Core Viewpoint - Raffles Interior Limited has received an anonymous complaint alleging violations of China's foreign exchange control regulations related to a proposed acquisition of 100% equity in Kun Yuan Asset Limited for HKD 300 million, which may constitute a significant acquisition and connected transaction for the company [1] Group 1: Complaint Details - The complaint states that the target company holds 100% equity in Shenzhen Jin Xua Technology Co., Ltd., which possesses land use rights for the target assets [2] - The equity of Shenzhen Jin Xua was transferred to the target company shortly before the acquisition agreement was signed, raising concerns about the legality of the transfer [2] - The ultimate beneficial owner of the seller (the target company) is identified as Zheng Nenghuan, an executive director and controlling shareholder of Raffles Interior [2] Group 2: Legal Concerns - The complaint raises concerns about potential violations of China's foreign exchange control regulations, specifically regarding the lack of necessary registration with the State Administration of Foreign Exchange (SAFE) for the pre-acquisition transfer [3] - It is suggested that if the company proceeds with the acquisition without completing the required registration, it may constitute illegal cross-border fund transfers and violate relevant Chinese laws [3] Group 3: Corporate Governance and Responsibilities - The board of directors is responsible for ensuring compliance with applicable laws and regulations, including full and fair disclosure obligations [4] - The company has sought legal advice regarding the allegations and is awaiting confirmation from Zheng Nenghuan that the pre-acquisition transfer complies with relevant regulations [4] Group 4: Ongoing Investigations - As of the announcement date, Zheng Nenghuan has not provided any positive confirmation or sufficient evidence to refute the allegations in the complaint [5] - The independent board committee will conduct an investigation into the issues raised in the complaint, which was established on December 10, 2025, and approved by the board on December 15, 2025 [5]

Core Viewpoint - Raffles Interior (01376) has received a complaint alleging violations of Chinese foreign exchange regulations related to a proposed acquisition of 100% equity in Kun Yuan Asset Limited for HKD 300 million, which may constitute a significant acquisition and connected transaction [1] Group 1: Allegations and Concerns - The complaint claims that the acquisition involves potential illegal asset transfers out of mainland China and tax evasion by individuals including Zheng Nenghuan and Tang Juding [1] - The target company holds 100% equity in Shenzhen Jin Xuan Technology Co., Ltd., which possesses land use rights for the target assets [1] - The transfer of equity in Shenzhen Jin Xuan to the target company occurred shortly before the acquisition agreement was signed, raising concerns about compliance with Chinese regulations [1] Group 2: Regulatory Compliance Issues - The complaint highlights that the acquisition may violate Chinese foreign exchange regulations, specifically the requirement for foreign exchange registration under the Notice No. 37 [2] - It is alleged that Zheng Nenghuan and/or Tang Juding failed to submit the necessary registration, which could be seen as circumventing foreign exchange controls or illegal cross-border fund transfers [2] - Advancing the acquisition without completing the required registration could lead to violations of Chinese laws and harm minority shareholders' interests [2] Group 3: Corporate Governance and Board Responsibilities - The board is responsible for ensuring compliance with applicable laws and regulations, including full and fair disclosure obligations [3] - Despite the company's intention not to proceed with the acquisition, there has been insufficient disclosure regarding the handling of the sale agreement [3] - The company has sought legal advice regarding the allegations and requested confirmation from Zheng Nenghuan that the pre-acquisition transfer complies with relevant regulations [3] Group 4: Ongoing Investigations and Board Actions - As of the announcement date, Zheng Nenghuan has not provided confirmation or sufficient evidence to refute the allegations in the complaint [4] - The board is awaiting a satisfactory termination agreement for the sale and is concerned about potential significant losses if the acquisition proceeds without compliance [4] - An independent committee has been established to investigate the issues raised in the complaint, with approval from the board [4]