JIU RONG HOLD (02358) announced that its board of directors wishes to inform the company's shareholders and potential investors that on April 20, 2026, the group received a summons and a notice to respond to a lawsuit from the Shangcheng District People's Court in Hangzhou. These legal proceedings were initiated by Bank of Communications Co., Ltd. Hangzhou Gongshu Sub-branch against Lv Yun concerning a financial loan contract dispute, with case number (2026) Zhe 0102 Min Chu No. 6794.
According to the civil complaint, the plaintiff has submitted the following claims: 1. Order the defendant to repay the loan principal of RMB 49 million, along with interest calculated provisionally until December 28, 2025, amounting to RMB 216,500 (comprising interest during the term of RMB 216,300 and compound interest of RMB 239). 2. The plaintiff requests the court to declare the RMB 45.5 million loan due in advance (effective from the date of service of the duplicate copy). The plaintiff demands that overdue interest and compound interest on all overdue principal thereafter be calculated at the then-current five-year or longer Loan Prime Rate (LPR) plus 0.6 percentage points, and then increased by a further 50%, until the date of actual repayment. 3. Order that the plaintiff shall have priority in receiving compensation from the proceeds obtained through discounting, auctioning, or selling the 31 mortgaged real estate properties under the defendant's name located in Building 6, Liuhe Jinzuo, Xihu District, Hangzhou (corresponding to 31 "Real Estate Registration Certificates"). 4. Order that litigation costs and related expenses for this case be borne by the defendant.
The court has scheduled a hearing for this case at 2:30 PM on May 13, 2026, in Courtroom No. 1 of the Fund Town People's Tribunal. Following a preliminary assessment, the board of directors believes that due to the overdue portion of the debt, the company and its subsidiaries may be liable for corresponding default penalties, late payment fees, and overdue interest. Depending on the outcome of the litigation, this could lead to an increase in the group's financial expenses, potentially affect the group's financing capabilities, and intensify cash flow pressure. This exacerbates the group's existing liquidity constraints, as previous property preservation measures related to other lawsuits have already resulted in the freezing of approximately RMB 12.7214 million in the group's bank accounts, which has imposed limitations on the allocation of daily working capital.
Furthermore, if this new lawsuit and the related overdue loans are not properly resolved in the short term, there is a risk of triggering cross-defaults among banks, which could adversely affect the group's financial condition and daily production and operations. As of the date of this announcement, the company is not aware of any cross-defaults having been triggered. As a potential mitigating factor against direct cash outflows, the plaintiff is simultaneously seeking a court order granting priority rights to the proceeds from the discounting, auction, or sale of the 31 mortgaged properties under the defendant's name.
Despite the aforementioned lawsuit and the frozen bank accounts, the group's main business segments continue to operate normally overall. The company is currently seeking advice from its PRC legal counsel regarding this litigation and is evaluating its legal and financial implications. The group's management will actively communicate with the plaintiff to explore the possibility of reaching a settlement and to mitigate any adverse impact on the group's operations. The company will closely monitor the progress of the litigation and will fulfill its information disclosure obligations in a timely manner in accordance with relevant laws and regulations.