U.S.-listed shares of Zeekr Group, the electric vehicle brand backed by Geely, fell more than 4% in pre-market trading on Monday, following reports alleging the company had overstated its sales figures in recent years.
Reuters reported on Sunday that Zeekr had been insuring unsold “0-kilometer used vehicles” in order to record them as sales ahead of actual transactions. The approach reportedly enabled the automaker to meet internal sales targets, as official figures are often derived from insurance registration data in China.
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The practice was first highlighted by China Securities Journal on Saturday, marking Zeekr as the first automaker to be publicly named in connection with these methods. The reports cited information from dealers and buyers familiar with the matter.
Zeekr has denied the accusations, describing the insured vehicles as display models. The company stated these vehicles had been insured with compulsory traffic insurance but had not been sold to consumers, nor registered with vehicle authorities. According to the company, they remain legally unregistered and qualify as new inventory.
Shares of Geely Auto, which is listed in Hong Kong, also fell following the news. The stock declined as much as 4% during the session before closing down 2.5% at HK$18.44.
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The decline in Zeekr’s shares comes shortly after the company announced a definitive agreement to merge with Geely Automobile Holdings. The move will make Zeekr a wholly owned subsidiary and result in its delisting from the New York Stock Exchange. Under the terms, Zeekr shareholders can opt to receive either $26.87 in cash per American depositary share or 12.3 Geely shares for each Zeekr ADS.
Zeekr went public in mid-2024. After an initial drop of nearly 50% to $13.00, its share price had rebounded to close at $30.07 on Friday, marking a 60% gain over the past twelve months.