Zotye Auto received a regulatory letter from the Shenzhen Stock Exchange for failing to disclose in a timely manner nearly 70 million yuan in newly due and unpaid debts.

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On March 27, the Shenzhen Stock Exchange issued a regulatory letter to Zotye Auto (000980.SZ). The regulatory letter indicates that according to Zotye Auto’s reorganization plan, the company is to repay 10%, 20%, 30%, and 40% of the reorganization debt principal on December 21, 2023, December 21, 2024, December 21, 2025, and December 21, 2026, respectively. As of December 21, 2025, Zotye Auto and its subsidiaries had new overdue unpaid debt principal totaling 69.4611 million yuan, which the company did not disclose until January 27, 2026.

Zotye Auto’s actions violated Article 1.4, Article 2.1.1, and Article 7.7.7 of the Shenzhen Stock Exchange’s “Stock Listing Rules (Revised 2025)” regarding the timely disclosure of other significant matters.

Zotye Auto’s then Chairman Li Lizhong and then General Manager Han Biwen failed to perform their duties diligently and fulfill their obligations of loyalty and diligence, violating Article 1.4, Article 2.1.2 (first paragraph), and Article 4.3.1 (first paragraph) of the “Stock Listing Rules (Revised 2025),” and bear primary responsibility for Zotye Auto’s violations.

The company’s then Board Secretary Wang Yian also failed to perform his duties diligently and fulfill his obligations of loyalty and diligence, violating Article 1.4, Article 2.1.2 (first paragraph), Article 4.3.1 (first paragraph), and Article 4.4.2 (item (1)) of the Shenzhen Stock Exchange’s “Stock Listing Rules (Revised 2025),” and bears primary responsibility for Zotye Auto’s violations.

The Shenzhen Stock Exchange requires Zotye Auto and all its directors and senior management to learn from this lesson, strictly adhere to laws and regulations such as the “Securities Law” and “Company Law,” as well as the Shenzhen Stock Exchange’s “Stock Listing Rules” and related provisions, and to fulfill information disclosure obligations truthfully, accurately, completely, timely, and fairly, to prevent such incidents from occurring again.

At the end of last year, Li Lizhong, who had only been in office for two months as Chairman of Zotye Auto, resigned. According to Zotye Auto’s announcement, Li Lizhong resigned from his position as Chairman and Director due to personal family reasons, and also resigned from his positions as Chairman of the Strategic Committee and member of the Nomination Committee of the Board. In addition, the company’s board of directors nominated Han Biwen as a non-independent director candidate for the ninth board, with a term starting from the date of approval by the shareholders’ meeting until the expiration of the ninth board.

Zotye Auto has been in operational difficulties since 2019, suffering losses for seven consecutive years, and subsequently underwent bankruptcy reorganization, causing its automotive production business to come to a standstill.

On the evening of January 26 of this year, Zotye Auto issued an announcement regarding the early repayment of debts to two bank creditors, stating that it had repaid approximately 212 million yuan and 173 million yuan to the Yongkang Branch of China Bank Co., Ltd. (hereinafter referred to as China Bank Yongkang Branch) and the Yongkang Branch of China Construction Bank Co., Ltd. (hereinafter referred to as Construction Bank Yongkang Branch), respectively, totaling approximately 385 million yuan.

Zotye Auto is currently promoting the resumption of operations. On March 18, Zotye Auto announced that its wholly-owned subsidiary Zhejiang Shenkang Automobile Body Mould Co., Ltd. (referred to as “Shenkang Body”) resumed operations on March 18 and officially restarted production. The resumption of operations at Shenkang Body is still in the early stages, and its production capacity ramp-up, supply chain coordination, quality control, and other aspects still require time to adjust, and the stability of its production operations remains to be verified in the future.

Zotye Auto also mentioned in the announcement that the company still faces significant financial pressure and debt burden, and the full recovery of its complete vehicle business requires the maturation of various conditions and efforts, with substantial uncertainty remaining.

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