BRIEF: Hozon sued by supplier for unpaid bills

Chinese new energy vehicle maker Hozon New Energy Automobile Co. Ltd., parent of Neta Auto,is being sued by a supplier for unpaid debts, according to media reports. Additional reports indicate that Neta failed to pay salaries on time last month, as rumors circulated about large-scale layoffs.

Industrial robot company EFORT Intelligent Equipment (688165.SH) recently announced that Hozon’s Yichun branch owes it 48.19 million yuan ($6.7 million) for unpaid work. EFORT has filed a lawsuit over the matter, seeking repayment and compensation for additional losses.

Hozon was established in 2014 and rebranded its products under the Neta Auto name in 2019. In June this year, it applied to list in Hong Kong. According to the application documents, the company incurred a loss of 6.9 billion yuan ($958 million) last year, with cumulative losses exceeding 18.3 billion yuan over the past three years. By the end of last year, the company’s cash and cash equivalents stood at 2.8 billion yuan, down by more than half from 6.8 billion yuan in the previous year.

Recent reports emerged that Neta was facing difficulties paying its workers, with employees receiving only 50% of their September salaries. The reports suggested the company informed employees about potential layoffs this month, which could affect up to 70% of its workforce. In response to media inquiries, Neta stated that it is implementing measures such as streamlining operations, focusing on core areas, organizational optimization, and reforming salary and performance structures to build a more focused and efficient organizational framework.

By Lee Shih Ta

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