Grab faces possible investigation in US over 'misleading statements'

Singapore headquartered super-app Grab is facing possible investigation by several US law firms on whether the company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. According to a report on ST, at least eight law firms have announced their intention to investigate Grab and such investigations are not uncommon in the US and 35 such claims have been filed this year. 

In fact, most recently, Sea Group also came under investigations around “whether Sea and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices”, said Pomerantz, one of the firms looking into the matter. This was following India banning 54 apps, said the report on Bloomberg. On the back of this news, Sea's stock price fell $29.11 per share, or 18.39%.

Meanwhile, in the case of Grab, according to a statement put out by the law firms, Grab reported its fourth quarter and full year 2021 financial results where the company reported a fourth quarter loss of US$1.1 billion, and a full year loss of US$3.6 billion.  This was shortly after Grab announced its plans to go public in the US through a merger with Altimeter Growth Corp, a special purpose acquisition company (SPAC) on 13 April 2021. The transaction raised gross proceeds of US$4.5 billion is one of “the largest-ever U.S. public market debut by a Southeast Asian company”, said Robbins Geller Rudman & Dowd LLP. Grab’s common stock began trading on the NASDAQ on 2 December 2021.

The statement by Robbins Geller Rudman & Dowd also highlighted that Grab’s results were in contrast to statements made by Peter Oey, Grab’s chief financial officer, who stated earlier at the time of merger “[O]ur mobility business has been rising as lockdowns have been relaxed. Our payments business also continues to grow. We’re seeing all strong signs.”

However, during the recent results, Oey attributed the poor financial results to “invest[ing] heavily” in driver incentives and stated that it would take one or two quarters “to get that equilibrium between drivers and riders, between supply and demand.” This saw Grab's stock price declined by approximately 37%, said Robbins Geller Rudman & Dowd.

MARKETING-INTERACTIVE has reached out to Grab for a statement. 

Grab has remained bullish on its superapp ambitions in the region strengthening its position across Southeast Asia. Recently, it appointed Hardy Cao as its new head of supermarkets to ramp up its grocery delivery after Euromonitor forecasted that online penetration for grocery delivery to more than double between 2020 and 2025. Grab also recently appointed Sean Tan as head of merchant at Grab Financial Group Singapore. Tan will be working with his team to expand Grab Financial's new and existing merchant partnerships with Grab’s integrated solutions. He will also work on expanding its innovative payment solutions, GrabPay and PayLater, to cater to more consumers both online and offline. 

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