Qianhai Health (00911) issued an announcement. On May 6, 2024, a subsidiary of the company received the Beijing No. 1...
Zhitong Finance App News, Qianhai Health (00911) issued an announcement. On May 6, 2024, a subsidiary of the company received a notice of proof (“Notice”) issued by the Beijing Fourth Intermediate People's Court on April 17, 2024. The main matter involved a contractual dispute between a supplier of Zhicheng Weiye Co., Ltd. (“Zhicheng Weiye”), a wholly-owned subsidiary of the Company, and Zhicheng Weiye and the Company. The allegation was that payment obligations under certain procurement contracts and letters of guarantee were not fulfilled.
The alleged claim relates to a number of electronic component purchase orders placed by Zhicheng Weiye from suppliers between June and July 2022. A deposit of 20% of the purchase price has been paid. The alleged amount is the balance of the purchase price payable by Zhicheng Weiye before delivering the products to the Group.
Information relating to transactions under the procurement contract and related delays in fulfilling procurement obligations was disclosed in the notes to the consolidated financial statements of the company's 2023 annual report, and the Group explained at the time the circumstances that led to a loss contract provision of approximately HK$93 million for the year ended 31 December 2022.
When the relevant procurement contract is concluded, the relevant product is purchased at a price lower than the current market price. However, after the purchase, due to a downward trend in the market price of related electronic component products, Zhicheng Weiye believes that it is not in the company's best interest to receive related electronic component products previously purchased at a higher purchase price and sell them at a lower price. As a result, Zhicheng Weiye temporarily stopped completing the procurement of related products in accordance with the procurement contract (including payment of the balance of the purchase price and receipt of goods).
Contrary to the allegations, the Group from time to time has discussions with suppliers about the timing of payment and receipt of products. For the year ended December 31, 2023 and up to the date of this announcement, the Company paid a total balance of approximately US$14 million in respect of the relevant procurement contracts; the supplier has delivered products to the Group in an amount corresponding to the balance paid by the Company; and part of such products has been sold to the Group's customers.
After receiving the notice and until the date of this announcement, the company has been actively contacting suppliers to resolve contract disputes and reach settlements. Meanwhile, the Group is seeking legal advice from its legal advisors on Chinese law and will respond positively to lawsuits if necessary. The company will make further announcements in due course to keep shareholders and potential investors aware of any significant developments relating to the dispute.