Proxy advisory firm Glass Lewis issued a controversy alert for China High Speed Transmission Equipment Group (HKG:0658) shareholders ahead of the company's extraordinary general meeting scheduled for March 31, according to a recent release.

The alert relates to the company's lawsuit against shareholder Fullshare Holdings for alleged funds misappropriation, which led to about 6.64 billion yuan in estimated losses.

The company moved two extraordinary general meetings from 2025 to June 2028 after Fullshare requisitioned them for the removal of seven directors, citing worries over a subsidiary's control.

Eight directors voluntarily resigned in January.

There was also an auditor change at last year's annual general meeting, with the company appointing HLB Hodgson in the role after the removal of Baker Tilly.

Fullshare challenged the appointment and proposed Prism as the company's auditor, while HLB Hodgson declined to resign and pointed to several unresolved audit issues.

Relevant proposals in the upcoming meeting include the replacement of the auditor amid unresolved audit matters and accounting and auditing practice issues, Glass Lewis said.

The alert's rationale relates to egregious governance practice and falls under board oversight issue, and other governance issue.