China High Speed Transmission Equipment Group Co., Ltd. (C Transmission, 00658.HK) has issued a circular proposing the removal of HLB Hodgson Impey Cheng Limited as external auditor and the appointment of Prism Hong Kong Limited. Shareholders will vote on the change at an Extraordinary General Meeting (EGM) scheduled for 3:00 p.m. on 31 March 2026 in Nanjing.
Key points from the circular:
1. Background of the Auditor Dispute • HLB Hodgson was appointed on 6 September 2025 following a tender process after Baker Tilly Hong Kong Limited was vetoed at the 27 June 2025 AGM. • Controlling shareholder Fullshare Holdings Limited, which owns 71.08 % of issued shares, has continuously challenged the validity of HLB Hodgson’s appointment and supports appointing its own auditor, Prism, citing efficiency in group-level audits. • Board views are split: four “New Directors” (appointed 16 January 2026) support convening the EGM; executive director Mr. Hu Yueming and independent director Ms. Jiang Jianhua oppose the change, warning of adverse consequences from a trading suspension.
2. Unresolved Audit Matters Highlighted by HLB Hodgson HLB Hodgson’s 27 February 2026 termination letter lists key outstanding issues in the FY2025 audit, including: • Trade receivables of RMB3.19 billion arising from the trading business. • Prepayments of RMB3.45 billion linked to the trading business. • Valuation of financial assets at fair value through profit or loss. The company does not dispute these items.
3. Prism’s Engagement Plan • Audit completion target: end-May 2026. • Total manpower commitment: 4,278 hours, led by Engagement Partner Alan Lee and Co-Engagement Partner Jamie Mak. • Additional first-year procedures will address opening balances and the unresolved matters. • A PRC component auditor will be engaged for mainland subsidiaries.
4. Regulatory Timetable and Trading Suspension Under Listing Rules 13.49 and 13.46, the FY2025 results announcement is due by 31 March 2026 and the annual report by 30 April 2026. With the audit unlikely to finish before end-May 2026, trading in the shares will be suspended from 9:00 a.m. on 1 April 2026 until the audited results are released.
5. Voting and Procedural Details • Record date: shareholders must be on the register by 4:30 p.m. on 25 March 2026. • Poll voting will be used for all resolutions at the EGM. • Should HLB Hodgson be removed and Prism appointed, Prism will serve until the conclusion of the next AGM, with its remuneration set by the Board.
Investors are advised to monitor the outcome of the 31 March 2026 EGM and the company’s subsequent timetable for publishing audited FY2025 financials, as trading will remain suspended until compliance with disclosure requirements is restored.