China Water Industry (01129.HK) announced that it has recently received a civil lawsuit from the court. The plaintiff, Yingchun Municipal Government, has filed a claim against the company in relation to the sale of all equity of Anfa International.

The plaintiff claims that under Chinese law, the company must give written notice to and seek the plaintiff's consent for transfer of the company's equity to any third party. Within 30 days from the date of the written notice, the plaintiff has the right of first refusal to purchase the equity on the same terms. The plaintiff also alleges that the company sold the equity to the buyer without giving written notice or seeking its consent, infringing on its statutory rights.

The company is currently seeking legal advice from Chinese legal counsel regarding the above matters. Currently, the civil claim has no significant impact on business operations and financial condition.