Zhitong Financial App News, New City Construction and Development (00456) announced that the board of directors of the company was recently informed by Guangdong Changyang Investment Co., Ltd. (Guangdong Changyang) and Guangdong Changliu Investment Co., Ltd. (Guangdong Changliu) (“these subsidiaries”), which are wholly-owned subsidiaries of the company, that the Guangzhou Zengcheng District People's Court (the Chinese court) has filed a violation involving five Chinese individuals (plaintiffs), and the contract dated December 28, 2020 (as the buyer) and Guangdong Changliu (as guarantor) A decision was made on the claim for default to acquire all of the shares in Guangzhou Lianwei Property Co., Ltd. (Guangzhou Lianwei) and Guangzhou Youchang Commercial Management Co., Ltd. (Guangzhou Youchang), as added to the supplementary agreement of May 31 (collectively, the “Agreements”) (the first decision). According to the first decision, it was decided that these subsidiaries would pay the plaintiff a total amount of RMB 57.9 million, plus interest and costs. The Chinese courts have also made relevant decisions on lawsuits brought against Guangdong Chang Yang relating to breach of guarantees under the contract and withdrawal of the contract from the plaintiff (the second decision, together with the first decision, collectively referred to as “such decisions”).
These subsidiaries have sought Chinese legal advice and believe they have sufficient grounds to appeal these decisions. Guangdong Changyang has recently appealed these decisions. The Company will provide its shareholders and potential investors with timely updates on significant developments relating to the appeal in accordance with the listing rules.