Raffles Interior chairman faces legal action over HK$10m advisory fee

Raffles Interior Limited announced it received a demand letter dated November 14, 2025, from an international law firm. The letter targets Mr. Zheng Nenghuan, the company's chairman of the board and a controlling shareholder, for an alleged breach of a "Deed of Advisory Service." Under this deed, Mr. Zheng is purportedly obliged to pay a service fee of HK$10 million.

The demand letter states that if Mr. Zheng fails to fulfill his payment obligations, the claimant has a "Disposition Right" to require him to transfer assets, including his controlling stake in Raffles Interior, to cover the service fee. The claimant has reportedly initiated legal action to enforce these rights and will exercise the Disposition Right if successful.

The board of directors has made inquiries to Mr. Zheng regarding the letter's accuracy, background, and potential implications, but as of the announcement date, he has not responded. The board views the demand letter, Mr. Zheng's non-action, and the potential exercise of the Disposition Right as material inside information. They are pursuing internal investigations and seeking legal advice on whether the Disposition Right would trigger a general offer or lead to a trading suspension. Shareholders and potential investors are advised to exercise caution.