Zhitong Finance App News, Zhongyuan Construction (09982) issued an announcement. On March 19, 2024, KPMG sent a letter (letter) to the Audit Committee stating that KPMG required certain unprovided information (unprovided information) to complete their audit of the 2023 annual results. The unprovided information relates to ten loans (totaling approximately RMB 750 million) provided by the company to various real estate companies.

These loans are made by the company to its existing strategic clients to assist the relevant customers to successfully acquire and develop a number of plots (since the company will be appointed as a contract construction service provider for such plots, these loans are expected to bring a win-win situation for the company and related customers). These loans are all of the same nature, including those disclosed in the company's announcements dated April 13, 2023 and December 27, 2023.

Such unprovided information includes: documents relating to the two loans made in the second half of 2023, including loan agreements; the company's internal approval records for each loan; the borrower's direct written confirmation of the loan; the company's bank documents and other documents relating to transfers; the company's credit risk assessment of the relevant borrowers and their respective ultimate beneficial owners and related anticipated credit losses; and arranging on-site visits and interviews with such borrowers by KPMG to understand the use of the loans.

The company is preparing to provide all such unprovided information. However, in particular for certain unprovided data involving outsiders (i.e. the company's current strategic customers), contacting such outsiders to comply with the request will take quite some time, but since such outsiders are not within the company's control, there is significant uncertainty about the time and extent of cooperation required to ultimately cooperate with them.

As far as the directors know, know and are satisfied, the standard audit procedure requires certain supporting documents and information relating to any significant loan made by the company.

According to KPMG, at the date of the announcement, KPMG had not completed its audit work and was therefore unable to comment on its audit opinion.

After considering all of the above factors, the Board concluded that the unprovided information or correspondence did not reveal any fraud or irregularities, and that there were no audit issues other than those disclosed above that delayed publication of the 2023 Annual Results.

The company will work closely with its new auditor, Shin-Ei Sinohe (Hong Kong), to provide all required information and documents to complete the audit process as soon as possible. As of the date of this announcement, the company has reached an agreement with Shin-Ei Sinohe (Hong Kong) on the schedule and corresponding audit fees.

According to section 13.50 of the listing rules, if an issuer fails to publish regular financial information in accordance with the listing rules, the Stock Exchange will usually request a suspension of trading in the issuer's securities, and the suspension will usually continue to take effect until the issuer publishes an announcement containing the required financial information.

As a result, stock trading will be suspended from 9:00 a.m. on April 2, 2024, pending publication of the 2023 annual results.