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China Fund News reporter Yishan

On August 5, *ST Jiuyou issued an announcement stating that a commercial building with 179 properties under its controlling subsidiary had been pre-sealed by the court.

179 properties were pre-seized

The announcement shows that *ST Jiuyou recently learned that due to a contract dispute between its controlling subsidiary Bozhou Zongxiang Information Technology Co., Ltd. (hereinafter referred to as Bozhou Zongxiang) and a third party, property preservation was taken. The property under the name of Bozhou Zongxiang located at S2# commercial building (a total of 179 units) of Anhui Tairui International Building Materials and Home Life Plaza, No. 200 Shuanghe Road, Yingquan District, Fuyang City, Anhui Province was pre-sealed by Qiaocheng Court.

According to the previously disclosed "Announcement of Hubei Jiuyou Investment Co., Ltd. on Major Litigation Involving Controlling Subsidiaries", in September 2020, Bozhou Zongxiang and Anhui Tairui Real Estate Co., Ltd. (hereinafter referred to as Anhui Tairui) signed the "Real Estate Transfer Agreement", stipulating that Bozhou Zongxiang would acquire the aforementioned real estate for 71.15 million yuan. In view of the fact that Anhui Tairui had previously borrowed 198 million yuan from lenders Bao Li and He Wei as a borrower, after consultation among all parties, Bozhou Zongxiang paid the above-mentioned purchase price to the payee designated by Anhui Tairui's creditor He Wei. Soon after, Bozhou Zongxiang paid the purchase price of 71.15 million yuan through bank transfer, and the payee confirmed receipt of the above-mentioned purchase price. On December 9 of the same year, the above-mentioned real estate transaction signed an online contract and completed filing at the Housing and Urban-Rural Development Bureau of Bozhou City, Anhui Province.

On December 10, 2020, *ST Jiuyou signed a "Share Transfer Agreement" with Zhang Dongqi and Bozhou Zongxiang. According to the agreement, Zhang Dongqi, the sole shareholder of Bozhou Zongxiang, transferred his legally held 90% equity in Bozhou Zongxiang to *ST Jiuyou free of charge, and *ST Jiuyou acquired the above-mentioned Bozhou Zongxiang equity held by Zhang Dongqi.

On April 17, 2021, the plaintiff He Wei and the third party Bao Li signed a "Debt Settlement Agreement" with Anhui Tairui, Li Jingkun, Shi Xingguo, and You Haitao. The agreement confirmed that on February 1, 2021, the third party Bao Li and the plaintiff He Wei paid 52 million yuan of the house purchase price to Anhui Tairui on behalf of Bozhou Zongxiang by offsetting the principal and interest of Anhui Tairui's loan. Anhui Tairui issued a certificate of settlement of the house purchase price to Bozhou Zongxiang.

On the same day, Li Ming, the former actual controller of *ST Jiuyou, and Bozhou Zongxiang, on the basis of confirming the contents of the above agreement and the certificate of house payment settlement, signed a "Repayment Agreement" with the third party Bao Li and the plaintiff He Wei to repay the purchase price of 52 million yuan and interest.

However, *ST Jiuyou stated that the "Repayment Agreement" was signed by Li Ming with Bao Li and He Wei without the knowledge of the company and Bozhou Zongxiang and without going through the Bozhou Zongxiang seal approval process.

According to the court's first-instance judgment, Li Ming and Bozhou Zongxiang must pay He Wei a principal of 33.0025 million yuan and interest, as well as preservation fees, attorney fees, etc. The second-instance court rejected the appeal and upheld the original judgment.

It will not have a significant impact on daily production and operations.

In the latest announcement, *ST Jiuyou stated that the above-mentioned sealed properties of the company were due to property preservation measures taken by the plaintiff in the lawsuit, and were not restricted from normal use, and there was no situation that caused a significant impact on the company's daily production and operations. If the court takes further measures to enforce the case, the sealed properties may be at risk of judicial disposal. The company is currently unable to determine the impact of this matter on the company's current or future profits. The company will continue to pay attention to the progress of the above matters and fulfill its information disclosure obligations in a timely manner.

According to information, *ST Jiuyou is currently specialized in comprehensive marketing services and cosmetics sales business, covering offline scene marketing and online media promotion.

In terms of performance, the company's net profit attributable to the parent company was negative for three consecutive years from 2021 to 2023. However, the performance forecast shows that in the first half of this year, the company expects to achieve a net profit attributable to the parent company's owners of about 11.4823 million yuan, and the net profit will turn losses into profits.

As of the close of August 5, *ST Jiuyou was trading at 1.21 yuan per share, down more than 53% this year. The company's latest market value is 750 million yuan.

Editor: Joey

Audit: Wooden Fish

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