China Dredging Environment Protection Holdings Limited Issues Voluntary Announcement on Enforcement Cases Involving Deemed Subsidiary

Hong Kong, 22 April 2026 – China Dredging Environment Protection Holdings Limited (“the Company”, HKEX: 871) has issued a voluntary announcement to update shareholders and potential investors regarding enforcement cases involving Jiangsu Xingyu Holdings Group Limited (“JSXY”), a deemed subsidiary through contractual arrangements.

Key Points from the Announcement

• JSXY and Certain Subsidiaries Listed in Enforcement Cases: JSXY and certain other subsidiaries have been listed as “persons subject to enforcement” by authorities in the People’s Republic of China in connection with two enforcement cases. The aggregate claim involved is approximately RMB 1.29 billion and relates to events in 2025.
• No Direct Equity Ownership by the Group: The Company clarified that it does not own any equity interest in JSXY. All equity in JSXY is held by Mr. Liu Kaijin, a substantial shareholder of the Company.
• Contractual Control over JSXY: Despite the lack of direct ownership, the Group conducts a substantial portion of its business through JSXY via a series of contractual arrangements established in 2011. These agreements give the Group power over JSXY and its subsidiaries, rights to variable returns, and the ability to affect those returns. JSXY is described as the largest deemed wholly-owned subsidiary of the Group in terms of operating assets and construction scale.
• Nature of the Enforcement Cases: The enforcement actions stem from a personal debt dispute involving Mr. Liu Kaijin. The Group is not the principal obligor of the debts in question.
• Assurances from Mr. Liu: Mr. Liu has affirmed to the Company’s management that the debts are his personal responsibility. He also stated that negotiations with creditors are ongoing with the aim of settling the debt and lifting the freezing order on JSXY’s equity interests.
• Legal Consultations: The Company’s legal advisers have indicated that, as JSXY has not received any enforcement request related to these cases, there is currently no basis to assess potential actions or liabilities.
• No Immediate Material Impact: Based on current information and legal advice, the Company believes the enforcement cases have no material impact on the Group’s business, financial condition, or operations at this time, nor on its annual results for the year ending 31 December 2025.
• Ongoing Monitoring and Commitment to Transparency: The Company will continue to monitor developments and will make further announcements regarding any material changes or impacts as appropriate.

Potential Shareholder Impact and Price-Sensitive Considerations

• Risk Exposure Due to Contractual Arrangements: Although the Group does not directly own JSXY, its significant reliance on JSXY for business operations means any adverse developments related to JSXY could potentially affect the Group’s operating performance and structure.
• Dependence on Key Shareholder: The enforcement cases are tied to Mr. Liu Kaijin, a substantial shareholder and the sole owner of JSXY. Any escalation in his personal financial situation could indirectly impact the Group.
• Uncertainty Remains: While the Company states there is no immediate material impact, the situation is subject to change. Shareholders should remain vigilant as further developments could affect the Group’s financial health and share price.
• Shareholder Caution Advised: The Company explicitly advises shareholders and potential investors to exercise caution when trading its securities in light of the ongoing situation.

Details of the Board and Management

The announcement was approved by the board of directors, which includes:

• Ms. Zhou Shuhua (Chairlady and Executive Director)
• Mr. Liu Yajun (Executive Director and Chief Executive Officer)
• Mr. Zhang Chunxi (Executive Director)
• Mr. Wang Jianhua (Executive Director)
• Mr. Huan Xuedong (Independent Non-Executive Director)
• Mr. Chan Ming Sun Jonathan (Independent Non-Executive Director)
• Mr. Liang Zequan (Independent Non-Executive Director)

Disclaimer

This article is provided for informational purposes only and does not constitute investment advice. Investors are urged to conduct their own due diligence and consult professional advisers before making any investment decisions. The Company has indicated that the situation is subject to ongoing monitoring and may change. The accuracy of the information is based on disclosures made by the Company as of 22 April 2026.

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