Yunnan Jinggu Forestry subsidiary faces new lawsuit, assets frozen

Yunnan Jinggu Forestry announced its controlled subsidiary, Tang County Huiyin Wood Co., Ltd. (Huiyin Wood), is facing new litigation involving a principal amount of CNY 500,000 plus interest. This latest case, initiated by Ma Ran, targets Huiyin Wood, its former actual controllers, and adds to an existing claim for CNY 7,076,500 plus interest. The cumulative amount under property preservation measures across all pending litigation against Huiyin Wood now totals approximately CNY 110,976,500, representing 116.69% of the company’s net assets as of the latest audited period.

The new lawsuit has led to the freezing of Huiyin Wood's bank accounts, along with the seizure of its finished goods warehouses, inventory (finished boards, particle boards, and density boards), and two production lines. These measures are expected to significantly disrupt Huiyin Wood's normal production and sales, further complicating its operational challenges. Currently, all nine of Huiyin Wood's bank accounts are frozen, and its two fiberboard and particleboard production lines have ceased operations indefinitely.

The company has formed a special team to investigate the authenticity and completeness of the loans, engaged legal counsel, and plans to pursue legal action against responsible parties to recover losses. Given the ongoing litigation and operational halts, Yunnan Jinggu Forestry's continued ability to operate is uncertain, and the impact on current and future period profits remains undetermined, pending court rulings.