China High Speed Transmission Group files legal action in Hong Kong over alleged USD 929.6 million misappropriation of funds by former executives and partners.
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| China High Speed Transmission Group announces a legal suit to reclaim USD 929.6 million misappropriated by former executives and business partners in Hong Kong. Image: CH |
Hong Kong, China — April 1, 2025:
On April 1, 2025, China High Speed Transmission Equipment Group Co., Ltd. (0658.HK) officially launched a legal action in the High Court of Hong Kong, seeking to recover a substantial USD 929.6 million (RMB 6.64 billion) in misappropriated funds. The lawsuit, filed on March 31, 2025, targets former executives, business partners, and associated companies involved in alleged misconduct that led to significant financial losses.
The legal action is directed at a range of defendants, including Fang Jian, the former Executive Director and Legal Representative of the Group’s subsidiaries, Fullshare Holdings Limited (0607.HK), and its subsidiary Five Seasons XVI Limited. Additionally, Ji Changqun, the Chairman of Fullshare, along with 16 other companies linked to commodity trading agreements and 10 individuals from Fullshare involved in financial management and contract approval, are also named in the case.
The dispute centers around the mismanagement of several critical agreements that resulted in the loss of USD 929.6 million, as of October 31, 2024. Despite several demand letters being sent to the defendants, the responses have been minimal, with claims stating that the funds owed were transferred to third parties without proper authorization.
As part of the response, the subsidiaries have notified Chinese authorities, who have begun a formal criminal investigation into suspected embezzlement and misappropriation of funds. Preliminary findings indicate that Fullshare personnel, under the leadership of Ji Changqun, were directly involved in the decision-making process and financial management of the subsidiaries' trading activities. Moreover, financial records recovered from Fullshare’s premises in December 2024 suggest that Fullshare had significant control over the financial operations of the subsidiaries during the relevant period.
The China High Speed Transmission Group, under the leadership of Chairman Hu Jichun, has emphasized its commitment to protecting shareholder interests, especially those of minority shareholders. “We will pursue all necessary legal avenues to ensure accountability for any misconduct that undermines corporate governance,” Hu said. “This action underscores our commitment to upholding the integrity and value of the Group, while ensuring transparency and justice for our stakeholders.”
In response to the crisis, the Group has formed an Independent Investigation Committee to oversee the investigation and is expecting a preliminary report by mid-May. Additionally, interim measures have been implemented to strengthen the company’s internal controls, improve oversight on commodities trading operations, enhance cash flow management, and optimize senior management roles to ensure robust corporate governance.
Founded in 1969, China High Speed Transmission Equipment Group is a leading manufacturer of high-speed and heavy-duty gears, with a strong presence in sectors like wind energy, rail transport, industrial machinery, and new energy vehicles. Despite these challenges, the company remains focused on reinforcing its internal systems to prevent future misconduct and improve its governance structure moving forward.