Nio hits back at fraud allegations, launches independent investigation

Nio, one of China’s largest automobile manufacturers, has responded to allegations of fraud, which were detailed in a report written by short-seller firm Grizzly Research.

The report claims that the automobile manufacturer was exaggerating its revenue and profitability through Weineng, Nio’s battery asset management provider.

Nio ES6 electric SUV semi-autonomous car on display / Photo credit: 123rf.com

Grizzly Research says that Weineng’s numbers inflated Nio’s revenue by 10% and its net income by 95%. About 60% of Nio’s 2021 earnings are attributable to Weineng, the report says.

Nio initially hit back, announcing that “the report is without merit and contains numerous errors, unsupported speculations, and misleading conclusions and interpretations regarding the information relating to the company.”

However, in its latest response, the EV firm said that it has formed an independent committee to oversee an investigation to probe into the allegations stated in the report.

Nio also said that it would provide updates on this investigation and that it will adhere to the regulations of the securities and exchange commission, as well as the New York Stock Exchange (NYSE), Exchange of Hong Kong Limited (SEHK), and Singapore Exchange Securities Trading Limited (SGX-ST), on which it is listed.

As of July 12 this year, the company’s stocks have dropped by 8.98% on NYSE, 10.3% on SEHK, and 8.64% on SGX.

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