ST Jinggu Acquisition "Stepping on a Landmine" Event Now Turns Around: Former Controlling Shareholder of Atomic Company Suspected of Contract Fraud, Investigation Initiated by Public Security Bureau

Everyday Reporter | Wen Duo Everyday Editor | Chen Junjie

On the evening of March 23, ST Jinggu (SH600265, also known as Jinggu Forest Industry) announced that the company recently received a “Notice of Case Filing” from the Tang County Public Security Bureau in Hebei Province. The notice states that the company’s former controlling subsidiary, Tang County Huiyin Wood Industry Co., Ltd. (hereinafter Huiyin Wood), is under investigation for suspected contract fraud, and the case has been officially filed.

This development marks a key step for ST Jinggu in addressing risks related to Huiyin Wood and provides a new resolution path for a series of lawsuits previously triggered by “private lending” disputes.

Case Filing: Public Security Authorities Officially Intervene

In the announcement, ST Jinggu disclosed that it recently received the “Notice of Case Filing” from the Tang County Public Security Bureau. The company was informed that the case involving Cui Huijun, suspected of contract fraud, meets the criteria for case filing and has now been officially filed. The announcement emphasizes that the final investigation results will be based on the official conclusions of the public security authorities.

This decision to file the case is closely related to the litigation progress previously disclosed by the company. According to another announcement released on the same day, the listed company, Huiyin Wood, its former actual controller Cui Huijun, and Wang Lanchun, were sued by plaintiff Fan Huazhi at the Zhengding County People’s Court in Hebei Province over a “private lending” dispute, involving principal amounts of 60 million yuan and corresponding interest.

Recently, the company received a “Civil Ruling” delivered by the Zhengding Court, which dismissed the plaintiff Fan Huazhi’s lawsuit in the first instance, and the case acceptance fee of 485,100 yuan was refunded to the plaintiff.

The Zhengding Court held that the private lending activity claimed by the plaintiff clearly involved suspected economic crimes and was outside the scope of civil cases handled by the court. Continuing civil proceedings could result in conflicts between civil judgments and criminal determinations. According to relevant regulations, the case should be dismissed and the criminal clues transferred to public security authorities for handling.

The court also specifically pointed out that similar cases with high relevance have already been dismissed and transferred to public security authorities on suspicion of criminal activity, maintaining consistency in handling.

ST Jinggu also reminds that since this ruling is a first-instance decision, whether the case will impact the company’s current or future profits will depend on the audit results confirmed by the accounting firm.

The Twists from Acquisition to Divestment

The entanglement between ST Jinggu and Huiyin Wood began in 2023. The company completed a major asset restructuring in 2023, acquiring a 51% stake in Huiyin Wood for 270 million yuan, bringing this Hebei-based timber company into its controlling subsidiaries. However, this acquisition did not bring the expected synergies and instead became a source of multiple risks.

Starting in April 2025, creditors Cui Huijun, Wang Lanchun, and Huiyin Wood were sued successively, with pre-litigation property preservation measures applied by the courts. These lawsuits led to the freezing and seizure of Huiyin Wood’s bank accounts and major assets, ultimately halting its operations.

According to a November 14, 2025, announcement by the company, Huiyin Wood was involved in 32 lawsuits related to “private lending” disputes (including 2 cases withdrawn), with a principal amount totaling approximately 214 million yuan, accounting for 224.49% of the company’s latest audited net assets. Of this, about 192 million yuan was related to the company.

More seriously, at that time, nine bank accounts of Huiyin Wood had been frozen by the court, with no clear timeline for resumption of work.

Faced with this situation, ST Jinggu took decisive action—transferring its 51% stake in Huiyin Wood on December 2025. After the transaction, Huiyin Wood was divested and no longer consolidated into the company’s financial statements. However, this divestment did not fully resolve the underlying issues.

On November 25, 2025, the company received an inquiry letter from the Shanghai Stock Exchange, asking six core questions.

Among them, the inquiry focused on the fact that in 2023, 2024, and January–July 2025, Huiyin Wood’s revenue accounted for 93.68%, 87.02%, and 79.39% of the company’s total revenue, respectively.

Additionally, the risk of fund lending was prominent. As of July 31, 2025, Huiyin Wood owed the company 13.26 million yuan in principal and interest that had not been repaid.

Now, with the public security authorities filing a case against Cui Huijun for suspected contract fraud, ST Jinggu faces a new phase of complex challenges. The company stated it will actively cooperate with the police investigation, pursue legal responsibility for relevant personnel according to law, continue to follow up on accountability, and protect the legitimate rights and interests of the company and all shareholders.

Cover image source: Media Asset Library of the Daily Economic News