AM GROUP (01849) announced that on September 12, 2025, the company received a letter from the Stock Exchange. According to the letter, the Stock Exchange received a complaint alleging that Ms. Zhang, Activa, and Mr. Mou entered into subsidiary arrangements regarding the transfer of 75% equity in the company held by Activa at the time (75% Equity) and the acquisition of the target company in 2020 (Opco Acquisition).

The complaint alleged that in May 2021, the company and the plaintiff requested Show Business Era (Hong Kong) Limited (Show Business Era HK) (a subsidiary indirectly held by the company after completion of the Opco Acquisition) and ROC Arise Holdings Limited (ROC Arise) (an entity controlled by Mr. Mou) to obtain two loans from the company totaling HK$16.5 million (alleged Show Business Era HK loans). The complaint further alleged that on May 5, 2021, the company and the plaintiff instructed Show Business Era HK to enter into a cooperation agreement with Charm Winner Investment Group Limited (Charm Winner), whereby Show Business Era HK engaged Charm Winner to develop a live streaming system project (alleged Charm Winner cooperation agreement), with the first portion of consideration being HK$16.5 million (alleged project consideration).

The complaint alleged that Show Business Era HK and ROC Arise never received the alleged Show Business Era HK loans. Instead, the company directly paid the alleged project consideration to Charm Winner using funds under the alleged Show Business Era HK loans, and shortly thereafter, in June 2021, the company and the plaintiff further instructed Show Business Era HK to engage another software developer (alleged developer) to develop the project; allegedly, Show Business Era HK and Charm Winner respectively entered into cooperation agreements with the alleged developer (collectively referred to as alleged developer cooperation agreements). The complaint alleged that according to the agreement, Charm Winner would pay the incurred costs to the alleged developer, and Charm Winner held HK$16.5 million for this purpose (alleged developer costs). The complaint alleged that Charm Winner never provided any services under the alleged Charm Winner cooperation agreement; and despite repeated requests from the alleged developer, Charm Winner also failed to pay the alleged developer costs under the alleged developer cooperation agreement. The complaint alleged that the alleged Show Business Era HK loans remain unpaid to date.

Therefore, the Stock Exchange has the following concerns: (a) whether the alleged Show Business Era HK loans, alleged Charm Winner cooperation agreement, and alleged developer cooperation agreements actually exist (and if so, their commercial rationale and substance), due to (i) borrowers Show Business Era HK and ROC Arise never received the alleged Show Business Era HK loans; (ii) Charm Winner never provided any services under the alleged Charm Winner cooperation agreement; (iii) the company or Show Business Era HK apparently conducted no due diligence or background checks on Charm Winner to (among other things) determine its capability and/or qualifications to provide the required services; and (iv) the reason for Charm Winner's agreement to pay the alleged developer costs on behalf of Show Business Era HK is unclear; (b) since Show Business Era HK only entered into the alleged Charm Winner cooperation agreement and alleged developer cooperation agreements according to instructions from the company and the plaintiff, it is unclear whether there are any associations or connections between the company, the plaintiff, Ms. Zhang, and Activa with Charm Winner, its directors and shareholders; it is also unclear about the purpose and related reasons for the company and/or the plaintiff to (i) instruct Show Business Era HK and (ii) introduce Charm Winner to enter into the aforementioned agreements; (c) given that the amount of the alleged Show Business Era HK loans matches the amount of the alleged project consideration and alleged developer costs, it appears that HK$16.5 million flowed from the company to Charm Winner through the alleged Show Business Era HK loans/alleged project consideration. Whether company funds were misappropriated through the above transactions and arrangements, and if so, the respective roles of Ms. Zhang, the plaintiff, Show Business Era HK, ROC Arise, and Mr. Mou constitute concerns; and (d) since the above transactions occurred around the same time as the alleged cooperation agreements, Opco Acquisition, and Activa's placement of a total of 24% shares to certain independent placees (as disclosed in the company's announcements dated July 16, 24, and 30, 2024) (Placement), whether these transactions constitute part of subsidiary arrangements between Ms. Zhang, Activa, Mr. Mou, and Opco regarding the transfer of 75% equity and the Opco Acquisition is questionable.

The Stock Exchange has formulated additional resumption guidance for resuming trading in the company's shares (Third Additional Resumption Guidance), which makes the following modifications to the independent forensic investigation specified in the Second Additional Resumption Guidance: conduct appropriate independent forensic investigation regarding arrangements related to the alleged cooperation agreements, Opco Acquisition, Placement, 2024 litigation, and 2025 litigation, as well as any other subsidiary arrangements related to these matters (including but not limited to the alleged Show Business Era HK loans, alleged Charm Winner cooperation agreement, and alleged developer cooperation agreements), assess the impact on the company's business operations and financial condition, announce investigation results, and take appropriate remedial actions. In addition, trading suspension continues.