China ZhengTong Auto Services: UPDATE INSIDE LEGAL PROCEEDINGS
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China ZhengTong Auto Services Holdings Limited
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(Incorporated under Cayman Islands Limited Liability Laws)
(Stock code: 1728)
SENIOR NOTES ISSUED IN THE UNITED STATES MATURING IN 2022
(Stock code: 40132)
UPDATE ON COURT PROCEDURES
This announcement is made by China ZhengTong Auto Services Holdings Limited (the âCompanyâ, together with its subsidiaries, the âGroupâ) in accordance with Rule 13.09 of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange Limited (the âExchangeâ) (the âListing Rulesâ) and the inside information provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
Reference is made to the Company’s announcement dated December 22, 2021 (the ” Announcement ”) regarding (among others) legal proceedings (the ” Proceedings ”). Wuhan Zhengtong appealed against the judgment of the proceedings. Unless the context otherwise requires, terms used herein will have the same meaning as those defined in the Listing.
On the afternoon of December 28, 2021, the Company was informed that a court ruling for the Alternative Procedure had been issued in favor of the claimant and against (among others) Beijing Guangze, Beijing Zunbaocheng, Beijing Baoze and Wuhan. Zhengtong by the Yangzhou Intermediate People’s Search (æ³é¢).
In accordance with the first instance judgment for the other proceeding, Beijing Guangze will pay the plaintiff approximately 1.411 billion RMB (comprising loan principal, accrued interest, late interest and compound interest) and late interest calculated at 16 , 2% per annum of RMB1 0.35 billion, the actual amount of which will increase with time and corresponding costs. Wuhan Zhengtong, having entered into an undertaking in favor of the plaintiff in March 2016 and a shortfall agreement (åè°) with the lender in March 2020 for the unpaid amounts owed by Beijing Guangze, was held jointly and severally liable for the same amount. The amount owed to the plaintiff is also secured on real estate owned by Beijing Zunbaocheng and Beijing Baoze. Beijing Zunbaocheng and Beijing Baoze have also been held jointly and severally liable for the above amount. The real estate also serves as collateral for amounts owed by Beijing Guangze to the claimant which are the subject of the proceedings, further details of which are set out in the announcement. Based on a review by Duming United Real Estate Appraisal (Beijing) Co., Ltd. (??) On March 4, 2020, the value of this security as of December 30, 2019 was approximately RMB 3.218 billion. It is not clear at this time if or when such security can be achieved.
The current board of directors of the Company is composed of directors appointed in September 2021 following the acquisition of 29.90% of the shares of the Company by Xiamen ITG Holding Group Co., Ltd. (??). The conclusion of the commitment in March 2016 and the deficit agreement and other documents in March 2020 (extension) may have constituted non-exempt financial assistance to one of the directors of the Company and / or his associates in the relevant time and, therefore, may have constituted the Company’s undisclosed related transactions at the relevant time. The Company’s current board of directors is investigating the completion of the Engagement and Shortfall Agreement and compliance with relevant compliance requirements under the Listing Rules at that time.
The first instance judgment for the other proceeding is not yet effective, and Wuhan Zhengtong intends to appeal the decision.
As the aforementioned procedure has not been definitively judged, there is considerable uncertainty. The Company will monitor legal proceedings and continue to assess the impact of the proceedings on the Group.
Shareholders and potential investors of the Company are urged to exercise caution when trading in the securities of the Company.
By order of the Council
China ZhengTong Auto Services Holdings Limited
WANG Ming Cheng
Hong Kong, December 31, 2021
As of the date of this announcement, the Board is composed of Mr. WANG Mingcheng (Chairman), Mr. WANG Muqing, Mr. Li Zhihuang and Mr. ZENG Tingyi as Executive Directors; and Dr. WONG Tin Yau, Kelvin, Dr. CAO Tong and Ms. WONG Tan Tan as independent non-executive directors.
China ZhengTong Auto Services Holdings Ltd. published this content on December 31, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on 01 January 2022 04:06:00 PM UTC.
Public now 2022
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