At present we reveal what we imagine to be a brazen scheme by China-based, NASDAQ-listed Kandi Applied sciences Group to falsify income utilizing pretend gross sales to undisclosed associates.
Our investigation included in depth on-the-ground inspection at Kandi’s factories and buyer areas in China, interviews with over a dozen former workers and enterprise companions, and overview of quite a few litigation paperwork and worldwide public data.
We unmasked Kandi’s “unnamed” high prospects and located that just about 64% of Kandi’s final twelve months (LTM) gross sales have been to undisclosed associated events.
The corporate’s largest buyer, representing ~55% of final twelve months (LTM) gross sales, shares a telephone quantity with a Kandi subsidiary, and shared an govt with Kandi.
We visited the “buyer”. It’s based mostly in a tiny constructing proper subsequent to Kandi’s manufacturing facility with an indication indicating that it’s a Kandi firm. The identical constructing housed one other entity utilized by Kandi as a part of a separate pretend gross sales scheme to gather illegitimate subsidies from the Chinese language authorities, for which it was fined and sanctioned.
Kandi’s second largest buyer, representing ~9% of LTM gross sales, was as soon as wholly owned by the corporate. Its web site nonetheless integrates the Kandi brand with the shopper title. Export data present that 91% of the U.S. exports by the “buyer” went to undisclosed associated celebration entities based mostly out of Kandi’s U.S. headquarters and warehouses.
To help this, we now have photographic proof of 1 such Kandi “buyer’s” stock sitting in Kandi’s personal warehouse.