Sovereign wealth fund GIC has filed a lawsuit in the US against China-based electric vehicle maker Nio and its executives, alleging securities fraud.
Nio is listed on three exchanges: US, Hong Kong, and Singapore. The suit was filed on Aug 28 in a New York district court.
The Edge Singapore has reached out to GIC for comments. GIC invested in Nio back in 2017, as part of a RMB600 million round.
Besides the company, defendants include CEO William Li and former CEO Feng Wei.
According to various China-based news websites including Caixin, GIC says Nio inflated its revenue and profits. It did so by setting up a battery asset company, Weineng, in partnership with other battery makers.
As described by CarNewsChina.com, the issue lies with Nio's Battery-as-a-Service, and over how revenue should be recognised.
See also: Chinese EV maker Nio delivers 34,749 vehicles in Sept, up 64.1% y-o-y
GIC's suit alleges that Weineng helped Nio recognise substantial revenue while moving battery depreciation costs off its balance sheet.
Nio's SGX quoted shares are down 2.73% to trade at US$6.77 as at 10.50 am, but up 51.8% year to date.
