“The allegations triggered renewed concerns over Nio’s governance and financial reporting, contributing to the stock’s extended decline,” said Ravi Wong, first vice president at Yan Yun Family Office. Nio’s monthly car sales figures are lagging behind major rivals, and the company’s fundamentals are “not good enough” given the continued price war in the Chinese car market, Wong added.
Singapore’s sovereign wealth fund sued Nio Inc. in US court for allegedly inflating revenue, dealing another blow to the Chinese carmaker struggling to maintain its footing in the country’s fiercely competitive auto sector.
The lawsuit, filed in August in the Southern District of New York, named the company, Chief Executive Officer Li Bin and former Chief Financial Officer Feng Wei as defendants, alleging that they made misleading statements that artificially inflated the value of Nio’s securities and causing “significant losses” to GIC.
Nio shares dropped as much as 13% in Hong Kong and 9.8% in Singapore on Thursday, as news of the legal action ignited doubts over the company’s outlook and its ability to raise more funds. Last month, Nio raised US$1.2 billion through a share sale — one of several equity offerings that have brought in billions over the years — but it has yet to post a profit since founding in 2014.
