Chanhigh Reveals RMB320.43 Million Deposit Pledges, Acknowledges Listing-Rule Breach and Proposes RMB400 Million Annual Cap under New Cross-Guarantee Deal

Bulletin Express
09/16

Chanhigh Holdings Limited (Chanhigh) has disclosed that its wholly owned subsidiary, Zhejiang Chanhigh Construction, pledged time deposits totaling RMB320.43 million between March and December 2025 to secure bank facilities for Ningbo Yinzhou Tianbin Trading. The pledges, set across ten separate agreements, carry interest rates of 1.20%-1.90% and generated RMB4.38 million in interest income; no guarantee fee was charged to the debtor.

The company confirmed that these arrangements constitute connected transactions, major transactions and “advances to an entity” under Chapters 13, 14 and 14A of the Hong Kong Listing Rules. Chanhigh conceded that it failed to obtain prior board and shareholder approval, triggering a breach of the reporting, announcement, circular and annual-review requirements. The board has formed an Independent Committee, appointed Merdeka Corporate Finance as adviser, and will seek retrospective shareholder ratification at an extraordinary general meeting (EGM).

To prevent future lapses, the group has tightened controls: dual-department transaction vetting, mandatory legal review, monthly compliance reminders and a red-alert system once utilisation reaches 90% of any cap.

Separately, on 16 September 2026 Chanhigh signed a Master Cross-Guarantee Agreement with its controlling shareholder vehicle, Chanhigh Holding Group (CHHG), effective through 31 December 2028. Key features: • CHHG may request guarantees only via pledged certificates of deposit; Chanhigh’s maximum exposure is limited to the deposit principal and accrued interest. • CHHG must fully indemnify the group against any loss; no fees will be charged either way. • The group will extend guarantees only when deposit rates exceed prevailing demand or comparable fixed-deposit rates.

Proposed annual caps for Chanhigh’s guarantees are set at RMB400 million for each of the years 2026-2028. For 2026 and 2027, the caps cover outstanding pledges of RMB320.43 million and RMB99.50 million, respectively. The cross-guarantee arrangement again triggers connected-transaction and major-transaction classifications, requiring shareholder approval at the forthcoming EGM; the reciprocal guarantees provided by CHHG to Chanhigh remain exempt under Rule 14A.90 as they are unsecured and on normal commercial terms.

Chanhigh emphasised that no payment defaults have occurred to date on the loans secured by the pledged deposits.

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