Pinestone Capital (HKG:0804) said it reached a settlement with Capital Realm Financial over a previous loan agreement, according to a Hong Kong bourse filing Wednesday.

The company had agreed to advance HK$17.8 million to Capital Realm in December 2024, of which HK$6 million was drawn as of January 2025.

At the time of the agreement, Pinestone said it believed Capital Realm was an independent third party. It later learned that Capital Realm had built a substantial stake in the company at the time of the loan and was linked to its now-terminated co-chairman Shi Zhu, who also served as an independent director at Capital Realm.

Pinestone subsequently terminated the loan and demanded repayment of HK$6.2 million in principal plus HK$690,000 in interest. The company said it has now reached a settlement and applied to the Hong Kong High Court to dismiss a winding-up petition against Capital Realm, which no longer owns shares in the company.

The firm said it is strengthening its corporate governance procedures following an internal investigation into the matter.

Shares of the company fell over 1% in late-morning trade.