Gelonghui May 13, Qianhai Health (00911Bingoplusgcash.HK) issue an announcementBingoplusgcashOn May 6, 2024, a subsidiary of the company received a letter issued by the Beijing No. 4 Intermediate people's Court on April 17, 2024.BingoplusgcashNotice of proof ("notice"). The subject matter involves a supplier (the "supplier") of Zhicheng Weiye Limited ("Zhicheng Weiye"), a wholly-owned subsidiary of the company, and the contract dispute between Zhicheng Weiye and the company. the content relates to the alleged failure to comply with the payment obligations of certain procurement contracts and guarantee letters.
The alleged claim relates to certain purchase orders for electronic components placed with suppliers by Zhicheng Weiye during June and July 2022. A deposit of 20% of the purchase price has been paid, and the alleged amount is the balance of the purchase price payable before Zhicheng Weiye delivers the products to the group.
Information on the transactions under the procurement contract and related delays in the performance of procurement obligations was disclosed in the notes to the consolidated financial statements of the company's 2023 annual report, and the Group had explained at that time the circumstances leading to a provision for loss contracts of approximately HK $93 million for the year ended 31 December 2022.
When entering into a relevant procurement contract, the relevant products are purchased at a price lower than the market price at that time. However, after the purchase, as the market price of the related electronic components showed a downward trend, Zhicheng Weiye considered that it was not in the company's best interest to receive the relevant electronic components previously purchased at a higher purchase price and sell them at a lower price. Therefore, Zhicheng Weiye temporarily stops the purchase of related products (including the balance of payment of purchase price and receipt) in accordance with the purchase contract.
Contrary to the allegations, the Group held discussions with suppliers from time to time on the timing of payment and receipt of products. For the year ended 31 December 2023 and up to the date of this announcement, the Company has paid a total balance of approximately US $14 million in respect of the relevant procurement contracts, and the supplier has delivered to the Group a quantity of products corresponding to the balance paid by the Company; and some of these products have been sold to the Group's customers.
After receiving the notice and up to the date of this announcement, the company has been actively liaising with suppliers to resolve contractual disputes and reach a settlement. At the same time, the Group is seeking legal advice from its legal adviser on the laws of the people's Republic of China and will actively respond to litigation if necessary.
