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because of a construction contract dispute, a listed company took a county’s urban management comprehensive administrative law enforcement bureau, finance bureau, and people’s government to court.

on september 25, china international capital corporation environment (sz300145, stock price 2.36 yuan, market value 4.524 billion yuan) issued an announcement that its wholly-owned subsidiaries china construction huafan architectural design institute co., ltd. (hereinafter referred to as "huafan company") and hebei leiyuan construction engineering co., ltd. (hereinafter referred to as "leiyuan company") filed a lawsuit with the qinghe county urban management comprehensive administrative law enforcement bureau (hereinafter referred to as "qinghe county law enforcement bureau"), qinghe county finance bureau, and qinghe county people's government in the qinghe county people's court of hebei province.

on september 24, 2024, the company received a notice from the court accepting the case. the amount involved in this lawsuit is approximately 325 million yuan.

citic environment said that the lawsuit has not yet been heard in court, and there is still uncertainty about the specific impact on the company's current or future profits.

according to the announcement, in april 2018, huafan company and leiyuan company won the bid for the design and construction general contracting (epc) project of the flower sea water city project in qinghe county as a consortium; in july 2018, the plaintiff huafan company and leiyuan company signed the "construction project engineering general contracting contract" with the defendant qinghe county law enforcement bureau, stipulating that the qinghe county law enforcement bureau would contract the project to the plaintiff for implementation, and stipulating that the design fee of this project was 4.7985 million yuan, and the construction fee was tentatively set at 525.5912 million yuan; in october 2019, the plaintiff and the qinghe county law enforcement bureau signed the "qinghe county flower sea water city project design and construction general contracting (epc) contract supplementary agreement", adjusting the content and scale of the project contract. due to the increase in design fees due to major changes in the engineering design, redesign, and the addition of new areas, the total design fee should be 5.4519 million yuan after settlement.

in may 2023, the plaintiff completed all the project contents as agreed, and requested the qinghe county law enforcement bureau to organize acceptance several times since may 1, 2023, but it has not organized acceptance so far. according to the relevant provisions in the "construction project engineering general contracting contract", the defendant is deemed to have confirmed the plaintiff's completion acceptance report. leiyuan company submitted the completion settlement materials to the qinghe county law enforcement bureau on august 31, 2023, and the total settlement amount of the construction fee was approximately 310 million yuan.

however, as of the date of filing this lawsuit, the qinghe county law enforcement bureau has not proposed any modification opinions or replies to the completion settlement materials submitted by leiyuan company. according to the relevant provisions of the "construction project engineering general contracting contract", the qinghe county law enforcement bureau is deemed to have approved the settlement materials. after the qinghe county law enforcement bureau paid part of the design fees and construction fees in total, it still owed 3.55 million yuan in design fees and approximately 188 million yuan in construction fees. according to the provisions of the "construction project engineering general contracting contract" on the payment time, payment ratio and delayed payment compensation, the defendant should pay compensation to the plaintiff, which is tentatively calculated to be approximately 116 million yuan as of august 1, 2024.

on may 18, 2018, huafan company paid the defendant a performance bond, but as of the date of filing this lawsuit, the defendant still had 4.08 million yuan left unreturned. according to the relevant provisions of the "construction project engineering general contracting contract", the performance bond should be fully refunded after the project is completed. the project in question was completed on may 18, 2023, so the defendant should pay interest to huafan company based on the lpr standard from may 19, 2023.

after the plaintiff fulfilled all of its contractual obligations, it was required by the qinghe county law enforcement bureau to carry out maintenance, but the plaintiff has not paid the construction fee nor any maintenance fees, so leiyuan company will no longer carry out maintenance from november 15, 2023. according to the pricing rules for maintenance fees, the total maintenance fee from may 18, 2023 to november 15, 2023 is approximately rmb 12.93 million. in accordance with article 807 of the civil code, leiyuan company enjoys the priority right to receive payment for the construction project price for the project in question.

according to the official website of zhongjin environment, the company was established in 1991 and listed on the shenzhen stock exchange in december 2010. it is a holding subsidiary of wuxi municipal public utilities group. the company is mainly engaged in fluid equipment manufacturing, industrial hazardous solid waste disposal and resource utilization, and environmental engineering consulting, design, construction, and operation integrated services.

in the first half of 2024, citic environment achieved operating income of 2.205 billion yuan, a year-on-year decrease of 5.80%; and achieved net profit attributable to shareholders of listed companies of 164 million yuan, a year-on-year increase of 48.24%.

according to the qinghe county people's government website, qinghe county is located in the southeast of hebei province, bordering shandong province across the beijing-hangzhou grand canal to the east. it covers an area of ​​502 square kilometers and has a permanent population of 422,000, an increase of 35,400 in 10 years. it is the only county in xingtai with a net population growth. qinghe has a long history and profound cultural heritage. it is a thousand-year-old county with a 5,000-year history of civilization and a 2,500-year history of city construction. qinghe is the ancestral home of the chinese zhang family and the hometown of the tiger-fighting hero wu song. it is the background of many stories in the famous novels "water margin" and "jin ping mei".

the 2023 qinghe county people's government work report showed that the county achieved a gdp of 17.29 billion yuan and public fiscal budget revenue of 1.31 billion yuan that year.