(Yicai) June 18 -- GAC Aion, the electric vehicle carmaker of China’s GAC Group, has refuted online rumors that a plunging equity valuation tied to its delayed initial public offering has inflicted massive losses on employee shareholders.

“These rumors are entirely unfounded and purely malicious,” the Guangzhou-based company said in a statement released on June 16, adding that its employee equity incentive plan is being carried out in full compliance with the law and regulations.

As a core proprietary brand under GAC, the company has the full support of its parent firm, and its operations and production are proceeding smoothly, GAC Aion said.

Rumors circulating on Chinese social media have claimed that the value of the shares owned by staff through the equity incentive plan had sunk by as much as 58 percent because of the automaker's repeated IPO delays.

GAC Aion embarked on a mixed-ownership reform in 2022, with 679 employees and 115 technical staff from GAC research and development center agreeing to buy a 4.6 percent stake for nearly CNY18 billion (USD250 million). Under the deal, the funds were locked up for five years, with the investors only paying interest through last month and principal repayments scheduled to begin at the end of this month.

Recent media reports indicated that GAC Aion has informed staff that it plans to extend the principal payment deadline to next year and transfer the equity to a third party.

“GAC Aion will actively explore various capital market pathways, based on its own development needs,” its parent company told Yicai.

GAC Aion’s equity incentive plan for employees is far from unique, a representative from the company told Shanghai Securities News. Several other central state-owned enterprises in the auto sphere are advancing similar plans for their new energy businesses, the person said.

Last year, GAC Aion's sales plunged 22 percent to 374,900 vehicles, and continued to fall in the first half of the year, dropping 15 percent to 177,366 from a year earlier. GAC reported a net loss of CNY732 million (USD100 million) in the three months ended March 31 on revenue of CNY19.7 billion (USD2.7 billion), down 8 percent.

Editor: Futura Costaglione