According to the news from Zhitong Finance APP, Chiho Env (00976) announces that on November 4, 2024, board members received an email from an alleged manager, along with a notice (the manager's notice) informing the board members of the following.

Longxin Restructuring Company has signed a restructuring investment agreement with investors, according to which the investors agree to acquire certain assets from Longxin Restructuring Company, including approximately 0.477 billion ordinary shares of the company (the target shares, accounting for about 29.72% of the company's issued share capital as of the date of this announcement); the manager will change the composition of the board of directors; and the manager plans to complete the proposed changes in company equity and board of directors composition by the end of this year.

As disclosed in the announcement on July 29, Mr. Tu Jianhua has expressed serious concerns regarding the legality and validity of the manager's actions, stating that the actions of the manager deviate significantly from the restructuring plan approved by the court. Mr. Tu Jianhua has filed a lawsuit against the Chongqing Municipal Intermediate People's Court, questioning the validity of the restructuring investment agreement made by the manager on behalf of Longxin Restructuring Company by exercising the rights of Longxin Restructuring Company's shareholders (legal action in China).

The board of directors is aware that a minority shareholder of Yushang Investment Group Co., Ltd. (China Yushang) (which is also one of Longxin Restructuring Company and the sole shareholder of Yushang Investment Group (Hong Kong) Limited (Yushang Hong Kong)) has initiated the following legal actions in Mainland China and Hong Kong regarding the restructuring (legal actions of minority shareholders):

(1) On November 11, 2024, the minority shareholder formally applied to the Fifth Branch of the People's Procuratorate of Chongqing (the procuratorate) to supervise the implementation of the restructuring plan and to transfer the case to the public security for criminal investigation against the Chongqing Municipal Intermediate People's Court's bankruptcy court, Mr. Tu Jianhua, and the manager, claiming that the restructuring has not been conducted according to the court-approved plan, thereby seriously depriving the rights of minority shareholders.

(2) On November 15, 2024, the minority shareholder submitted a summons to the High Court of the Hong Kong Special Administrative Region (HCA 2024 No. 2276), agreeing to bring claims against the investors and the manager (collectively referred to as the 'defendants'). The minority shareholder filed lawsuits and claims against the defendants on behalf of itself and all other shareholders of China Yushang and Yushang Hong Kong, based on reasons including (i) declaring that the share transfer was executed without proper authorization and/or in violation of trust obligations, and/or facilitated by deception and/or fraudulent misrepresentation, and thus invalid; and (ii) seeking an injunction to prohibit investors from selling, transferring, pledging, or otherwise handling the target shares and exercising any voting rights attached to the target shares.

To avoid any doubts, the company is not a party to any litigation in china or legal actions by minority shareholders.

In light of the litigation in china and legal actions by minority shareholders, it is currently uncertain whether there will be changes to the company's equity and/or the composition of the board of directors. As the aforementioned managers' notice did not provide any details regarding the proposed changes to the board of directors' composition, nor identify any potential board member candidates, it is also uncertain whether the so-called changes to the board (if they occur) will have a significant adverse effect on the company's operation and business. As of the date of this announcement, the company's operation and management are stable and normal.