New Focus Auto Tech Holdings Limited has issued a circular outlining four intra-group loan agreements totalling RMB54.20 million granted by its wholly owned unit, New Focus Lighting & Power (Shanghai), to New Focus Technology (Shanghai). The funds, extended between 26 December 2025 and 1 May 2026, carry a fixed interest rate of 6% per annum, mature one year after drawdown and are unsecured.

The individual facilities comprise RMB5.00 million and RMB46.40 million advanced on 26 December 2025, RMB1.30 million on 1 January 2026 and RMB1.50 million on 1 May 2026. Proceeds financed the security deposit and consideration for a land parcel in Shanghai’s Qingpu District, working capital, and early construction costs for the Group’s Qingpu Smart Manufacturing Base. Funding was sourced from external borrowings later repaid with expropriation compensation, plus internal resources.

At the time of signing, the borrower was a 45%-owned connected subsidiary—10% was held by Chairman and Executive Director Mr Tong Fei—making the loans subject to Chapter 14A of the Hong Kong Listing Rules. As one applicable percentage ratio exceeded 5%, the transactions required prior announcement, circular and independent shareholder approval, which the Company failed to obtain. The oversight has been acknowledged as a compliance breach.

To regularise the position, the Board will seek retrospective approval and ratification of the loan agreements at an Extraordinary General Meeting scheduled for 15 October 2026 in Shanghai. No shareholders are required to abstain from voting. The register of members will close from 12 to 15 October 2026 for voting entitlement purposes.

An Independent Board Committee of the three independent non-executive directors, advised by Altus Capital Limited, has concluded that the loan terms are on normal commercial terms, fair and reasonable, and in the interests of independent shareholders. The Board recommends voting in favour of the resolution.

Management states that the loans will not materially affect the Group’s financial position because New Focus Technology (Shanghai) has become an indirect wholly owned subsidiary. Comprehensive remedial measures—enhanced training, updated connected persons lists, dual cross-check mechanisms and periodic audits—have been adopted to prevent recurrence of similar compliance lapses.