Hong Kong-listed shares of Nio (NYSE:NIO) fell more than 8% after Singapore’s sovereign wealth fund, GIC, filed a lawsuit against the Chinese EV maker, accusing it of inflating revenues and violating securities laws.
According to a filing in the Southern District of New York, the suit names CEO Li Bin and former CFO Feng Wei as defendants. The complaint alleged that Nio improperly recognized over $600 million in leased battery revenue through Weineng, “a superficially independent” battery asset firm that was actually controlled by Nio.
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.
GIC, which bought Nio shares between August 11, 2022, and July 11, 2023, says it suffered significant losses as a result.
Nio’s shares on the Singapore Exchange also fell 7.9% following the news.