July 16 (NBD) -- Chinese electric car maker BYD Company Limited (002594.SZ) issued the fourth statement Monday over alleged advertising fraud case, underscoring that the company is a victim of the fraud and will cooperate with the police investigations.

BYD accused certain "entities or individuals" of illegally using its name and forging the company seal and claimed that it "didn't know or was not related to the fraud case". A woman named Li Juan who was the key person in the case had been arrested by Shanghai police, according to BYD's statement.

But things hadn't cooled down as advertising suppliers involved in the case kept questioning BYD' intention to disassociate itself from the fraud case and pointing out loopholes in the carmaker's statements.

One of the advertising suppliers, Shanghai-based Jingzhi.PR, released an article responding to BYD's statements, claiming the advertising contracts involving around 30 vendors, which BYD denied awareness of, was worth 1.1 billion yuan (165 million U.S. dollars).

A source at another supplier confirmed the amount of money involved with the news portal Yicai, adding that he once dealt with Li Juan who claimed to be the marketing general manager of so-called BYD Shanghai branch. He found it unacceptable that BYD was unaware of all the advertising services worth 165 million U.S. dollars it had received for three years.

In a statement released last Thursday, BYD said Li Juan, in the name of a Shanghai-based media company Yuhong, contacted BYD in late May 2017 for the first time and offered free advertising services. Moreover, Li, using the same company name, carried forward the advertising deals between BYD and UK soccer club Arsenal in manners of "free use of resources and discounted prices" in April this year, BYD also said.

The auto maker also said in May of 2018, it started to realized that Li Juan and others rented an office in Shanghai and claimed it to be a BYD branch. Li and others forged BYD's corporate seal and conducted businesses with other entities in the name of BYD, and BYD reported the case to Shanghai police.

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However, the media company Yuhong said on Sunday it didn't authorize Li Juan to conduct any advertising service and Li Juan isn't its employee. Besides, the advertising services that Li Juan, in the name of BYD Shanghai, subcontracted to Yuhong were real business projects for BYD, in that the marketing departments of BYD were involved and collaborated with Yuhong side in the process. Yuhong held a press conference Monday, presenting evidence indicating BYD's awareness and cooperation concerning the advertising services.

Arsenal issued a statement last Friday, reading "we are investigating the situation and discussing it with senior level BYD representatives who were involved in the launch of the partnership. We will make no further comments on this matter".

A source at an advertising supplier told Yicai that Li started to provide advertising service for BYD prior to 2017. BYD accepted Li's free advertising services without investigating Li or her company, which at least indicated BYD's supervisory negligence, the source added.

An industry insider who wanted to remain anonymous said to Yicai that generally automakers contract their advertising services through open bidding and vendors compete to take the offer, which involve antecedent supervision of auditing and purchasing departments of the tenderee. It was unclear whether BYD carried out such bidding process, the insider added.

The insider pointed out that vendors often advance the advertising expenses to related parties and get payment later from the first-party companies that occasionally would be behind or even default in payment. But the BYD case was an isolated example, the person noted.

Email: gaohan@nbd.com.cn