December 11, 2020 - An investor in shares of Kandi Technologies Group, Inc. (NASDAQ: KNDI) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by Kandi Technologies Group, Inc. in connection with certain allegedly false and misleading statements made between March 15, 2019 and November 27, 2020.

China based Kandi Technologies Group, Inc., through its subsidiaries, designs, develops, manufactures, and commercializes electric vehicle (EV) products and parts and off-road vehicles in the People's Republic of China and internationally.

On November 30, 2020, a report was published entitled “Kandi: How This China-Based NASDAQ-Listed Company Used Fake Sales, EV Hype to Nab $160 Million From U.S. Investors[.]” Citing “extensive on-the-ground inspection at Kandi's factories and customer locations in China, interviews with over a dozen former employees and business partners, and review of numerous litigation documents and international public records,” the Hindenburg report alleged that almost 64% of Kandi's sales over the year have been to undisclosed related parties. The report also alleged that “[Kandi] has consistently booked revenue it cannot collect, a classic hallmark of fake revenue[.]” Shares of Kandi Technologies Group, Inc. (NASDAQ: KNDI) declined from $17.45 per share on November 24, 2020, to as low as $7.02 per share on December 2, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of Kandi Technologies Group, Inc. (NASDAQ: KNDI) common shares between March 15, 2019 and November 27, 2020, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between March 15, 2019 and November 27, 2020, the Defendants made false and/or misleading statements and/or failed to disclose that Kandi artificially inflated its reported revenues through undisclosed related party transactions, or otherwise had relationships with key customers that indicated those customers did not have an arms-length relationship with Kandi, that the majority of Kandi's sales in the past year had been to undisclosed related parties and/or parties with such a close relationship and history with Kandi that it cast doubt on the arms-length nature of their relationship, that all the foregoing, once revealed, was foreseeably likely to cast doubt on the validity of Kandi's reported revenues and, in turn, have a foreseeable negative impact on the Company's reputation and valuation, and that as a result, the Company's public statements were materially false and misleading at all relevant times.