On 5 July, Granville Holdings (01707.HK) disclosed the results of the Construction Industry Council's regulatory action on Group d subsidiary Geotechnical Resources Limited ("Geotechnical Resources") in respect of the fatal accident that occurred in March 2020.

Geotechnical Resources is currently a general civil engineering registered subcontractor under the Construction Industry Council registered Professional contractors system (formerly known as the "Sub-contractor Registration Scheme") ("the Scheme"). He specializes in three types of work, namely (I) road drains and sewers; (ii) geotechnical engineering; and (iii) geotechnical exploration. In order to participate in public projects commissioned by certain government departments and statutory bodies, subcontractors are required to register under the scheme before the commencement of the project. With regard to the conviction arising from the incident, the Construction Industry Council held a disciplinary hearing on 9 June 2021 and issued a letter on 21 June 2021. It was decided to suspend the qualification of geotechnical resources as a registered subcontractor in the general civil engineering category of geotechnical work ("geotechnical category") for a period of six months ("suspension") with effect from 6 July 2021.

Taking into account that (I) the suspension will not affect the operation of the Group's existing projects; and (ii) the Group can still undertake geotechnical works under the scheme by another subsidiary of the Group, which is also a registered subcontractor under the same geotechnical category, the Board is of the view that the suspension will not have a material adverse impact on the Group's operating and financial position.

In addition, geotechnical resources are approved public works material suppliers and specialist contractors maintained by the Development Bureau (SDB). The categories are "landslip Preventive / remedial works for slopes / retaining walls" (approved qualifications), "site investigation works" (Group I qualifications); and approved contractors on the list of approved public works contractors under the category "site formation" (Group B trial contractors). The investigation team of the Bureau of Development conducted an investigation on 30 June 2021 to consider whether geotechnical resources caused or contributed to the accident, and if so, what regulatory action should be taken.