Yunnan Jinggu Forestry's subsidiary faces new lawsuit, financial strain worsens

Yunnan Jinggu Forestry Co., Ltd. announced its controlled subsidiary, Tangxian Huiyin Wood Co., Ltd. (Huiyin Wood), is a defendant in a new lawsuit seeking 2 million yuan plus interest. Filed by Yang Guofang, the suit alleges a private lending dispute involving Huiyin Wood and its former actual controller, Wang Lancun. This brings Huiyin Wood's total cumulative litigation for property preservation and private lending disputes to 32 items, with a combined claim of approximately 213.5 million yuan, representing 224.49% of the company's net assets.

The legal issues have severely impacted Huiyin Wood's operations, with all nine bank accounts frozen and both fiberboard and particleboard production lines halted. The company cannot predict when operations will resume, negatively affecting Yunnan Jinggu Forestry's production and business. Its Q3 2025 report showed continued declining operating performance, raising significant going concern issues.

Yunnan Jinggu Forestry has formed a special task force and engaged legal counsel to respond to the lawsuits. The company intends to pursue recovery from responsible parties to protect its interests. The outcome of the new lawsuit and its impact on current and future profits remain uncertain as the case has not yet gone to trial.