(hereinafter referred to as "Sinoma International") issued a major litigation progress announcement on August 5, disclosing that the company sued Hangzhou Xiaoshan Building Materials Group Co., Ltd. (Hereinafter referred to as "Hangzhou Xiaoshan"), Liu Jinzhen and Henan Jinrong Cement Co., Ltd. (Hereinafter referred to as "Henan Jinrong"). The first instance Civil Judgment issued by Nanjing Intermediate People's Court of Jiangsu Province has been received. The court ruled that Sinoma International shall enjoy the priority of compensation for the relevant pledged equity within the scope of the project price and interest of 774.76 million yuan, and some defendants shall bear the supplementary liability for compensation and related costs.
The case originated from the construction contract dispute between Sinoma International and Guangxi Jinxiang Cement Co., Ltd. Prior to this, Sinoma International filed a pledge contract dispute lawsuit with Nanjing Intermediate People's Court in respect of the guarantee liability corresponding to the unpaid project funds of Guangxi Jinxiang, requiring the defendants to assume the guarantee liability in accordance with the equity pledge contract, involving a project price and interest of 774.76 million yuan.
According to (2025) Su 01 Min Chu No.1907 Civil Judgment, the main contents of the judgment are as follows:
1. Sinoma International owes the project principal of 774.76 million yuan and interest in Jinxiang, Guangxi (based on 774.76 million yuan. According to the one-year loan market quotation interest rate published by the National Interbank Funding Center in the same period, the interest will be calculated from August 21, 2024 to the date of actual payment), and the overdue interest will be within the scope of 47.23947123 million yuan, which has the right to 52.24% of Henan Jinrong's equity and derivative rights and interests held by Hangzhou Langshan.
2. Sinoma International shall, within the scope of the same creditor's rights mentioned above, have the right to enjoy the priority of compensation within the scope of the proceeds from the discount, auction and sale of the 2.28% equity interest and derivative interest in Henan Jinrong held by Liu Jinzhen;
3. Hangzhou Langshan shall assume the supplementary liability for compensation to Sinoma International for the proceeds from the discount, auction and sale of its pledged 52.24% equity interest in Henan Jinrong and its derivative interests within the scope of the insufficient part of the value of the pledged equity interest of RMB1,702,098,673;
4. Liu Jinzhen shall assume supplementary compensation liability to Sinoma International for the proceeds from the discount, auction and sale of the 2.28% equity and derivative interests of Henan Jinrong pledged by him within the scope of the insufficient part of the value of the pledged equity of RMB74,287,614.36 million;
5. Hangzhou Xiaoshan shall pay CNY 800,000 as legal fees to Sinoma International within 10 days from the effective date of the judgment, and Liu Jinzhen shall be jointly liable for the payment with Hangzhou Xiaoshan within the scope of CNY 33,500 as legal fees;
6. Liu Jinzhen shall pay CNY 13,550 as preservation guarantee fees to Sinoma International within 10 days from the effective date of the judgment;
7. Reject other litigation requests of Sinoma International.
The case acceptance fee is 4,066,040 yuan and the preservation fee is 5,000 yuan, totaling 4,071,040 yuan, of which 27,486 yuan is borne by Sinoma International, 3,874,664 yuan is borne by Hangzhou Langshan and 168,890 yuan is borne by Liu Jinzhen.
The announcement also pointed out that up to now, Sinoma International has made a cumulative provision for impairment of receivables involved in the above litigation matters of 51.6647 million yuan in accordance with the Accounting Standards for Enterprises. This litigation case is currently in the first instance judgment stage, still in the appeal period, the final result is uncertain, and it is impossible to accurately judge the impact on the company's profits in 2026 and beyond.
It is reported that the first instance judgment of Sinoma International v. Guangxi Jinxiang Construction Project Contract Dispute (involving an amount of 904,580,876.61 yuan) has come into effect and is currently in the stage of enforcement.
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