Nio board forms independent committee to oversee probe on short-seller allegations

THE board of Chinese electric vehicle maker Nio has formed a committee comprising independent directors Denny Ting Bun Lee, Hai Wu and Yu Long to oversee an independent investigation regarding the allegations made in a report by short-seller Grizzly Research.

The short-seller claimed on Jun 28 that Nio has been “playing Valeant-esque accounting games” to inflate its revenue and boost net income margins. It also said that Nio was likely using an unconsolidated related party to exaggerate the group’s revenue and profitability, among other allegations. 

Nio announced late on Monday (Jul 11) that the independent committee has retained independent professional advisers to assist with the probe, including an international law firm and a “well-regarded” forensic accounting firm.

“The company reiterates its continued and unwavering commitment to maintaining high standards of corporate governance and internal control, as well as transparent and timely disclosure in compliance with applicable rules and regulations,” Nio added.

Nio's dual-class shares closed 3.9 per cent or US$0.84 higher at US$22.23 on Thursday, before the announcement on Jul 11. Its Class A ordinary shares on the Singapore bourse are fully fungible with its New York Stock Exchange-traded shares.

It ended Tuesday trading 8.6 per cent or US$1.92 lower at US$20.31.