Singapore’s sovereign wealth fund has sued NIO in a US court, accusing the Chinese electric vehicle maker and executives of violating securities laws by inflating revenues, Bloomberg reported.

The lawsuit, filed in August in the Southern District of New York, named the company, Chief Executive Officer Li Bin and former Chief Financial Officer Feng Wei as defendants. NIO shares dropped as much as 9.7% in Hong Kong and 9.8% in Singapore on Thursday, and its US-listed shares sank 7.1% in overnight trading.

GIC alleged the defendants made 「materially false and/or misleading statements」 about NIO’s ties to an affiliated company called NIO Battery Asset Co. — or Weineng in Chinese — and failed to disclose key facts about its business and finances.

According to the complaint, those misstatements artificially inflated the value of NIO’s securities, causing GIC to suffer 「significant losses.」

NIO operates a battery subscription model in which car buyers don’t have to purchase batteries outright. Instead, they can pay a recurring fee to access the company’s network of battery-swap stations.

GIC’s suit contended that Weineng’s financial records show it bought batteries upfront from NIO, allowing NIO to immediately record the full revenue from those sales — even though the end users hadn’t yet paid for the batteries. The filing argued that such income should have been recognized gradually, not all at once.

NIO didn’t immediately respond to a request for comment. GIC declined to comment to Bloomberg.

The case has been stayed by a judge as it’s similar to a previous suit filed in 2022 against NIO, according to an Oct. 3 filing.

NIO, founded in 2014, was once seen as rising star in the EV industry that could eventually rival Tesla Inc. It’s known for its battery swap technology, which allows owners to switch out a depleted battery for a new one in minutes. Buyers have the option to purchase a NIO EV without the battery and instead opt for a subscription.

But this business model is capital intensive and has required building out expensive swapping stations, and the company has faced severe liquidity crises.

A 2022 report from New York-based Grizzly Research detailed these accounting practices. NIO said in response that it would launch an independent committee to investigate the claims, according to the court filings.

That led NIO’s American depositary notes to plunge, resulting in substantial losses, GIC’s filing said. The fund is seeking compensation for all losses relating to NIO’s wrongdoing and reasonable reimbursement of its legal costs, according to the documents.