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NIO-SW Once Nosedives 13% Amid Reports of Lawsuit by Singapore's GIC Over Revenue Inflation
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Following foreign media reports that Singapore's sovereign wealth fund GIC has filed a lawsuit in a US court accusing NIO-SW (09866.HK) of inflating its revenue, NIO-SW's stock price once plunged by 13% to a bottom of HKD47 after midday. It last traded at HKD48.98, down 9.55%. It is understood that GIC filed the lawsuit in New York in August, naming NIO-SW's CEO William Li and former CFO Feng Wei as defendants. GIC alleges that the defendants made material false and misleading statements regarding NIO-SW's relationship with a company called Weineng, leading to losses for GIC. Under NIO-SW's battery subscription model, car owners may pay a fee to use NIO-SW's battery swapping stations instead of buying batteries directly. GIC claims in the lawsuit that, according to Weineng's financial records, Weineng pre-purchased batteries from NIO-SW, allowing the latter to record the full revenue from these sales immediately, even if the end customers had not yet paid for the battery fees. Short-selling firm Grizzly Research released a report in 2022 detailing these accounting practices, which GIC argues led to a slump in NIO-SW's ADR (NIO.US), causing substantial losses for GIC. As a result, GIC is seeking compensation for losses related to NIO-SW's alleged misconduct. AAStocks Financial News |
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