On July 3rd, Huabao Group, a tobacco frangrance company listed on the Shenzhen Stock Exchange, issued a notice stating that it had received a notification regarding the cancellation of the designated residential surveillance of Ms. Zhu Linyao, the actual controlling person, by the Yongchuan District Public Security Bureau in Chongqing.
Huabao Group has repeatedly disclosed the investigation and house arrest of Ms. Zhulin Yao, the actual controller of the company, due to alleged legal violations, along with relevant public announcements.
- On January 24, 2022, Huabao Corporation announced that it had recently received a notice of case filing from the Leiyang City Supervision Committee in Hunan Province, stating that they have initiated an investigation into the illegal activities of their actual controlling person, Zhu Linyao. On January 26, 2022, Huabao Corporation received information from the family of Zhu Linyao that she has been placed under residential surveillance at a designated location.
- On July 26, 2022, Huabao Corporation announced that they have been informed by the family of Mrs. Zhu Linyao that she has been released from residential surveillance by the Changsha County Public Security Bureau and has been placed on bail pending trial. Furthermore, on the same day, the company received a notification from its indirectly-held subsidiary, Huabao International Holdings Limited (referred to as "Huabao International"), stating that they have received a notice of case filing from the Xinfeng County Supervision Committee, as they have decided to initiate an investigation into Mrs. Zhu Linyao.
- On January 20, 2023, Huabao Corporation announced that they have been informed by the family of Zhu Linyao that she has been released from residential surveillance by the Anyuan County Public Security Bureau and has been placed on bail pending trial. At the same time, the Yongchuan District Public Security Bureau in Chongqing City has implemented residential surveillance on Mrs. Zhu Linyao in accordance with the law.
The original announcement is as follows:
"Hua Bao Fragrance Co., Ltd.
Progress Announcement on Investigation of the Actual Controller of the Company
Hua Bao Fragrance Co., Ltd. (hereinafter referred to as the "Company") has disclosed on January 24, January 27, July 26, and January 20, 2023, the investigation and designated residential surveillance of Ms. Zhu Linyao, the actual controller of the company, on suspicion of illegal activities. For more details, please refer to the announcements titled "Announcement on the Investigation of the Actual Controller of the Company," "Announcement on the Reply to the Shenzhen Stock Exchange's Inquiry Letter," and "Announcement on the Progress of the Investigation of the Actual Controller of the Company.
On July 3, 2023, the company received a notice stating that Ms. Zhulinyao, the actual controlling person, had been relieved of the designated residence surveillance by the Yongchuan District Public Security Bureau in Chongqing.
The designated media for information disclosure by the company are China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily, and the CNINFO website (http://www.cninfo.com.cn). The information released by the company shall be based on the information published in the above-mentioned designated media. Investors are advised to make rational investments and pay attention to investment risks. This announcement is hereby made.
Huabao Flavor & Fragrance Co., Ltd.
Board of Directors"
July 3, 2023
According to reports, Huabao Group's stock price soared in the morning of July 4th after its announcement was made public, with the intraday increase reaching over 9%. Huabao Group's major shareholder, the Hong Kong-listed company Huabao International, also experienced a significant surge of over 30% during trading. However, on the morning of July 5th, Huabao Group's stock price dropped slightly, with a decline of 2.18%, while Huabao International's increase was 2.7%.
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