Century Sunshine Group (HKG:0509) said a district government in China terminated an agreement to acquire and provide land to its non-wholly owned subsidiary, Shandong Hongri Chemical, according to a Hong Kong bourse filing Monday.

The agreement asked Shandong Hongri Chemical to relocate from an urban area to an industrial park with China's Luozhuang District to procure new land for such a purpose.

However, the Luozhuang district government terminated the agreement even though Shandong Hongri had already relocated machinery and demolished its factory for such a purpose, citing the company's failure to discharge its soil pollution investigation and remediation obligations.

Shandong Hongri Chemical has submitted an application to the Linyi municipal government asking for the termination notice to be revoked and plans to apply with China's Supreme Court for a retrial of an earlier high court ruling that held that the soil remediation issue was a prerequisite for the land transfer exchange by the Luozhuang district government.