Jilin Forest Industry subsidiary sues for RMB 122m in unpaid fees

Jilin Forest Industry announced that its wholly-owned subsidiary, Suzhou Industrial Park Landscape Engineering Co., Ltd. (SIPLE), has initiated litigation in the Xingtai City Economic Development Zone People's Court in Hebei Province. SIPLE is seeking payment of RMB 122,557,486.08 for engineering fees, plus overdue interest, from Dongxu Lantian Ecological Environmental Technology Co., Ltd., China Energy Engineering Group Southern Construction Investment Co., Ltd., and Southern Construction Investment Xingtai Landscape Construction Co., Ltd. The amount represents 10.12% of Jilin Forest Industry's most recent audited net assets.

The dispute arises from a subcontracting agreement for the landscape engineering sections of the Xingtai Garden Expo Park PPP project. SIPLE completed the work in August 2019, with total settlement funds amounting to RMB 272,456,486.08. To date, SIPLE has received RMB 149,899,000, leaving the outstanding balance as the subject of the lawsuit.

The case has been accepted but not yet heard, and the company has cautioned investors that the impact on current period profits is uncertain. Jilin Forest Industry will account for the matter in accordance with accounting standards.