China Smart-Car Stock Targeted by Muddy Waters Sees Resignations

(Bloomberg) -- Link Motion Inc. Chief Executive Officer Zemin Xu and two other top executives are resigning, the latest shakeup at the Chinese connected-car company that was targeted by short-seller Muddy Waters LLC.

Jia Lian has been appointed acting CEO to restructure management as part of new agreements with Zhongzhi Hi-Tech Overseas Investment Ltd., Link Motion said in a statement late Friday. Chief Financial Officer Roland Wu and General Counsel Justin Chen, who also served as president, are also stepping down.

Shares of Link Motion, which this year changed its name from NQ Mobile Inc., have failed to recoup losses since short-seller Carson Block’s research firm, Muddy Waters, claimed in October 2013 that the company had misrepresented cash balances and fabricated revenue.

NQ Mobile, as it was then known, denied the allegations, went through several management shakeups and tried to prop up the stock with buybacks.

In its statement, Link Motion said it’s in a non-binding agreement with Zhongzhi, and is pledging senior notes and shares of NQ International Inc. as securities as it holds further discussions to extend the maturity date of a convertible note held by Zhongzhi.

Link Motion’s American depositary receipts closed Friday at 75 cents and have fallen more than 81 percent this year.

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