothing to do with the matter at hand and were made only to impede progress of the firm's first production electric vehicle, the FF91.

The company planned to start mass production of the FF91 by the end of this year, but has been struggling to keep up with the self-imposed deadline. If it misses the cutoff date, rescue investor Evergrande Group will take control of the company from Chief Executive Jia, an embattled entrepreneur that ran Chinese conglomerate LeEco into billions of dollars of debt.

Evelozcity, which was founded by Faraday's former Chief Financial Officer Stefan Krause, filed a lawsuit against the firm last week in complaint of an employment policy that allegedly prevents former staff from poaching Faraday employees within 12 months after their own departure. It believes this breaches California state law.

But the suit dug well past human resources, divulging that Jia prevented company executives from declaring the firm's bankruptcy, lured in new employees by not disclosing the company's financial straits and was not paying staff on time.

It details how workers supposedly spend their days fending off creditors' calls and trying to determine which debts it should repay first, saying the company is barely solvent and relies on biweekly cash injections to pay wages. The firm has even pledged its Los Angeles headquarters as collateral in order to obtain a loan from a New York hedge fund, the document claims.

It also states that one of the big four accounting firms, went to audit the company in 2016, but gave up after six months as it could not stay abreast of Faraday's organizational structure.

Editor: James Boynton