Shanghai Film disclosed that the company and its controlling subsidiaries have been involved in 13 litigation and arbitration cases over the past 12 months, with a total amount involved of 283 million yuan, accounting for 16.84 percent of the most recent audited net assets. Among them is a newly added major lawsuit in which the company is the defendant and the amount involved is 122 million yuan. The plaintiff, Shanghai Chenyun Industrial Co., Ltd., filed suit over the transfer of a 51 percent equity stake in Tianxia Piaocang (Shanghai) Network Technology Co., Ltd., requesting confirmation that the Shanghai Property Rights Transaction Contract was terminated on June 4, 2024, and demanding the return of the equity transfer payment. The first-instance hearing in the case has not yet opened. Shanghai Film said it will continue to follow the progress of the litigation and fulfill its information disclosure obligations in accordance with regulations. The company previously estimated net profit attributable to the parent for the first half of the year at 15 million to 19.5 million yuan, a year-on-year decline of 72.1 percent to 63.73 percent, with net profit after deducting non-recurring items at minus 2.6 million to minus 2 million yuan. As of the close on August 22, the company's share price had fallen 42.89 percent cumulatively this year, with a latest market value of 7.33 billion yuan.
Shanghai Film Co LtdCompany faces a major lawsuit over an equity transfer, with potential financial liability and legal uncertainty.
