Northern Rare Earth warned over undisclosed related-party fund occupation

China Northern Rare Earth Group High-Tech Company Limited (Northern Rare Earth) announced on October 13, 2025, that it received a warning letter from the Inner Mongolia Securities Regulatory Bureau. The regulatory action was taken due to a violation involving undisclosed non-operational fund occupation by a related party.

The investigation revealed that from February 2019 to December 2024, Northern Rare Earth's subsidiary, Baogang Group Energy Saving and Environmental Protection Technology Industrial Co., Ltd., cumulatively issued salaries, welfare benefits, and insurance premiums totaling CNY 8,948,500 to Inner Mongolia Baorong Environmental Protection New Material Co., Ltd. Of this amount, CNY 5,876,100 occurred after the subsidiary was acquired by Northern Rare Earth from its controlling shareholder in June 2021.

By December 31, 2024, Inner Mongolia Baorong Environmental Protection New Material Co., Ltd. had fully repaid the CNY 8,948,500 advanced funds. Despite the repayment, the actions constituted non-operational fund occupation by a related party, and Northern Rare Earth failed to disclose this matter as required by regulations, leading to the warning letter.