Vietnamese EV maker VinFast Auto faces a class action lawsuit alleging violations of securities laws. The lawsuit claims that VinFast made false or misleading statements and failed to disclose crucial information about its financial strength and delivery targets.
According to the complaint, VinFast lacked sufficient capital to execute its purported growth strategy and would be unable to meet its 2023 delivery targets. It is alleged that the company overstated the strength of its business model and operational capabilities, as well as its post-merger financial prospects, BitPerfect reports.
VinFast and Black Spade Acquisition completed their business combination last August.
From announcement to closing, the deal took barely three months. This, despite the Vietnam EV maker posting lower than expected revenues for the first quarter — and after VinFast voluntarily recalled all of the first batch of vehicles it shipped to the United States last year following a safety warning issued by U.S. authorities. The recall came just two weeks after the SPAC deal was announced at an enterprise value of $27 billion.
An article published by Bloomberg on October 15, 2023, revealed that VinFast would need substantial capital to fuel its global expansion plans and would rely on financial support from its parent company and founder in the next 18 months. Following this news, the price of VinFast ordinary shares dropped by more than 18%.
Furthermore, on January 18, 2024, VinFast disclosed that it fell short of its annual delivery target, delivering only 34,855 EVs instead of the projected 40,000-50,000 units. This announcement led to a further decline in the price of VinFast ordinary shares. Read more.
