Nio completes independent internal review, says short-seller’s allegations not substantiated

CHINESE electric vehicle maker Nio has substantially completed its independent internal review and concluded that allegations made in a report by short-seller Grizzly Research were “not substantiated”, it said in a bourse filing on Friday (Aug 26).

The short-seller claimed on Jun 28 that Nio had 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 on Jul 11 that its board had formed a committee comprising independent directors Denny Ting Bun Lee, Hai Wu and Yu Long to oversee an independent investigation regarding the allegations.

It said the committee had retained independent professional advisers to assist with the probe, including an international law firm and a “well-regarded” forensic accounting firm.

It then reiterated 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 shares ended 1.3 per cent or US$0.25 higher at US$19.53 on Friday, before the announcement.