Zanyu Technology's overseas subsidiary was declared bankrupt. Is it due to debt default or business interference?

Ask AI · Why did Shuangma Chemical file a lawsuit suddenly after clearing its debts for eight years?

Reporter Zhu Yiyi, 21st Century Business Herald

On March 17 and 18, when domestic surfactant and fats & oils chemical leader Zanyu Technology (002637.SZ) hit the daily trading limit down for two consecutive days, it ran into a thorny issue.

Right on the evening of March 16, the company disclosed an important lawsuit: its wholly owned subsidiary in Indonesia, PT Dua Kuda Indonesia (“Dukuda”), recently received a “Bankruptcy Ruling Notice” issued by the Central Jakarta Commercial Court in Indonesia.

Changzhou City Shuangma Chemical Co., Ltd. (referred to as “Shuangma Chemical”) and its related parties—Hong Kong Harbor Praise Limited (referred to as “Harbor Company”), Nantong Xinjiu Chemical Co., Ltd. (referred to as “Nantong Xinjiu”), and three other companies—claimed that Dukuda had been in default on the corresponding debts since December 2018. They requested the court to initiate the PKPU procedure against Dukuda (i.e., a debt rescheduling application procedure) and issue a bankruptcy ruling.

What is intriguing is that Zanyu Technology, successively, invested RMB 530 million in 2016 and RMB 183 million in 2019 to obtain 60% and 30% equity interests in Dukuda from Shuangma Chemical, respectively.

On March 18, Zanyu Technology told reporter Zhu Yiyi of 21st Century Business Herald, “In the past nearly 8 years, the company has been engaged in nearly 10 rounds of mutual litigation with Shuangma Chemical. These mainly involve matters concerning that the taxes payable and fines generated during Shuangma Chemical’s operation and management of Dukuda should be borne and fulfilled by Shuangma Chemical. If there truly were any other creditor claims by Shuangma Chemical against Dukuda, it would be absolutely impossible that, within 8 years, there were no efforts to collect, and then suddenly lawsuits were filed with the court after 8 years.”

Zanyu Technology also emphasized, “The company has officially initiated the appeal process. The appeal brief has been accepted by the Supreme Court of Indonesia as of March 16.”

In response, on March 20, reporter Zhu Yiyi of 21st Century Business Herald also called Bao Xinglai, director and general manager of Shuangma Chemical, and he replied, “We must respect the law and the facts—everything depends on the bankruptcy ruling notice.”

Overseas subsidiary ruled bankrupt

Dukuda, which was ruled bankrupt by the court, is Zanyu Technology’s core production base in Indonesia.

According to the announcement, as early as November 2025, Harbor Company, a related party of Shuangma Chemical, applied to initiate the PKPU procedure against Dukuda and claimed that Dukuda had been in default on the principal and interest of matured debts owed to Harbor Company totaling about RMB 304 million since December 10, 2018; Dukuda had been in default on the principal and interest of matured debts owed to Zanyu Technology totaling about RMB 194 million since December 30, 2018; and Dukuda had been in default on matured debts owed to Nantong Xinjiu totaling RMB 800,000 since December 30, 2018. They requested the court to initiate the PKPU procedure against Dukuda and issue a bankruptcy ruling.

Until recently, on March 13, Dukuda received a “Bankruptcy Ruling Notice.”

However, Zanyu Technology has another account.

“According to the ‘Dukuda–Shuangma Chemical and Its Related Parties Balance Confirmation Letter’ issued by Shuangma Chemical on March 4, 2021, as of January 31, 2021, the creditor-debtor relationship between Harbor Company and Dukuda has been cleared to zero through offsetting between Harbor Company and its related companies such as Shuangma Chemical,” Zanyu Technology wrote in its announcement. At the same time, “the creditor claim claimed by Nantong Xinjiu was, in fact, transferred to Shuangma Chemical on July 31, 2020 through a debt and creditor claim transfer agreement.”

Zanyu Technology believes that, after Dukuda and Shuangma Chemical and their related parties carried out offsetting for their account dealings, there are no such overdue and unpaid debts among the parties.

“For account offsetting, you need the relevant procedures; some items can be offset, and some cannot be offset. Anything that cannot be offset must go through the accounts separately—you need to look at the framework agreement signed by both parties at the time,” Bao Xinglai, director and general manager of Shuangma Chemical, responded.

But in the announcement, Zanyu Technology held that, “during the application and review process of the PKPU procedure, the court and the administrator did not conduct a substantive review of the defense evidence, statements of facts, and legal documents submitted by the company, and instead issued a losing judgment.” Based on this, Zanyu Technology told reporter Zhu Yiyi of 21st Century Business Herald that, “the company has officially initiated the appeal process, and the appeal brief was accepted by the Supreme Court of Indonesia on March 16.”

“All our relevant evidence materials have been submitted, and the judge will not simply adopt materials provided by one side alone.” In this regard, Bao Xinglai also further emphasized to reporter Zhu Yiyi of 21st Century Business Herald.

Of note is that Zanyu Technology and Shuangma Chemical also have another ongoing lawsuit.

（Image source: Zanyu Technology announcement）

Since Shuangma Chemical has not paid the tax penalties and the losses from additional tax related to the tax inspection risk for Dukuda’s 2013 fiscal year to date, in March 2024 Zanyu Technology filed a lawsuit with the Hangzhou Intermediate People’s Court, requesting Shuangma Chemical to pay a total amount of RMB 108 million, including the relevant taxes, interest, fines, etc.

In June 2025, the Hangzhou Intermediate Court of First Instance ruled in favor of Zanyu Technology in the first instance; the case is currently in the second-instance stage.

Zanyu Technology believes that Shuangma Chemical’s initiation of the PKPU procedure application against Dukuda has the core purpose of conducting “improper commercial intervention.”

But Bao Xinglai does not accept the notion of “commercial intervention.” When discussing the related litigations between Zanyu Technology and Shuangma Chemical, he both emphasized that, “Ultimately, it will be based on the court’s judgment.”

Net profit of RMB 102 million contributed in the first half of last year

Although Zanyu Technology emphasized that, “as of now, Dukuda’s overall business operations are running normally and have not been materially affected by this bankruptcy ruling,” shares of the company still hit the daily trading limit down for two consecutive days on March 17–18 due to this news. On March 19, the company’s share price fell 8.23%; on March 20, it fell 0.92%, to RMB 11.82 per share.

Zanyu Technology is deeply involved in two major fields: surfactants and fats & oils chemical products, and has expanded into personal care and washing products (OEM/ODM processing) business.

The company has production bases in Hangzhou, Zhejiang; Jiaxing, Zhejiang; Zhenjiang, Jiangsu; Meishan, Sichuan; Hebi, Henan; Jiangmen, Guangdong; Shaoguan, Guangdong; as well as Jakarta, Indonesia.

Zanyu Technology, successively, invested RMB 530 million in 2016 and RMB 183 million in 2019 to acquire 60% and 30% equity interests in Dukuda from Shuangma Chemical.

Based on this, in June 2021, Zanyu Technology acquired the 8% equity interest in Dukuda held by Intellioil Chemicals PTE. LTD., thereby directly holding 98% of Dukuda’s equity.

Up to the disclosure in the 2022 annual report, Zanyu Technology directly held 98% of Dukuda and indirectly held 2%, achieving 100% control.

As the overseas core base of the company’s fats & oils chemical segment, the importance of Dukuda is self-evident.

In the first half of 2025, Dukuda achieved revenue of RMB 2.434 billion, and net profit of RMB 102 million in the same period. This net profit performance even exceeded the listed company’s consolidated net profit attributable to shareholders for the same period of RMB 97 million.

Before that, Dukuda’s net profits for 2020–2024 were RMB 65 million, RMB 395 million, RMB 277 million, RMB 157 million, and RMB 112 million respectively. In particular, in 2024, Dukuda’s net profit accounted for about 83% of the listed company’s net profit (Zanyu Technology’s net profit attributable to shareholders in 2024 was RMB 135 million).