GEMILANG INTL (06163) has announced that on February 11, 2026, the Group formally initiated legal proceedings in Malaysia against Mr. Peng Xinhua. The lawsuit alleges that Mr. Peng breached certain restrictive covenants contained in his letter of appointment with the Group. Mr. Peng and his daughter, Ms. Peng Huixian, are former executive directors of the Company. They resigned from their positions as executive directors of the Company and directors of its subsidiary, Gemilang Coachwork Sdn Bhd (GCSB), on January 11, 2021, and December 8, 2020, respectively.

Specifically, according to the letter of appointment and code of conduct agreed between GCSB and Mr. Peng, he had undertaken to, among other things, avoid conflicts of interest; not engage directly or indirectly in, or hold an interest in, any business that competes with GCSB's operations; and act honestly, fairly, and in the best interests of GCSB at all material times.

It is alleged that during his tenure at GCSB, Mr. Peng breached these restrictive covenants by directly and/or indirectly holding positions and/or interests in companies that compete with GCSB's business. Based on these grounds, the Company's Board of Directors has commenced legal action against Mr. Peng to seek compensation for the damages and losses suffered by the Group as a result of the alleged breaches.

The Company further reserves the right to seek redress for any losses caused by the actions of other former directors and/or employees.