A hydrogen fuel company that raked in over $70 million from the Biden administration—and is negotiating a $1.6 billion federal loan—has been hit with a class action lawsuit from investors who claim that company made "false and misleading statements" about its business prospects.
Plug Power "overstated the near-term prospects of its hydrogen production operations" in the United States and Europe, leading to "artificially inflated" stock prices, according to the federal lawsuit, filed in the Northern District of New York in March.
The complaint notes that Plug Power's financial struggles became apparent after its earnings report in November, when its leadership warned it was facing financial shortfalls and could run out of cash this year.
The news comes as the Department of Energy's Loan Programs Office is in the final stages of negotiating a $1.6 billion loan to help Plug Power build more domestic hydrogen production facilities.
Plug Power isn't the first financially troubled company with DOE funding to face legal scrutiny. Last month, the Washington Free Beacon reported that Sunnova, a solar company that was approved for a $3 billion conditional DOE loan, was sued by investors who claimed the company withheld information about its allegedly "predatory business practices against disadvantaged homeowners and communities."
The DOE's loan office has been working to fast-track the $1.6 billion funding approval for Plug Power, the Free Beacon reported in January. Last month, Plug Power also received $75 million in grants from the DOE to expand its New York manufacturing operations.
The DOE funding to Plug Power could add to concerns about conflicts of interest in the DOE loan office, a subject that is already under investigation by the department's inspector general.
The director of the DOE loan office, former green energy mogul Jigar Shah, had a prior financial relationship with Plug Power, the Free Beacon reported in January.
Before joining the Biden administration, Shah loaned $100 million to Plug Power through Generate Capital, an investment firm that he founded. Shah sold his shares in Generate when he entered the government, according to federal disclosure records.
Plug Power repaid the $100 million to Generate at a 9 percent interest rate last December, while the company was in negotiations with Shah's office for the DOE funding, according to corporate disclosure filings. The repayment was three years ahead of schedule, at a time when the hydrogen fuel company was already warning investors about its financial outlook.
Plug Power and DOE did not respond to requests for comment.