Used car platform Uxin shares plunge after report urges ‘race to the exits’

Chinese used car online seller Uxin’s share price plummeted 36% on Tuesday after a short-seller issued an  report saying the company was notorious in China “as a cheat.”

J Capital Research analyst Anne Stevenson-Yang issued an report on Tuesday, saying Uxin faced a series of problems including overstated transaction volume, undisclosed debt, and faked inventory values. Stevenson-Yang estimated as many as 40% of the cars listed on Uxin were actually not sold through the platform, citing Chinese dealers they spoke to, who said they posted inventory not only on Uxin, but also on multiple websites such as Guazi, 58.com, and Che168 at the same time.

Dai Kun, founder and CEO of Uxin, was also accused of feathering his own nest by taking about $100 million in loans repaid in shares before Uxin went public in June. This was followed by another $180 million “forced” margin sale on shares offered as collateral to Huarong Asset, a Chinese financial institution now under investigation for share manipulation, in December when the shares were still locked up.

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