Lancang Tea (06911) involved in a 30 million loan dispute has been ruled in the first instance to be jointly responsible and will appeal according to legal procedures.

Lancang Tea (06911) announced that on June 30, 2026, the company and Guangzhou Kangrui received a "Civil Judgment" from the court ((2025) Ji 0108 Min Chu 8666) (first instance judgment). According to the first instance judgment, the court made the following main decisions: 1. Guangzhou Minghui Technology Co., Ltd. (Guangzhou Company), Guangzhou Kangrui must return RMB 30 million to Hebei Hua'en Trading Co., Ltd. (Hebei Company); 2. Guangzhou Company, Guangzhou Kangrui must pay a penalty of RMB 1 million and related interest to Hebei Company; 3. Ms. Wang Juan, Mr. Zhang Muheng, Guangzhou Tiansu Information Technology Co., Ltd. and the company bear joint and several liability for the above-mentioned debts; and 4. The company, Guangzhou Kangrui, Guangzhou Company, Ms. Wang Juan, Mr. Zhang Muheng, Guangzhou Tiansu Information Technology Co., Ltd. must bear the case acceptance fees and litigation preservation fees. The first instance judgment is a preliminary judgment, and the company and Guangzhou Kangrui plan to hire legal representatives to appeal according to the statutory procedures. After investigation, it was found that Ms. Wang Juan and Mr. Zhang Muheng's improper issuance of authorization letters and personal guarantees have damaged the interests of the group. The board of directors has requested the two parties to bear the responsibility of clearing the debts involved in the litigation case. The two parties have irrevocably committed and guaranteed to bear all losses caused to the company and Guangzhou Kangrui by the litigation case. The board of directors will take all necessary measures (including but not limited to initiating civil litigation and other legal proceedings) to hold the responsible parties accountable in accordance with the final judgment of the litigation case and the actual economic losses incurred by the group, in order to protect the legitimate rights and interests of the group and the company's shareholders. As the first instance judgment is not final, and the company and Guangzhou Kangrui plan to appeal in accordance with the law, the final outcome of the litigation case and its actual impact on the group's financial condition and operating results are still uncertain. If the first instance judgment is upheld or if the related responsibilities are ultimately borne by the company and/or Guangzhou Kangrui, the potential liabilities that the group may face include the RMB 30 million mentioned in the first instance judgment, the penalty of RMB 1 million, related interest, case acceptance fees, and litigation preservation fees. The specific amounts will be determined based on the final judgment, interest calculation, actual execution, and the results of the company's recovery efforts from the responsible parties.