HONG KONG - Singapore’s sovereign wealth fund GIC has sued Nio in a US court, accusing the Chinese electric vehicle(EV) maker and executives of violating securities laws by inflating revenues.
The lawsuit, filed in August in the Southern District of New York, named the company, its chief executive officer Li Bin and former chief financial officer Feng Wei as defendants
Nio’s Singapore-listed shares plunged on the news on Oct 16, falling as much as 13.8 per cent to US$6.00. The stock clawed back some ground to trade 8.1 per cent down at US$6.40 as at 2.48pm
GIC alleged the defendants made “materially false and/or misleading statements” about Nio’s ties to an affiliated company called Nio Battery Asset – or Weineng in Chinese – and failed to disclose key facts about its business and finances.
According to the complaint, those misstatements artificially inflated the value of Nio’s securities, causing GIC to suffer “significant losses.”
Nio operates a battery subscription model in which car buyers do not have to purchase batteries outright. Instead, they can pay a recurring fee to access the company’s network of battery-swap stations.
GIC’s suit contended that Weineng’s financial records show it bought batteries upfront from Nio, allowing Nio to immediately record the full revenue from those sales – even though the end users hadn’t yet paid for the batteries. The filing argued that such income should have been recognized gradually, not all at once.
Nio didn’t immediately...
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