Hengyang Petrochemical Logistics Limited: Critical Update on Listing Status, SDN Sanctions, Auditor Resignation, and AGM Extension

Key Highlights for Investors

• Trading halt and suspension of shares since October 2025 due to US sanctions.
• Company, key joint venture, and CEO listed on US OFAC Specially Designated Nationals (SDN) List.
• Major operational and financial disruptions, including loss of auditors and banking access.
• Difficulty in appointing replacement auditors and engaging professional services.
• Loss of international business and potential disposal of loss-making port operations.
• Application for extension to issue annual report and hold AGM for FY2025.
• Unaudited FY2025 results published, but material changes may occur once audited.

Detailed Report

Trading Halt and SDN List Inclusion

Hengyang Petrochemical Logistics Limited halted trading of its shares on the Singapore Exchange Catalist Board on 13 October 2025, followed by voluntary suspension from 16 October 2025. This drastic measure was triggered when the Company, its key joint venture Jiangyin Foreversun Chemical Logistics Co., Ltd. (41.64% owned), and its Executive Director & CEO, Mr. Gu Wenlong, were included on the US Department of Treasury’s OFAC SDN List.

The SDN listing means US persons and entities are broadly prohibited from engaging in any dealings with the Company, its JV, or Mr Gu without OFAC authorization. As a result, the Company has been unable to appoint US legal counsel to pursue removal from the SDN List, with legal experts confirming the complexity and long duration required for such removal. There is currently no indication of a timeline or clear remedial steps from OFAC.

Delisting Challenges and Banking Restrictions

The Board has explored options for delisting from SGX, but faces insurmountable hurdles. Mr Gu, the controlling shareholder (56.08% interest), cannot engage Singapore banks to mount an exit offer or fund a delisting due to his SDN status. The Company was asked to transfer its funds out of its Singapore bank account and has failed to open new accounts. Currently, only limited functions are possible, severely restricting financial flexibility.

Auditor Resignation and Search for Replacement

BDO LLP, the Company’s auditor, resigned due to the SDN listing, citing compliance risks as a global firm with US presence. Despite efforts to persuade BDO to continue (arguing sanctioned activities were inadvertent and minor), BDO refused, and ACRA has not yet approved its resignation pending appointment of a replacement.

The Company has approached more than 10 audit firms in Singapore; all but two declined engagement for compliance reasons. Of the two, one requires a clean legal opinion before appointment, while the other anticipates lengthy internal clearance. No firm has committed to the audit, casting doubt on timely completion of FY2025 financial statements.

Operational Impact and Loss of International Business

Jiangyin Foreversun’s China Holdco Group has suffered significant loss of business from international customers unwilling to engage while the Company, JV, and CEO remain on the SDN List. The Group is pivoting to domestic Chinese clients, but its port operations, which rely on international trade, are severely affected. A disposal of the loss-making port business is under consideration to reduce losses and reallocate resources.

Extension of Time to Issue Annual Report and Hold AGM

The Company has applied for a four-month extension to comply with SGX Catalist rules for issuing its annual report and holding the AGM for FY2025. The timeline for audit and reporting is highly uncertain, dependent on securing a replacement auditor and overcoming compliance hurdles. Indicative schedule shows possible completion by end August 2026, but this is not assured.

ACRA has granted an initial 60-day extension for AGM and annual return filings, with a further 60-day extension application pending. There is no guarantee this will be approved.

Publication of Unaudited FY2025 Results

The Company has published unaudited FY2025 financial statements and will announce any material adjustments once a new auditor is appointed. Quarterly results will continue to be disclosed. Investors are warned that audited results may differ significantly from the unaudited numbers.

Share Transfer Restrictions and Investor Advisory

With trading halted and suspended, transfers of shares are prohibited unless approved by SGX-ST. Shareholders and investors are strongly advised to read all announcements carefully and consult professional advisers before making any decisions regarding Hengyang Petrochemical Logistics Limited shares.

Price Sensitive Issues and Risks

• Prolonged trading halt and suspension: Shares are not tradeable and transfers are restricted.
• SDN List inclusion: Major compliance and operational risks; uncertain timeline for removal.
• Loss of auditors and banking access: Threatens ability to complete financial reporting and delist.
• Loss of international business: Revenue and profitability may be significantly affected.
• Potential disposal of port operations: Could materially impact asset base and future earnings.
• Uncertainty on annual report and AGM timing: May affect shareholder rights and ability to receive audited financials.
• Risk of material adjustments to unaudited results: Could affect valuations and shareholder confidence.

Important Notes for Shareholders

• Trading suspension means shares cannot be bought or sold on SGX until further notice.
• Material uncertainty exists regarding financial reporting, AGM timing, and future operations.
• SDN status may continue for an extended period, potentially affecting Company’s ability to operate normally, attract professional services, and maintain international business relationships.
• Shareholders should closely monitor all Company announcements and seek professional advice before acting.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with legal, financial, and professional advisers before making any decisions regarding Hengyang Petrochemical Logistics Limited shares. The situation described is subject to change and may be affected by regulatory, legal, and operational developments. No liability is accepted for any loss arising from reliance on this information.

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