Hong Kong, 13 Aug 2026—Fujing Holdings Co., Limited announced the results of an independent internal-control review triggered by earlier discloseable and connected transactions involving up to RMB56.00 million (two pledges of RMB28.00 million each) in financial assistance provided by its wholly owned unit, Fujing Agriculture, to related parties Oriental Pearl and Litai Building Materials.
Background • On 24 Jul 2024, Fujing Agriculture pledged assets to a mainland bank under two separate agreements—one securing Oriental Pearl’s loan and another for Litai Building Materials—covering the period from 19 Jul 2024 to 19 Jan 2027. • The transactions qualified as advances to connected persons under Chapters 14 and 14A of the Hong Kong Listing Rules, but requisite announcements and shareholder approvals were missed due to management oversight. • Both borrowing parties have since repaid the principal and interest in full, and the pledges have been cancelled without financial loss to Fujing.
Independent Internal-Control Review Fujing engaged Cheng & Cheng Risk Advisory Services Limited to assess internal processes across: 1) financial reporting and disclosure, 2) Listing Rules compliance on financial assistance to connected persons, and 3) corporate-seal management.
Key Findings and Remediation
1. Incomplete Financial Reporting – Asset pledges were omitted from 2024 monthly financial statements, limiting Board oversight. – Remedy: Reporting templates now mandate asset-pledge data; monthly statements with this information are submitted to the Board. Consultant confirms effective implementation.
2. Insufficient Familiarity with Listing Rules – Decisions were centralised with Chairman/CEO Zhang Yonggang, leading to non-compliance. – Remedy: Directors and senior management underwent enhanced training on Chapters 14 and 14A (completed 1 Aug 2025). No new pledge or financial assistance arrangements have been executed since.
3. Inadequate Approval Authority Matrix – Previous matrix lacked explicit guidelines for asset pledges; key executives were not informed. – Remedy: All pledges and external financial assistance now require approval from the financial controller, company secretary and full Board, with mandatory consultation of external advisers and conflict-of-interest safeguards.
4. Conflict-of-Interest Procedures Not Followed – Chairman failed to declare potential conflicts to the Audit Committee and Board. – Remedy: Refresher training on the group’s conflict-management manual was completed in Feb 2026; an annually updated Connected Persons List supports ongoing monitoring.
5. Absence of Asset Pledge Register – Lack of a central register hindered tracking of pledged assets. – Remedy: A comprehensive register was established in 2025, overseen by designated personnel; the Board now receives regular updates.
6. Weak Corporate-Seal Controls – Prior policy allowed unilateral use of seals by directors. – Remedy: Seals are centrally stored; any use requires dual approvals, including one director other than the applicant, with records logged each time.
Consultant’s Verdict and Board Position The independent consultant states that remediation measures effectively rectify identified weaknesses. The Board—including all independent non-executive directors—concurs that the strengthened controls are adequate to prevent recurrence and ensure full compliance with Listing Rules.
Ongoing Oversight Fujing Holdings will continue monitoring and refining its governance framework to maintain robust internal-control standards and regulatory compliance.