Clarity Medical Lawsuit Dismissed by Court, Trading Halt Continues

Stock News
Apr 07

Clarity Medical (01406) has announced that following the Board of Directors' adoption of the findings outlined in the FTI investigative report, FTI Consulting received an email from Dr. Xie late on March 30, 2026. In the email, Dr. Xie provided FTI Consulting with affidavits sworn by himself and Mr. Jiang regarding the legal proceedings they initiated under case number HCMP 1627/2025. The originating summons for this lawsuit, along with all reliefs sought, was dismissed by the court on April 2, 2026. Dr. Xie requested that FTI Consulting review these affidavits and the accompanying documents. This marks the first instance of substantive communication from Dr. Xie to FTI Consulting. Since December 19, 2025, FTI Consulting had repeatedly invited Dr. Xie to participate in interviews; however, he neither participated in any interviews nor provided any substantive information during that period. The Board of Directors has sought legal advice regarding this subsequent development. The company's legal counsel compared the information related to corporate governance allegations in the affidavits with the information cited in the FTI investigative report and concluded that the affidavits do not contain substantive new information. Consequently, the Board resolved to issue this announcement and disclose the aforementioned subsequent events. Given that Dr. Xie has not provided substantive new information and has failed to communicate meaningfully with FTI Consulting over the past three months, the Board believes that issuing this announcement (and disclosing the subsequent events) without further delay is in the best interests of the company and all shareholders, as any further delay could adversely affect the overall plan for applying to resume trading of the company's shares. Based on the aforementioned results from FTI Consulting and as one of the conditions for the resumption of trading of the company's shares outlined in the resumption guidance, the Board has appointed one of the Big Four accounting firms to serve as an internal control advisor. This firm will conduct an independent internal control review of the company and, as far as reasonably practicable, assist the company in implementing and improving the internal control systems and procedures of the group. This is to ensure the company possesses adequate internal controls and procedures to fulfill its obligations under applicable laws, regulations, and listing rules, and to prevent a recurrence of incidents similar to those involved in the FTI investigation. The company's shares have been suspended from trading on the Stock Exchange since 9:00 a.m. on Tuesday, April 15, 2025, and will remain suspended until further notice.

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