Suspected Contract Fraud: ST Jinggu Atomic Company's Actual Controller Has Been Subject to Police Investigation | Quick Read Announcement

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Caixin News, March 23 — (Reporter Zhang Chenjing) A merger once held high hopes has turned into a criminal case after three years. Today, ST Jinggu (600265.SH) disclosed that its former controlling subsidiary Huiyin Wood Industry and its former actual controller Cui Huijun are suspected of contract fraud and have been filed by public security authorities.

This turmoil originated in 2022. After two consecutive years of losses, ST Jinggu planned to acquire a 51% stake in Tang County Huiyin Wood Industry Co., Ltd. (hereinafter referred to as “Huiyin Wood”) for 270 million yuan. The major asset restructuring was officially completed in 2023, and Huiyin Wood fulfilled its performance commitments that year, allowing ST Jinggu to turn profitable.

However, good times did not last. Starting from April 2025, the “hidden trouble” planted by Cui Huijun and his partner Wang Lanchun began to surface. Due to numerous private lending disputes involving the two, lenders gradually filed lawsuits against Cui Huijun, Wang Lanchun, and Huiyin Wood as co-defendants, and applied for pre-litigation property preservation. This directly led to the freezing and seizure of Huiyin Wood’s bank accounts and major assets, ultimately halting operations.

Today, ST Jinggu announced that during the acquisition in 2023, Cui Huijun and Wang Lanchun, as information disclosure obligors, failed to truthfully disclose their involvement in private lending activities using Huiyin Wood, and made false promises and guarantees regarding related matters, with deliberate concealment. Even after lawsuits erupted in April 2025, and despite multiple verifications by the company and intermediaries, they continued to hide the existence of large-scale private lending.

ST Jinggu stated that the actions of Cui Huijun and Wang Lanchun are suspected of fraudulently selling defective assets to the company. The company has reported the case to the Public Security Bureau of Tang County, Hebei Province. Recently, the company received a “Notice of Filing” from the bureau, which confirmed that Cui Huijun’s suspected contract fraud case meets the criteria for filing and has now been officially filed.

Huiyin Wood’s collapse led to ST Jinggu’s ultimate “takeover” by its controlling shareholder. In 2025, ST Jinggu announced it would transfer its 51% stake in Huiyin Wood to its controlling shareholder, Zhou Dafu Investment Co., Ltd., or its designated related parties.

However, divesting bad assets did not free ST Jinggu from its difficulties. According to the company’s earnings forecast, in 2025, ST Jinggu expects operating revenue of 175 million to 205 million yuan. After excluding non-core business income and income without commercial substance, operating revenue is projected to be 145 million to 165 million yuan. Meanwhile, the company expects net profit attributable to the parent company to be between -265 million and -215 million yuan.

It is important to note that if the lowest of the total profit, net profit, or net profit excluding non-recurring gains and losses for the most recent audited fiscal year is negative, and operating revenue is below 300 million yuan, ST Jinggu’s stock will be subject to delisting risk warning (*ST) after the annual report is disclosed.