Vietnamese electric car manufacturer VinFast Auto and several executives have been hit with a proposed class action alleging they exaggerated the strength of VinFast’s business model and prospects following a merger with a special-purpose acquisition company last year.
According to the suit filed by shareholder Meng Qian on Friday, VinFast completed a $27 billion merger with blank-check company Black Spade Acquisition Co. last August. Qian alleges the merger’s offering documents, as well as statements VinFast made to investors, were false and misleading because they did not disclose that the company lacked sufficient capital to execute its purported growth strategy and would be unable to meet its 2023 delivery targets.
Qian claims the merger was overvalued due to the alleged misrepresentations. Shares of VinFast declined when news outlets, analysts, and the company itself acknowledged VinFast’s financial struggles, the suit alleges.
In addition to VinFast, the suit’s individual defendants include VinFast’s founder and CEO Pham Nhat Vuong, former CEO Le Thi Thu Thuy, former Chief Financial Officer David Mansfield, and four others who signed the registration statement filed in connection with the merger in June 2023.
