The company's former CEO has come out of hiding and accused De Tomaso's majority shareholder of shady dealings.
It's only been a few years since Italian luxury automaker De Tomaso's comeback was announced, followed by the reveal of the gorgeous P72 supercar, but things have taken an ugly turn for the worst after a new lawsuit was filed in New York federal court against the company itself and its majority shareholder, Sung-Fung "Norman" Choi, among others.
The plaintiff is Ryan Berris, who was tasked with reviving the De Tomaso company, but who now claims that he was deceived by Choi, who is also a Hong Kong financier who previously tried to break into the automotive space by purchasing forgotten brands. The explosive allegations include the fact that Choi forced Berris out of his roles as CEO, CMO, and co-owner as Choi conducted various fraudulent activities.
Things got so bad, Berris was threatened with violence before being forced into hiding for over a year prior to filing this lawsuit.
Berris successfully led the De Tomaso revival to the point where the company had secured a number of strategic hires and technical partners, and there was already an overflowing order book. Things were going very well, with De Tomaso revealing the track-only 900-horsepower P900 late last year with a V12 that could be extended all the way to 12,300 rpm. At least, they were going well on the surface, but Berris' allegations suggest otherwise.
He claims that Choi wanted to take the company public via a fraudulent SPAC process, creating false financial statements in the process to mislead customers. Bear in mind that large deposits were placed for certain vehicles, and these were non-refundable. The P72 was also expected to come to market for €750,000 - around $800,000 at current rates, which is extremely expensive but less than a third of the price of an exotic like the Bugatti Chiron.
Furthermore, products were created that did not comply with the terms that had been marketed to clients. Apollo, an automaker affiliated with De Tomaso, was being used by Choi and an associate named Michael Choi (not related), as fronts for a pump-and-dump scheme. This was intended to misrepresent the company's financial position to sell it for a higher price than it was actually worth, all of which began to erode the progress made by Berris.
"For years, I dedicated most of my waking hours to developing a credibly revived De Tomaso that was worthy of the brand's legacy," Berris told The Drive. "The client's dreams were the same as mine - to be a part of the De Tomaso tradition and bring it into the future. The sense of betrayal I felt when I realized Norman Choi did not share those aspirations but was instead misusing the company for his own financial purposes and tarnishing what I had worked so hard to create was utterly devastating. I have to stand up for myself and my clients against what Choi has wrought."
Berris said that he spent over 80 hours per week building up De Tomaso and using high-profile contacts like Roush to do so; in 2020, it was reported that the P72 with its Roush-tuned V8 would be built right here in the USA.
There were signs that all was not well earlier on, such as development money for the P72 that was never seen. The complaint includes a text exchange where Choi said he would be investing $3.1 million into De Tomaso personally, but this money actually came from a dodgy business called Sino Vision in Hong Kong, with the money reportedly laundered via the shell company into De Tomaso.
Further allegations include that Choi pressured Berris to use unreliable suppliers, that deposit-holders were lied to about timelines, and that Berris was only paid $33,000 during his time at De Tomaso even though he was promised an amount in the millions. CFO of Genesis, Samuel Lui, also colluded with Choi to deceive regulators about investment timelines, while Lui - who had no official role at De Tomaso - wanted Berris to alter financial models.
Choi and Lui decided to go ahead with the initial public offering which is when Berris was forced out. Berris refused to sign a resignation letter that would free De Tomaso of any potential claims made in the future, and that's when his reputation and safety were threatened. Berris said that Lui told him "things would not end well" if he didn't sign the letter, and that's when Berris went into hiding.
"As this lawsuit makes clear, defendants capitalized on my industry knowledge, valuable contacts, and marketing expertise to mask their true intention, which was to secure a fraudulent windfall, even if it meant tarnishing the De Tomaso brand's reputation," said Berris.
De Tomaso's revival has run into trouble before, with James Glickenhaus accusing the company of copycat designs for the P72 and for stealing the interior from Horacio Pagani. The lawsuit from Berris is far more serious and could undermine all the progress made by De Tomaso over the last couple of years.
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