Chinese EV maker Nio rebounds from losses over GIC lawsuit

Shares of Chinese electric-vehicle company Nio Inc rebounded on Friday from sharp falls a day earlier after Singapore's sovereign wealth fund GIC sued it for allegedly inflating its revenue figures.

The lawsuit, filed in the Southern District of New York, alleged that Nio had issued misleading statements that artificially inflated the value of its securities, causing GIC to incur "significant losses".

GIC, one of the world's biggest sovereign wealth funds, said it bought 54.5 million Nio American depositary receipts between Aug 11, 2020, and July 11, 2022, at what it said were inflated prices.

It sought damages "in an amount to be proven at trial, including interest", as well as the cost of legal and expert fees.

Nio shares were up 2.54 percent in Singapore and 2.17 percent in Hong Kong in Friday afternoon trade.

Its stock had dropped as much as 9.8 percent in Singapore and 13 percent in Hong Kong on Thursday after media reports about the GIC lawsuit, which was filed in August and could cast a shadow over Nio's fund-raising plans.

The company has denied the allegations, saying that the lawsuit stemmed from false claims in a 2022 short-selling report by Grizzly Research.

It did not respond immediately to an AFP request for comment.

The EV maker raised $1.2 billion through a share sale last month. It is lagging behind its Chinese rivals, led by BYD and Geely.

Nio designs, develops, manufactures and sells electric vehicles. It went public in the United States in 2018 and is also listed in Hong Kong and Singapore.

"While the allegation makes a dent in Nio's corporate governance, we do not expect it to have a material impact on its operation with the ramp-up of new ES8 and Onvo L90 car production," Morningstar Research Pte Limited said in a note.

"We think vehicle sales and an improvement in profitability would likely support near-term share prices." 

AFP