Fullshare is aware of recent allegation of fraud (the “Allegation”) made by China High Speed Transmission Equipment Group Co., Ltd (“CHS”) in relation to receivables and pre-payments of certain CHS subsidiaries (the “CHS Subsidiaries”) of approximately RMB6.64 billion (the “Receivables”) and hereby set things straight as follows:

The Allegation, at least insofar as it refers to Fullshare, is completely groundless and is no more than a conjured-up assertion to mask the misconduct of certain members of the CHS board. We at the outset must make it absolutely clear that Fullshare has no involvement in any transactions to which the Receivables or impairment related (the “Transactions”)

（i）We fail to see how Fullshare could be said to be involved in any Transactions or the Receivables.

（ii）It is imperative to note that (i) the CHS board, led by Mr. Hu Yueming, the chairman and CEO, along with his son, Mr. Hu Jichun, and other directors, are responsible for continuously monitoring and authorizing substantial fund transfers within the CHS Group companies, in particular, the CHS Subsidiaries; and (ii) significant questions arise regarding the CHS board's ability to fulfill its responsibilities effectively, particularly in overseeing and monitoring CHS’s trading business, as well as CHS’s internal control system, when issues concerning considerable sums such as the Receivables emerge.

（iii）We fully endorse CHS’s decision to initiate independent investigation over the Receivables. We have consistently sought to engage with CHS to clarify the background surrounding the Receivables and to obtain insights into the status and findings of the independent investigation. Regrettably, these efforts have been met with a persistently uncooperative and, at times, an unwarranted hostility from CHS.

The above corroborates with our view that Mr. Hu Yueming and Mr. Hu Jichun were unsuitable to act as directors of CHS, hence the requisition made on 14 March 2025 for an extraordinary general meeting of CHS (the “EGM”) to remove and appoint CHS directors (the “Requisition”). We make it clear that the Requisition was made because of unexplained and undisclosed transactions that appear to be seriously detrimental to the interests of shareholders of CHS as a whole, such that we have no option but to exercise our shareholders rights to effect a change of board composition

NHS Articles Amendment

（i）In late November 2024, Fullshare discovered that Nanjing High Speed Gear Manufacturing Co., Ltd (“NHS”) amended its articles of association in relation to, among others, the increase in the number of directors and the corresponding nomination rights of NHS shareholders (“NHS Articles Amendment”) in or around late September 2024 based on publicly available information.

（ii）NHS Articles Amendment clearly serves to remove Fullshare’s and CHS’s absolute control over board of directors of NHS. NHS was already controlled by CHS and there is no logical reason and commercial justification for the need to abandon control through NHS Article Amendment and then to re-create control through a concert party agreement (“Concert Party Agreement”) entered into between Nanjing Gear Enterprise Management Co., Ltd, a wholly owned subsidiary of CHS (“NGM”) and Jinhu Shifu Corporate Management Limited Partnership* (金湖釃福企業管理合夥企業(有限合夥) ( a 6.98%-shareholder of NHS and controlled by Mr. Hu Yueming (“Jinhu LP”), pursuant to which Jinhu LP would procure the respective directors nominated by it ( i.e. 2 out of 9 ) to vote in the same manner as those nominated by NGM at board meetings of NHS ;

（iii）It's worth highlighting that the role of Jinhu LP captures considerable interest and curiosity: why is Jinhu LP given a right to appoint (2) two of the directors of NHS when his employer, CHS through its 100% owned NGM, with over 50% shareholding, is only given a right to appoint 4 directors.

（iv）It is only due to the Concert Party Agreement between NGM and Jinhu LP, CHS can effectively control (6) six out of (9) nine directors of NHS Board and the financial results of NHS be remained consolidated into the financial statements of CHS and of Fullshare for the year ended 31 December 2024.

（v）The Concert Party Agreement includes a key termination clause that allows Jinhu LP to unilaterally terminate the agreement under certain circumstances. If this happens, NHS will cease to be a subsidiary of CHS and Fullshare, and its financial results will be deconsolidated from their accounts.

（vi）Objectively, the Concert Party Agreement taken together with the NHS Articles Amendment is evidence of an undisclosed poison pill implanted by Mr. Hu Yueming and his son Mr. Hu Jichun. This begs the question as to whether the NHS Articles Amendment has been effected with the best interests of NHS and its shareholders CHS as a whole, or merely to serve Hu Yueming’s and Mr. Hu Jichun’s personal interests.

（vii）Additionally, there had already been an attempt to amend the articles of NHS in 2022 by Mr. Hu Jichun and Mr. Hu Yueming, which was reversed in face of strong opposition from Fullshare.

Long term maintenance service contract (“AVIS Contract”) between NHS and Nanjing AVIS Transmission Technology Co., Ltd. (南京安維士傳動技術股份有限公司) (“AVIS”)  

（i）CHS’s obfuscation of facts relating to the terms of AVIS Contract, and failure to explain the appropriateness of, the AVIS Contract in the circular of CHS dated 3 April 2025 in relation to among others, the Requisition (“CHS Circular”) is a clear red flag. We wish to reiterate that based on the information we have received, the amount of RMB175 million is a fixed annual maintenance service fee, payable each year during the term from 1 January 2021 up to 31 December 2025 (i.e. a total of RMB875 million for five years), which is inconsistent with the information in the CHS Circular, which CHS alleged that the RMB175 million maintenance fee covers maintenance of over 5,000 gearbox equipment for 5 years.

（ii）It is apparent that the relationship between NHS and AVIS as well as the AVIS Contract clearly played a significant role in shaping the terms of the the disposal (“AVIS Disposal”) of 51% equity interest in AVIS by the selling shareholders of AVIS (“Selling Shareholders”) to Shenzhen Fenghe Energy Investment Co., Ltd. (深圳峰和能源投資有限公司), a joint venture indirectly owned 50% by Shenzhen Expressway Corporation Limited, a joint stock limited company incorporated in the PRC with limited liability in 2021.

（iii）Based on publicly available information, we note that the majority of the Selling Shareholders are from CHS Group, and AVIS has maintained a close cooperative relationship with CHS Group.

Despite our repeated requests and attempts to communicate with CHS to obtain information/documents and address the issues and our concerns about these unexplained and undisclosed transactions, up to the date of this press release, we have only met with the unnecessarily uncooperative and even hostile attitude of CHS. This ongoing lack of transparency is concerning and manifests the unsuitability of the Mr. Hu Yueming and Mr. Hu Jichun to act as CHS directors.

As the controlling shareholder of CHS, we were left with no choice but to make the Requisition in a bid to protect the interest of Fullshare. We emphasise that we will take strenuous actions, including without limitation to resorting to legal actions by CHS against any person for any breach of duties or wrongdoings to the detriment of the CHS Group. 

Further, and importantly, even if the resolutions we proposed be passed at the EGM, the independent investigation over the Receivables will continue and there is no reason to suggest that the proposed new directors (“Proposed Directors”) will not do otherwise or will not work in good faith with operational management team to ensure continued stable and sustainable development of the CHS Group’s core businesses

（i）Fullshare is and will ensure that the Proposed Directors are, committed to key principles that promote stability and success of CHS:

     （a）Strong Corporate Governance and Transparent Oversight: We prioritize legal compliance and transparent governance structure to foster trust;

     （b）Core Team Integrity and Employee Assurance: We stand by CHS’s employees, guaranteeing that their positions, salaries, and benefits will not be disrupted and CHS’s operational management team, technical experts, and front-line employees will remain unchanged; and

     （c）Consistent Development Plans and Stable Business Partnerships: We are committed to enhancing CHS’s business partnership and its strategic growth initiatives will stay on course.

（ii）We would like to reassure everyone that Fullshare will endeavour to ensure that the ongoing independent investigation over the Receivables will continue. Our goal, through the Proposed Resolutions, is to enhance management oversight and operational transparency, ensuring the sustainable development of CHS and safeguarding the rights of CHS, Fullshare, and all stakeholders.

（iii）We expect the new CHS Board will continue to manage the CHS Group independently and will not take actions that would adversely affect loans advanced to NHS that are the subject of the letter of undertaking.

（iv）The Proposed Directors possess the requisite qualifications and relevant experience necessary for effective governance and operations of the CHS businesses. Furthermore, they demonstrate the character and integrity that are essential for individuals serving in such critical leadership positions within CHS.

（v）In response to the allegations in the CHS Circular relating to the Proposed Directors:

     （a）This is nothing but a malicious and unfounded attack on Mr. Li Zhbin's character. Li has obtained the Proof of No Criminal Conviction (無犯罪記錄證明) from the Nanjing Municipal Public Security Bureau (南京市公安局) disproving CHS's false claims regarding his involvement in tax offences. Furthermore, Mr. Li has been providing, directly and through its company, management consultancy services for a great number of enterprises. This reinforces Mr. Li's qualifications for the CHS Director role and highlights the lack of good faith and factual support in CHS's challenges. Mr. Li’s legal advisors have issued a formal letter demanding CHS to withdraw and apologise for the untrue making inaccurate allegations against Mr. Li.

     （b）Mr. Yang Qilin secured approval from Mr. Hu Yueming to work remotely and was never notified of any revocation of that approval. However, upon being nominated as a Proposed Director, he was unfairly removed from his duties. Mr. Yang was also acting within his scope of duties when he was handing the investment project in Dafeng District. Furthermore, Mr. Yang possesses over 30 years of experience in the mechanical equipment manufacturing industry, which qualifies him as a CHS Director.

     （c）Mr. Huang Shun possesses over 20 years of accounting experience and has a solid history as independent non-executive directors for companies listed on the Stock Exchange. The case mentioned in the CHS Circular has already been adjudicated by the court in a final judgment, ruling in favor of Jiangsu Verti-Hor CPA. As for the other case, it involved a lease contract dispute unrelated to any professional expertise, and the local court has resolved it through an out-of-court settlement. The company involved in non-substantial legal proceedings (i.e. claims of RMB654,000 and RMB60,000) as mentioned in the CHS Circular, and this alone should not have any bearing or reflect negatively on Mr. Huang’s personal character and integrity. The Company is also aware that, many of the companies which Mr. Hu Jichun has been its legal representative and the chairman of its board of directors are also involved in some legal proceedings, and Nanjing Lianxin Venture Capital Co., Ltd* (南京聯欣創業投資有限公司, Nanjing Lianxin) (of which Mr. Hu Yueming is its shareholder, legal representative, the chairman of its board of directors and general manager)is also subject to unsatisfied judgment.

We reiterate that the painstaking effort by the current CHS board to fabricate a link between Fullshare and the Receivables is an attempt to avoid the unearthing of the misconduct of certain members of the CHS board. We repeat that Fullshare has no involvement in the Receivables or any Transaction; that the Allegation, at least insofar as it refers to Fullshare, is completely groundless; and that we fully endorse and support the independent investigation over the Receivables.