SAN FRANCISCO, Jan. 20, 2021 (GLOBE NEWSWIRE) -- Hagens Berman urges Kandi Technologies Group, Inc. (NASDAQ: KNDI) investors to submit their losses now. A securities fraud class action has been filed and certain investors may have valuable claims.
Kandi Technologies Group, Inc. (KNDI) Securities Fraud Class Action:
The complaint centers on whether Kandi manipulated its financial statements, including overstating revenues.
More specifically, according to the complaint (1) Kandi artificially inflated reported revenues through undisclosed related party transactions, and (2) most of Kandi’s sales during the past year were to undisclosed related parties, indicating the lack of arms-length transactions.
But investors began to learn the truth, according to the complaint, on Nov. 30, 2020, when Hindenburg Research published a scathing lengthy forensic report based on on-the-ground inspections at Kandi’s factories and customer locations in China, interviews with over a dozen former employees, and review of numerous litigation documents and internal public records.
According to Hindenburg, Kandi engaged in a “brazen scheme” to “falsify revenue using fake sales to undisclosed affiliates.” Hindenburg reported (1) it unmasked Kandi’s top customers and found that almost 64% of Kandi’s last twelve months sales have been to undisclosed related parties, and (2) the company’s largest customer, representing about 55% of Kandi’s last twelve months sales, shares a phone number with a Kandi subsidiary and a Kandi executive. Hindenburg further concludes Kandi’s financials corroborate its concerns, noting that “[t]he company has consistently booked revenue it cannot collect, a classic hallmark of fake revenue.”
This news drove the price of Kandi shares crashing lower.
“We’re focused on, among other things, investor losses and proving Kandi engaged in revenue recognition fraud,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you are a Kandi investor, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Kandi should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email KNDI@hbsslaw.com.
About Hagens Berman
Hagens Berman is a national law firm with nine offices in eight cities around the country and eighty attorneys. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes is located at hbsslaw.com. For the latest news visit our newsroom or follow us on Twitter at @classactionlaw.
Reed Kathrein, 844-916-0895