FULLSHARE (00607) has received a summons and will resume trading on April 2nd.

FULLSHARE (00607) announced that the Board of Directors has taken note of the voluntary announcement made by C TRANSMISSION Equipment Group Limited (Stock Code: 658) (China Highways) on March 31, 2025. The announcement referred to previous announcements made by the company on November 24, 2024, February 6, 2025, March 2, 2025, and March 7, 2025 (collectively referred to as the "Previous Announcements"), which included (i) the total amount of receivables and prepayments of China Highways' related subsidiaries amounting to approximately RMB 6.64 billion (related amounts), and the independent investigation carried out by the China Highways Independent Investigation Committee regarding the related amounts and agreements; and (ii) detailed revisions by Nanjing Highways. As of the date of this announcement, China Highways is a subsidiary of the company, and the company holds 1.171 billion ordinary shares of China Highways through its wholly-owned subsidiary Five Seasons XVI Limited (Five Seasons), representing approximately 71.62% of its issued share capital. As disclosed in the China Highways announcement, China Highways and related subsidiaries believe that sufficient evidence has been collected to show a group of companies and individuals, including Mr. Fang (former executive director of China Highways), Mr. Ji Changqun (executive director and CEO of the company, Chairman of the Board of Directors), the company, and the counterparty to the agreements have been involved in a plan to defraud the related subsidiaries and misappropriate the related amounts. They further stated that the related subsidiaries filed a summons in the High Court of the Hong Kong Special Administrative Region on March 31, 2025, seeking claims against Mr. Ji Changqun, the company, and the counterparty to the agreements, among others. The company received the summons on April 1, 2025. The Board of Directors noted that the summons was issued against 30 defendants, including Mr. Ji Changqun, the company, Five Seasons, Ms. Du Wei (executive director), and Mr. Ge Jinzhu (executive director). Apart from the simple allegations made in the summons, there were no details of any claims against the defendants. Based on preliminary legal advice received by the company, the company believes that the claims are malicious, unfounded, and absurd. In addition, the following preliminary observations were made regarding the claims: 1. Based on the simplistic allegations in the summons, it is unimaginable how the 13 defendants (excluding Mr. Fang and the counterparty to the agreements) could be related to or facilitate the transfer of the related amounts to other individuals. 2. In particular, Five Seasons is merely an investment holding company with no other operations besides holding shares of China Highways. Recently, Five Seasons submitted a request to the China Highways Board of Directors to convene a special shareholder meeting to reorganize the Board. Including Five Seasons as a defendant in the claims is highly suspicious. 3. According to the provisions of Rule C1 of the Listing Rules regarding the Corporate Governance Code, the management should provide regular updates to all board members with fair and understandable evaluations of the company's performance, condition, and prospects. The audit committee of the Board should oversee the integrity of financial statements, annual reports, accounts, interim reports, and quarterly reports for publication. The Board has doubts about whether the related amounts of approximately RMB 6.64 billion were paid in a lump sum or over an extended period. Given the significance of the related amounts (representing approximately 47.7% of China Highways' comprehensive net assets value of approximately RMB 13.9 billion as of December 31, 2023), there is extreme doubt that the reasons for the related amounts were discovered only at the end of 2024, and no announcements were made by China Highways before the announcement on November 24, 2024. The Board is also concerned about whether the China Highways Board of Directors adequately fulfilled its duties when approving the full-year performance up to December 31, 2023. The Board believes that there are issues with the supervision and internal control measures over the substantial related funds disbursed: (i) The continuous supervision and/or authorization of the use of large sums of money, especially authorizing the transfer of funds to related subsidiaries, by the China Highways Board of Directors, Mr. Hu Jichun (as Chairman of the China Highways Board of Directors and CEO of China Highways responsible for managing China Highways and its subsidiaries), Mr. Hu Yueming, or any other specific directors of China Highways is questionable. It is evidently irresponsible to attribute the payment of related amounts solely to one individual or to absolve responsibility for payment due to the complicity of individuals outside the China Highways Board; instead, Mr. Hu Jichun (as Chairman and CEO of China Highways), Mr. Hu Yueming, and other members of the China Highways Board should bear primary responsibility for not fulfilling their duties adequately and leading to the payment of related amounts. The Board also noted that on March 14, 2025, the Securities and Futures Commission had initiated legal proceedings against all eight members of the former board of directors of 3DG Holdings (International) Limited (previously known as Hong Kong Resources Holdings Limited), seeking disqualification and compensation orders due to suspicions of embezzling company funds amounting to HKD 74.4 million. The China Highways Board of Directors is advised to pay special attention to similar risks. In addition to the related amounts, the Board also noted instances of poor management by the China Highways Board of Directors: 1. As announced by the company on March 7, 2025, and for the full-year ending December 31, 2024, the company had...According to the performance announcement, Nanjing Expressway (a major subsidiary of the Group) revised its rules and regulations at the end of September 2024, resulting in the company losing absolute control over the board of directors of Nanjing Expressway. In addition, the company also learned that Nanjing Gear Management and another shareholder of Nanjing Expressway (Nanjing Expressway Shareholder) entered into a concerted action agreement, under which the Nanjing Expressway Shareholder will cause its nominated directors to vote in the same manner as the nominated directors of Nanjing Gear Management at the board meetings of Nanjing Expressway. However, the concerted action agreement has protective invalidity clauses and Nanjing Expressway Shareholder has the right to terminate the concerted action agreement, which will result in Nanjing Expressway no longer being a subsidiary of the company and Nanjing Expressway's performance will no longer be consolidated into the company's financial statements.On the date of this announcement, the Company has not yet received any explanation from China High Speed regarding this matter. The revision of details (even including the Joint Action Agreement) may lead to the risk that Nanjing High Speed will no longer be a subsidiary of the Company at any time. In 2021, Nanjing High Speed renewed its gear equipment maintenance service contract with Nanjing Anweishi Transmission Technology Co., Ltd. (Anweishi), with a term from January 1, 2021 to December 31, 2025. According to this, Nanjing High Speed agreed to pay Anweishi an annual fixed maintenance service fee of RMB 175 million as compensation for providing gear equipment maintenance services. This renewal arrangement is one of the payment conditions for Anweishi to sell 51% of its equity to Shenzhen Expressway Company Limited (Stock Code: 00548). The Board understands that some selling shareholders have connections with Mr. Hu Yueming (Executive Director of China High Speed), China High Speed, and/or its subsidiaries. However, despite the Company's repeated requests, as of the date of this announcement, China High Speed has not provided sufficient information or explanations to the Company to understand the rationale for renewing the long-term service contract, setting the annual fixed maintenance service fee of RMB 175 million, especially determining whether the arrangement is in the overall interests of China High Speed and its shareholders. The Company emphasizes that it will take resolute action to protect the interests of the Company and its subsidiaries (including China High Speed), including but not limited to filing claims against individuals who breach their duties or engage in improper conduct that harms the interests of the Group. Additionally, the Company has applied to the Stock Exchange for the resumption of trading in the Company's shares from 9:00 am on April 2, 2025.