Kandi Technologies Group, Inc.

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(i) 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;
(ii) 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;
(iii) 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
(iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.