Changjiu Holdings (6959) has disclosed details of a connected transaction and continuing connected transaction under a Property Lease and Comprehensive Service Agreement, along with measures to address non-compliance with listing rules.

Changjiu Industrial, which is deemed a connected person by virtue of its shareholding structure involving a director and controlling shareholder, signed an agreement on 1 January 2025 to lease office space to Shanghai Bozhong, Changjiu Jinfu, and Changjiu Interconnect. The arrangement covers approximately 3,720.17 square meters of floor area from early 2025 and 3,995.17 square meters from mid-2025 onward. In addition, property management, security, cleaning, IT, and shuttle bus services will be provided until 31 December 2026. Separate staff canteen services, priced at RMB27.4 per person per day, will continue until 31 December 2025, at which point a third party is expected to take over this function.

Under the relevant accounting standards, lease payments are recognized as capital assets, and canteen fees are treated as ongoing expenses. The proposed annual cap for canteen fees in 2025 is RMB4.1 million, set with reference to historical spending and expected staffing levels. Since the applicable percentage ratios are over 0.1% but under 5%, the transactions require announcement, reporting, and annual review, but no independent shareholder approval.

Changjiu Holdings also revealed that the agreement was not announced in a timely manner due to personnel oversight, constituting a breach of the connected transaction rules. Remedial actions include distributing a regularly updated list of connected entities within the group, implementing a monthly contract review mechanism, performing thorough compliance checks, and providing internal training for directors and senior management. The relevant directors who are linked to Changjiu Industrial abstained from voting on the board resolutions.

According to the announcement, Changjiu Holdings and its subsidiaries are primarily engaged in pledged automobile monitoring services, automobile dealership operation management, and new automobile circulation services in the People’s Republic of China. The group emphasized that continuing to lease the existing premises is beneficial in light of location advantages and renovation costs avoidance.