Kandi Technologies Group, Inc. Class Action Lawsuit
- Company Name
- Kandi Technologies Group, Inc.
- Stock Symbol
- Class Period
- June 10, 2015 to March 13, 2017
- Central District of California
The Kandi Technologies Group, Inc. class action lawsuit charges Kandi Technologies and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Kandi Technologies’ securities between June 10, 2015 and March 13, 2017 (the “Class Period”). The Kandi Technologies class action lawsuit was commenced on June 10, 2020 in the Central District of California and is captioned Venkataraman v. Kandi Technologies Group, Inc., No. 20-cv-05171.
Kandi Technologies, through its subsidiaries, designs, produces, manufactures, and distributes electric vehicle (EV) products, EV parts, and off-road vehicles in the People’s Republic of China and internationally.
The Kandi Technologies class action lawsuit alleges that defendants made false and/or misleading statements and/or failed to disclose that: (1) certain of Kandi Technologies’ previously issued financial statements for the years ended December 31, 2015 and 2014, and the first three quarters for the year ended December 31, 2016 required adjustment; (2) Kandi Technologies lacked effective controls over its financial reporting; and (3) as a result, defendants’ statements about Kandi Technologies’ business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
On November 14, 2016, Kandi Technologies announced the abrupt resignation of Kandi Technologies’ Chief Financial Officer, defendant Cheng Wang. On this news, shares of Kandi Technologies fell by more than 10%.
Then, on March 13, 2017, Kandi Technologies filed a Form 8-K with the U.S. Securities and Exchange Commission (“SEC”) revealing that its previously issued financial statements for the years ended December 31, 2015 and 2014, and the first three quarters for the year ended December 31, 2016 would need to be restated. On this news, shares of Kandi Technologies fell approximately 6%.
On March 16, 2017, Kandi Technologies filed its Form 10-K with the SEC for the 2016 fiscal year, which restated its financial statements for fiscal year 2014 through the third quarter of 2016 and admitted that there were material weaknesses in Kandi Technologies’ internal controls. Defendants’ lack of meaningful internal controls resulted in numerous unreported related-party transactions, such as in 2010 when Kandi Technologies’ auditors at the time, AWC (CPA) Limited, discovered that Kandi Technologies’ Chief Executive Officer, defendant Xiaoming Hu, was holding $1.6 million of Kandi Technologies’ reported year-end cash balance in a personal account.
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