Wancheng Global Holdings(08309) announced that on 27 August 2020, the Group received a letter from the Food and Environmental Hygiene Department of the Hong Kong Government informing the Group that Wanshing cleaning Services Limited, a wholly-owned subsidiary of the company, had suspended its bid for Fehd's cleaning services contract for a period of five years from 19 June 2020.

According to the notice, the auction was suspended because Wancheng Clean contravened the Occupational Safety and Health Ordinance on June 19, 2020 and was ordered to be fined HK $6000 because a Wancheng Cleaner was injured in an accident during his probation.

As Wancheng Clean is a major subsidiary of the company and most of its revenue comes from cleaning services contracts awarded by the Fehd, the Board expects that the suspension of bidding will adversely affect the Group's revenue and profitability.

In view of the suspension of bidding, the company will arrange for another subsidiary which is eligible to bid for Fehd's cleaning service contract to replace Wanshing Clean's role in bidding for Fehd's cleaning service contract in the future, so as to mitigate the above adverse impact on the Group.

On the other hand, the Group is also seeking legal advice and will consider initiating legal proceedings to appeal against irregularities and ╱ or revoke irregularities and apply for a review of the suspension decision, so as to lift the suspension if the case is successful, while Wancheng Clean will reinstate its eligibility to bid for Fehd's cleaning services contracts.