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HomeBusinessExclusive: Spat among investors in yoyo electric car stock heads to court

Exclusive: Spat among investors in yoyo electric car stock heads to court

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Bob Mackin

A philanthropist who is one of the biggest shareholders in the Vancouver company planning to market Chinese-built electric cars is suing a fellow investor for defamation after being blamed for her losses.

Megan Martin, also known as Li Ma, filed the lawsuit Nov. 8 in B.C. Supreme Court against Shaughnessy resident Yan Wang, aka Marisa Wang.

Foundation CEO Genesa Greening, Megan Martin (second from left) Megan Martin, chair Karim Kassam and senior director Carleen Pauliuk (B.C. Women’s Health Foundation)

Martin claims that Wang published an article under the pseudonym Ma Mingda on WeChat and four Chinese-language websites that alleged Martin had “colluded with westerners to deceive compatriots” to invest in Electra Meccanica Vehicles Corp. (EVC).

EVC went public on the Nasdaq over-the-counter exchange in September 2017. In October 2017, Zongshen Industrial Group Co. Ltd. of Chongqing, China agreed to build 75,000 of its single-passenger Solo electric cars. A Nov. 8 EVC news release said the company plans to begin the Solo rollout in 2020 in Los Angeles.

Martin’s statement of claim said she learned of EVC in 2015 and the company became known as an investment opportunity among certain members of the Lower Mainland’s Chinese community in 2016 and 2017. Martin said she was introduced to Wang by a mutual acquaintance and, in turn, introduced Wang to EVC CEO Jerry Kroll in October 2017.

Martin claimed Wang wanted to invest $4 million in EVC, but she urged her to invest less than that. Shortly after the introduction to Kroll, Martin left on a trip to Europe, but discovered upon her return that Wang had decided to invest $1 million.

“The defendant seemed excited and pleased that she had been able to negotiate a reduced price for her shares,” according to Martin’s court filing. “The defendant thanked the plaintiff for the introduction.”

But, in July and August 2019, EVC’s share price dropped and Martin claims that Wang’s mood changed for the worse. On Oct. 3, according to Martin, Wang sent a fictitious article that she vowed to publish if Martin did not repay her investment. That article claimed Martin had sold her own shares and made a fortune, while duping others to invest in EVC.

EVC Solo

“Since Oct. 4, the defendant has embarked on a public campaign of defamation of the plaintiff,” said Martin’s filing.

None of the allegations has been proven in court. Wang has yet to file a response.

The company’s year-end report to the U.S. Securities and Exchange Commission for 2018 said Martin, her husband Yuan Sheng Zhang and their son Bo Hong Zhang together owned 14.4% (or 5.4 million shares) in EVC. Only Kroll (27.7%) and COO Henry Reisner (8.5%) owned more shares.

In 2015, Martin’s family donated $500,000 to the Richmond Hospital Foundation to buy imaging equipment. In October, Martin donated $200,000 to the B.C. Women’s Health Foundation.

The EVC board of directors includes retired Liberal Senator Jack Austin, who was president of the Canada China Business Council from 1993 to 2000, and Joanne Yan, who was involved in the Zongshen Industrial Group Co. Ltd. 49% purchase of Harbour Air. 

Last May, theBreaker.news reported that a numbered company, whose sole director is Martin, became the registered owner of a Sidaway Road mansion that was once used as an illegal casino. The transaction happened after the Director of Civil Forfeiture applied in June 2017 to seize the property from its previous owner.

On Nov. 12, EVC was trading at $2.12 per share. Prices have been on a rollercoaster over the past year. After peaking at $4.55 on Oct. 29, 2018, EVC (which trades under the symbol SOLO) plummeted to $1.35 by Feb. 12, 2019. But, two days later, it rallied to $4.81. Zongshen’s Chongqing production facility opened Feb. 22. 

For the quarter ended Sept. 30, EVC reported a net $5.3 million loss. EVC filings to the SEC said it envisions a base $19,888 price for the Solo. As of March 29, it had completed in-house production of 50 Solos and its Chinese partner had completed production of 20 pre-mass production models. The company’s showroom is in the Meccanica building near the Olympic Village. 

Kroll was a 2017 candidate for the B.C. Green Party in Vancouver-Mount Pleasant, where he finished a distant second behind the NDP’s Melanie Mark.

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