Hong Kong-listed shares of Nio plunged over 7% after Singapore’s sovereign wealth fund sued the Chinese electric vehicle maker for allegedly violating securities laws by inflating its revenues.
The lawsuit named Nio’s CEO Li Bin and former Financial Officer Feng Wei as defendants, according to a court document filed in August in the Southern District of New York court.
The complaint alleged that Nio unlawfully recognized over $600 million of leased battery revenue from “a superficially independent” battery asset firm Weineng, which was controlled by Nio, but it did not disclose its interest in the firm.
Nio “issued materially false and misleading statements and omissions that misrepresented NIO’s relationship to Weineng and the Company’s true revenue and earnings figures,” which artificially inflated the value of NIO securities, the lawsuit stated.
As a result, GIC — which purchased shares of Nio between Aug. 11, 2022 through to July 11, 2022 — suffered “tremendous losses,” according to the lawsuit.
Shares of Nio on the Singapore Exchange tumbled 7.9%.
CNBC has reached out to GIC and Nio for comment and is waiting for their response.
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Source: CNBC