(Yicai Global) July 12 -- Nio’s shares slumped after the Chinese electric car startup said it has set up an independent committee to oversee an impartial investigation of allegations made against the company in a short-seller’s report.

Nio’s Hong Kong-traded shares [HKG: 9866] came off 6.1 percent today to close at HKD158.40 (USD20.20) each. In New York yesterday, its stock [NYSE: NIO] dropped almost 9 percent to USD20.57.

The oversight panel, comprising independent directors Denny Lee, Wu Hai and Long Yu, has hired two independent professional advisers -- an international law firm and a well-known auditor -- to assist in the investigation, Shanghai-based Nio said in a statement yesterday.

According to a report published on June 28, US short-seller Grizzly Research believes Nio has used sales to Wuhan Weineng, a joint venture in which the automaker holds a 19.8 percent stake, to inflate its earnings. Nio and other firms, including battery giant Contemporary Amperex Technology, set up Wuhan Weineng in August 2020 to rent batteries to Nio car owners.

Lee has been an independent director at Nio since September 2018. He is also an independent non-executive director and chair of the audit committees of Jianpu Technology, New Oriental Education & Technology Group and China Metal Resources Utilization.

Wu has a wealth of experience in investment and management, having served as a managing partner of Chinese healthcare fund Cenova Capital since May 2019. He has been a Nio director since July 2016.

Long, a director of Nio since last July, is the founding and managing partner of BAI Capital and also a member of the Bertelsmann Group Management Committee and a governor of China Venture Capital and Private Equity Association, the oldest venture capital and private equity trade group in the country.

Editor: Peter Thomas