(Yicai Global) April 8 -- Baidu's President of New Business Zhang Yaqin, previously an interim director at Chinese Tesla chaser Nio, has been named as a defendant in a class action lawsuit brought against the carmaker for making "materially false or misleading statements" in its initial public offering prospectus prior to listing in New York.

Software developer AsiaInfo Technology, where Zhang is also an independent non-executive director, has filed the suit with the Kings County Supreme Court in New York, it said in a filing to the Hong Kong Stock Exchange today. Kings County is better known as Brooklyn.

Founded in 2014 by web entrepreneur Li Bin, Nio produces two electric sports-utility vehicles at present. Baidu invested in the company in 2017 but withdrew following its September IPO. Baidu commissioned Zhang to serve as a director at Nio for several months prior to its USD1 billion IPO in September, according to the filing. He will retire from Baidu in October this year, becoming the first to exit the search giant via its new executive retirement plan.

Lawsuits like this are common against companies listing in the United States, AsiaInfo said, adding that Zhang had told the firm that the case was unfounded and would have little impact on the company.

The complaint claims Nio has canned plans to build a Shanghai factory and failed to inform investors about the impact that government subsidy cuts for electric vehicles would have on sales, according to digital media outlet KrAsia. Other defendants include Nio executives who signed the firm's Registration Statement and its IPO sponsors, including Morgan Stanley, Goldman Sachs and JP Morgan, the report added.

Editor: James Boynton