Chinese flying taxi maker EHang denies short seller’s fraud claims after US shares plunge 63 per cent
- A report by short seller Wolfpack Research has put in question drone maker EHang’s financial data
- A US securities litigation firm said it is investigating EHang for potential violations of federal securities laws
Nasdaq-listed EHang said in a statement issued on the same day that Wolfpack’s report about the firm was “deceptive” and contained “numerous errors, unsubstantiated statements and misinterpretation of information”, without elaborating.
The report, which was published on Tuesday, described EHang as “an elaborate stock promotion, built on largely fabricated revenues based on sham sales contracts with a customer who appears to us to be more interested in helping inflate the value of its investment” in the company.
It also accused EHang’s major customer, Shanghai Kunxiang Intelligent Technology, of signing “sham sales contracts to benefit its investment” in the Guangzhou-based flying taxi maker.
00:52
Flying taxi developed by Chinese and Austrian companies takes off in Vienna
EHang’s share price closed 62.7 per cent lower at US$46.30 on Tuesday. The company had seen its stock soar since it debuted on Nasdaq in December 2019, reaching US$124.09 last Friday.
