Gelonghui November 7th 丨Jianpeng Holdings (01722.HK) announced that Jianpeng Construction Engineering Co., Ltd. (“Jianpeng”, a wholly-owned subsidiary of the Company) recently encountered a suspected fraud incident relating to a machinery acquisition (“Suspected Fraud Incident”).

In August 2023, Jianpeng proposed a procedure to acquire construction machinery to a supplier (“Machinery Acquisition”). The terms of the machinery acquisition matter were confirmed by Jianpeng through verbal and email communication with the supplier. Around September 2023, a person posing as the supplier (“fake supplier”) contacted Jianpeng through one of the supplier's email addresses and discussed the machinery acquisition. During the discussion, the false supplier suggested that the payment method previously provided by Jianpeng should no longer be used; Jianpeng should settle the payables using a different payment method. Since the email address used by the fake supplier matches the email address used by the supplier, and the fake supplier seems to be very familiar with the details of the previous negotiations between Jianpeng and the supplier on the machinery acquisition, Jianpeng's employees did not detect the scam set up by the fake supplier.

Jianpeng then remitted two payments totaling 517,000 euros (equivalent to about MOP 4.5 million) to the designated bank account provided by the fake supplier. However, at the beginning of October 2023, Jianpeng was told by the supplier when inquiring about payment receipts from the supplier that it had not received any payments from Jianpeng. Jianpeng had discussions with the supplier after a preliminary investigation, and learned from this that the email address used by the fake supplier appeared to be a stolen email address, and as far as the supplier was concerned, it was claimed that all emails sent through this email address were unauthorized.

After discovering the incident, Jianpeng has reported it to the Macau Police, Hong Kong Police, and the Internet Fraud Division of the US Federal Bureau of Investigation. Once the company discovered the suspected fraud incident, it also immediately sought the opinions of legal advisers on the group's legal position and any legal remedies that could be taken against the wrongdoers.

As of the announcement date, the company has not been able to recover two payments totaling 517,000 euros (equivalent to about MOP 4.5 million). The company's management believes that the suspected fraud incident is an individual incident, and that the financial losses involved will not have any significant impact on the company's daily operations.

The company is taking this matter seriously and has taken immediate action to address this alleged fraud. The company is fully cooperating with the relevant authorities in the investigation and has taken appropriate measures to mitigate any potential impact of the incident on the company's operations and financial situation. Specifically, the Group has been vigilant in all currency transactions with third parties and implemented enhanced control measures to verify the identity of payees before issuing any payment authorizations.