This article first appeared on GuruFocus.
Oct 16 – Nio (NYSE:NIO) took a sharp hit Thursday after Singapore’s sovereign wealth fund, GIC, sued the Chinese EV maker for allegedly inflating revenue.
The lawsuit, filed in the Southern District of New York, accuses Nio, CEO Li Bin, and former CFO Feng Wei of misleading investors by overstating sales tied to its battery leasing affiliate, Weineng.
GIC claims Nio improperly recognized more than $600 million in revenue through Weineng, calling the firm superficially independent but effectively under Nio’s control. The complaint says those accounting moves distorted the company’s true earnings and inflated its share price.
GIC says it purchased Nio shares between August 2022 and July 2023 and suffered losses once the information surfaced. Following the report, Nio’s Hong Kong shares slid over 8%, while its Singapore-listed shares lost nearly 7%.
The case adds new scrutiny to China’s EV sector as investors grow wary of opaque financial practices and related-party structures.
Read More: Nio Stock Plunges — $600 Million Revenue Lawsuit Hits Chinese EV Maker
