LONDON (Alliance News) - Tanfield Group PLC said Monday its investee company Smith Electric Vehicles has filed a complaint against Five Dragons Group Electric Vehicles Ltd and Orng EV Solutions Inc, and that Smith Electric is also looking to raise funds.
Tanfield has a 5.76% interest in Smith Electric, and the current book value of Smith Electric on its balance sheet was GBP4.8 million for the interim period to end-June, against total assets of GBP41.4 million. It is currently reviewing the position of the investment in Smith and its carrying value, and expects to update shareholders with its 2015 results next month.
Smith Electric has filed a complaint in the Court of Chancery, Delaware, against the two companies, on a suit based on "fraudulent misstatements that were given that induced Smith to enter into the joint venture" with Five Dragons, as well as other commercial transactions with Five Dragons and its affiliates.
Tanfield said Smith Electric's complaint "also asserts breaches of contract and breaches of fiduciary duty" in Five Dragon's exercise of control over the joint venture.
Smith Electric is asking the court to declare the joint venture terminated or rescinded, and for the exclusive right to sell its vehicles in the US to be returned to Smith Electric.
Elsewhere Tanfield said that Smith informed it that it "urgently needed funding" and is proposing to raise funds. No further details have been provided in relation to this raising at this stage, Tanfield said.
Shares in Tanfield closed down 7.3% at 12.75 pence Monday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Tanfield (TAN)