(Yicai) June 16 -- Hozon New Energy Automobile, the owner of the Neta electric vehicle brand, has officially entered the bankruptcy review process, according to a notice posted on China’s centralized information platform on bankruptcy cases.

The National Enterprise Bankruptcy Information Disclosure Platform updated its information about Hozon Auto on June 13, adding Zhejiang Zicheng Law Firm as the administrator, the main person in charge of the administrator, and other data.

On May 13, the NEBIDP issued a notice that advertising agency Shanghai Yuxing Advertising had filed a bankruptcy review case against the Shanghai-based carmaker and that the case was being handled by a court in Jiaxing, Zhejiang province.

A statement purportedly from Neta claiming that Hozon Auto had entered bankruptcy proceedings started circulating on Chinese social media on June 12. But a company representative said the next day that the statement was unofficial and its authenticity could not be verified.

The statement alleged that Hozon Auto would work with leading domestic and international industrial investors to resume production, boost research and development, and expand overseas, under the supervision of the High People's Court of Zhejiang Province.

It also claimed that under the restructuring plan Hozon Auto would optimize and restructure its original management team while bringing in senior executives with experience at multinational automakers, including for the position of chief executive officer.

Moreover, the statement said Hozon Auto would ensure continued domestic and international operations, with production in Tongxiang and other locations expected to gradually resume within months. Overseas operations would remain unaffected, with key international markets, including Thailand, Indonesia, and Brazil, remaining development priorities.

On June 11, Hozon Auto's Chairman and CEO Fang Yunzhou was reportedly prevented from leaving his office by employees demanding back pay. The representative said Fang left his office under police escort, and his whereabouts are unknown. “The company is in disarray,” the person added. “We need someone to take charge.”

According to the listing prospectus filed by Hozon Auto to the Hong Kong Stock Exchange last June, the firm accumulated net losses of over CNY18.3 billion (USD2.5 billion) from 2021 to 2023. In recent years, media reports have repeatedly highlighted Hozon’s large-scale layoffs, salary cuts, delayed payments to suppliers, and production halts.

Editor: Futura Costaglione