Ballard Accused of Overstating the Operations of its China-Based Partners

According to the complaint, on September 30, 2016, Ballard Power Systems Inc. (NasdaqGM: BLDP) announced the commissioning and deployment of 12 of its fuel cell-powered buses in China. Ballard's CEO called it the "largest deployment of fuel cell buses in China's history," noting its impact on responsibly addressing air quality and stimulating local economic development.  Ballard continued to represent that the company was deploying its technologies in various parts of China in conjunction with local partners Zhongshan Broad-Ocean Motor Co., Ltd. ("Broad-Ocean") and Guangdong Synergy Ballard Hydrogen Power Co. ("Synergy"). Nearly a year later, on September 6, 2017, Ballard announced the opening of Synergy's production facility in Yunfu, noting, "With Ballard's brand strength, technology leadership and field experience, we believe the Company is uniquely positioned to address the fast-growing market for in Heavy Duty Motive applications in China and around the globe."

It came as a surprise to investors when Spruce Point Capital Management reported on January 25, 2018, that there were neither demonstration lines in Guangdong nor bus lines in service in Sanshui or Yunfu.  The report further revealed that although Ballard indicated that Broad-Ocean customer Foshan had produced 114 buses, a Foshan employee reported that far fewer buses had been produced to date and only 11 were licensed.  On this news, Ballard's stock dropped over 13% to close at $3.27 per share on January 25, 2018, and closed even lower at $3.17 per share on February 12, 2018.

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