(Yicai) Oct. 16 -- Neta has reportedly rebutted rumors that the electric vehicle brand of Hozon Auto has not paid the salaries of frontline staff.

The wages of Neta's frontline workers have been distributed, The Paper reported today, citing an insider. Hozon Auto is optimizing equity and adjusting the pay structure for middle management and executives, and due to the need to finalize these changes before going public, some salaries are being slightly delayed, the person added.

According to rumors circulating online earlier today, Neta did not pay last month's salaries as scheduled and owes suppliers a significant amount of money. Buyers were also advised to be cautious when purchasing Neta vehicles.

The insider did not provide details about Neta owing money to suppliers.

Tongxiang-based Hozon Auto submitted a prospectus to the Hong Kong Stock Exchange on June 26, according to the website of the bourse.

Hozon sold 152,100 Neta vehicles in 2022, up 118 percent from a year earlier, ranking top among Chinese car manufacturing startups. However, sales fell to 127,500 units last year, with the decline continuing this year.

Deliveries of Neta models tumbled 23 percent to 10,100 units last month from a year earlier and 8.1 percent on the prior month, marking the second straight month of year-on-year and month-on-month drops. In comparison, other Chinese car-making startups, including Leapmotor and Xpeng Motors, sold more than 20,000 units each in September.

Hozon's net loss was CNY6.9 billion (USD969.3 million) last year, expanding from CNY6.7 billion a year earlier and CNY4.8 billion in 2021, according to its prospectus. Its revenue rose to CNY13.6 billion (USD1.9 billion) in 2023, up from CNY13.1 billion the year before and CNY5.1 billion in 2021.

Editor: Martin Kadiev