China Everbright Water Limited Issues Corrigendum on FY2025 Related Party Transactions

Key Points for Investors

• Correction in Disclosure of Interested Person Transactions (IPTs): The company has issued a corrigendum announcement to clarify and correct discrepancies in its FY2025 annual report regarding related party transactions. This correction affects the aggregate values of IPTs with certain subsidiaries and associates of the controlling shareholder, China Everbright Group Ltd.
• Aggregate Value of IPTs: The corrected aggregate value of all IPTs conducted under the general mandate with China Everbright Environment Group Limited during FY2025 is HK\$201,591,000 (SGD33,846,000), not HK\$210,591,000 as previously disclosed.
• Finance Cost Disclosure: A finance cost of HK\$1,027,000 (SGD172,000) charged by a related party bank was not originally included as an IPT under the mandate and has now been disclosed appropriately.
• Transparency and Regulatory Compliance: All other IPTs have been disclosed in accordance with the applicable rules, and the revised information has been published on SGXNet, Hong Kong Exchanges and Clearing Limited, and the company’s website.
• Board Confirmation: The company confirms that all related party transactions qualifying as IPTs required under SGX-ST Rule 907 have been properly disclosed.

Details of the Corrigendum and Related Party Transactions

The Singapore Exchange Securities Trading Limited (SGX-ST) raised queries regarding discrepancies between the related party transactions disclosed at Note 36(d) of China Everbright Water Limited’s FY2025 financial statements and the IPTs reported on page 155 of the annual report. In response, the company has issued a detailed reconciliation and correction, which is significant for shareholders and investors concerned with corporate governance and transparency.

• China Everbright Environment Group Limited:
  • Sales of machineries: HK\$5,764,000
  • Cost of project operation service: HK\$4,990,000
  • Electricity cost: HK\$186,091,000
  • Lease payments: HK\$4,742,000
  • Corrected total IPTs under mandate: HK\$201,591,000
• Sun Life Everbright Life Insurance Co., Ltd.:
  • Insurance expenses: HK\$2,042,000
  • Healthcare protection services: HK\$14,143,000
  • Total IPTs under mandate: HK\$16,185,000
• Everbright Securities Company Limited:
  • Underwriting service fee: HK\$4,157,000
• China CYTS Tours Holding Co., Ltd.:
  • Travelling service cost: HK\$778,000
• Related Party Bank:
  • Finance cost now properly disclosed: HK\$1,027,000

Potential Price Sensitive Issues

• Correction of IPT Disclosure: Accurate disclosure of related party transactions is crucial for investor confidence and compliance with listing rules. The original overstatement of IPTs with China Everbright Environment Group Limited by HK\$9 million could have affected perceptions of the company’s governance and risk exposure.
• Regulatory Compliance: The company’s swift correction and transparent communication with exchanges and shareholders demonstrate a commitment to compliance, which may positively impact its reputation and valuation.
• Financial Impact: While the corrections do not materially change the company’s overall financial position, they ensure that all IPTs are properly accounted for and disclosed, reducing the risk of regulatory penalties or reputational damage.
• Investor Awareness: Shareholders should note that non-disclosure or misstatement of related party transactions could have implications for future dividend policies, corporate actions, or even regulatory investigations if not addressed.

Board and Governance Details

The Board of China Everbright Water Limited consists of a non-executive chairman (Mr. Luan Zusheng), an executive director and CEO (Mr. Xiong Jianping), and four independent non-executive directors (Ms. Hao Gang, Mr. Ng Joo Hee Peter, Mr. Soh Kok Leong, and Ms. Chan Pui Shan Sandy). This structure underscores the company’s governance framework and its commitment to independent oversight.

Conclusion

The correction of IPT disclosures is a material event for shareholders to consider. Proper reporting of related party transactions is fundamental to corporate transparency and regulatory compliance. Investors should monitor the company for further updates and assess how these corrections may influence their investment decisions, particularly given the size and nature of the transactions with the controlling shareholder and its associates.

Disclaimer

The information provided herein is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own due diligence and consult with professional advisors before making any investment decisions.

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