CHIHO ENV (00976) released an announcement stating that its wholly-owned subsidiary, Taizhou Chiho Tiande Metal Co., Ltd. (Chiho Tiande Metal), has received an enforcement ruling from the Chongqing No. 5 Intermediate People's Court regarding a dispute involving an alleged loan of 70 million yuan. The ruling, dated July 9, 2026 (case number (2026) Yu 05 Zhi Bao 218), was supplemented by another ruling on July 10, 2026 (case number (2026) Yu 05 Zhi Bao 218-1).

The enforcement rulings involve Mr. Li Yizhao (Mr. Li) as the applying enforcement party, and former executive director Mr. Tu Jianhua (Mr. Tu) and Chiho Tiande Metal as the parties subject to enforcement. According to the civil complaint received by the group: (i) Mr. Li (as plaintiff) claims that on August 22, 2019, he lent 70 million yuan (the alleged loan) to Chiho Tiande Metal (as defendant) at an annual interest rate of 10%; and (ii) Mr. Tu (as defendant) confirmed in writing on April 2, 2026, that the alleged loan was jointly borrowed by him and Chiho Tiande Metal, that the principal and accumulated interest remain unpaid, and that both parties agreed to assume joint and several liability for repaying the full principal and accrued interest to Mr. Li.

Based on the enforcement rulings, certain bank accounts of Chiho Tiande Metal will be frozen for one year, with the total frozen amount capped at 120 million yuan. During this period, no encumbrances may be created on the frozen assets. As a result of the rulings, as of July 13, 2026, approximately 51 million yuan in total has been frozen from the relevant bank accounts of Chiho Tiande Metal. Chiho Tiande Metal, a company incorporated in China, is primarily engaged in the processing and sale of scrap metals.

The company firmly denies the lawsuit and intends to actively defend itself. The group has engaged Chinese legal counsel to assist with the relevant legal proceedings. According to the group's internal records, the 70 million yuan payment was made to the company by China First Private Equity Fund Co., Ltd. as repayment of investment principal and fixed returns, based on a supplementary agreement to the entrusted investment agreement dated June 14, 2018, between the company and China First Private Equity Fund Co., Ltd.

The 70 million yuan was remitted to Chiho Tiande Metal by Mr. Li on August 22, 2019. The repayment arrangement was recorded and confirmed in a four-party loan repayment confirmation letter dated August 22, 2019, signed by Mr. Li, the company, Chiho Tiande Metal, and China First Private Equity Fund Co., Ltd. The confirmation letter explicitly states that Mr. Li acknowledges the bank transfer document marked as a "loan" does not represent his provision of a loan to Chiho Tiande Metal, and that no borrowing relationship exists between Mr. Li and Chiho Tiande Metal (the confirmation letter).