HK Stock Market Move | NIO-SW(09866) closes down nearly 9%, report says Nio is being sued in the US by Singapore sovereign wealth fund GIC.

NIO-SW (09866) plunged in the afternoon, dropping nearly 13% at one point during trading. By the closing, it fell 8.99%, to 49.28 Hong Kong dollars, with a trading volume of 1.944 billion Hong Kong dollars. On the news front, according to brokerage firm China citing multiple media reports, the Singapore government investment company (GIC) has filed a lawsuit in the United States against NIO and two of its high-level executives, accusing them of securities fraud. GIC alleges that NIO and its battery asset company, CATL, inflated revenue and profits by prematurely recognizing battery sales and concealing NIO's control over CATL. The fund claims that NIO's battery replacement and leasing business model led to significant upfront revenue in the fourth quarter of 2020, doubling from the previous year, possibly requiring different accounting methods under US accounting standards. NIO insists that it has transferred battery control to CATL and fulfilled reporting obligations. GIC also claims that despite NIO holding less than 20% stake in CATL, it has substantial economic interests and operational control over NIO. The lawsuit is currently pending the outcome of related US class-action lawsuits.