Huayi Brothers faces debt, frozen accounts, and share auctions

Huayi Brothers Media Corporation reported overdue debts totaling 52.5 million yuan as of December 10, 2025, exceeding 10% of its 2024 audited net assets. Concurrently, several bank accounts of the company and its subsidiary, Huayi Brothers Pictures Co., Ltd., have been frozen, holding combined balances of 30,078.69 yuan and $5,352.01. The company attributes these issues to tight liquidity caused by delayed cash remittances.

Further exacerbating its financial situation, the company's controlling shareholder and actual controller, Wang Zhongjun, faces a second judicial auction for 153,920,000 shares, representing 48.54% of his total holdings and 5.55% of the company’s total share capital. This auction is scheduled for December 29-30, 2025. Previous share auctions involving Wang Zhongjun and Wang Zhonglei totaling 2,259,362 and 156,962 shares, respectively, have already resulted in ownership changes.

Despite these challenges, the company states that its primary operations are proceeding normally, and the share auctions are not expected to alter its actual control or negatively impact its production and governance. However, the company acknowledges potential risks including default penalties, litigation, and the possibility of unstable control due to other major shareholder holdings.