Yunnan Jinggu Forestry subsidiary faces significant lawsuits, operations halted

Yunnan Jinggu Forestry Company Limited announced that its controlled subsidiary, Tang County Huiyin Wood Co., Ltd. (Huiyin Wood), is facing multiple lawsuits, with the latest case involving a principal amount of CNY 60 million plus accrued interest. The total value of all ongoing and prior litigations (excluding withdrawn cases) against Huiyin Wood is approximately CNY 211.5025 million. This figure represents 222.39% of the company's net assets attributable to shareholders as per the last audited report.

These legal challenges stem from various private lending disputes, leading to the freezing of all nine of Huiyin Wood's bank accounts. Consequently, both fiberboard and particleboard production lines are currently halted, casting uncertainty over the subsidiary's ability to resume operations. The company's half-year operating performance for 2025 is expected to decline further, raising concerns about its ongoing viability.

The company has formed a special task force and engaged legal counsel to actively address these matters, aiming to protect its and shareholders' legitimate interests by pursuing recovery from responsible parties. The outcomes of these cases, which mostly predate the acquisition of Huiyin Wood, are currently uncertain as they have not yet gone to trial.