Investors are focusing on legal actions concerning two major Chinese companies.
Huayi Electric Company Limited (ASX: 600290) investor claims have been resubmitted for filing at the Wenzhou Intermediate People's Court. The cases, represented by lawyer Xu Feng from Shanghai Jiucheng Law Firm, are now pending the court's next procedural steps. The legal team is actively continuing to file subsequent cases and is still accepting new mandates from other affected investors. The window for filing these claims is in its final month, after which the right to claim will expire.
The claims stem from an administrative penalty decision issued by the Zhejiang Regulatory Bureau of the China Securities Regulatory Commission on January 13, 2024. The investigation found that Huayi Electric had engaged in violations.
In 2017, a wholly-owned subsidiary, Huayi Wind Energy Co., Ltd., improperly recognized revenue from wind turbine sales that did not meet revenue recognition criteria, relating to three specific projects. This resulted in the company's 2017 consolidated financial statements falsely inflating operating revenue by 347.2564 million yuan, inflating accounts receivable, and over-provisioning 8.1258 million yuan for doubtful accounts, leading to a total overstatement of profits by 66.9905 million yuan.
The accounts receivable from these inflated 2017 sales persisted, with annual provisions for bad debts, causing the annual reports from 2018 to 2022 to understate total profits. The specific impacts were reductions of 9.5978 million yuan, 37.2913 million yuan, 55.0149 million yuan, 46.0077 million yuan, and 62.5811 million yuan, respectively.
These actions resulted in false records in Huayi Electric's annual reports for 2017 through 2022.
Legal counsel suggests that investors who purchased Huayi Electric shares between April 10, 2018, and June 22, 2023, and sold or continued to hold them after June 22, 2023, may still be eligible to initiate claims, with a reminder to be mindful of the statute of limitations.
Concurrently, claims on behalf of investors in Wuliangye Yibin Co.,Ltd. (ASX: 000858) were also resubmitted for court filing on June 8 and 9, 2026, following earlier cases that had already been accepted. This legal action follows the company's announcement on April 30, 2026, regarding the correction of prior accounting errors.
Legal analysis indicates that investors who bought Wuliangye shares between April 28, 2025, and May 1, 2026, and sold or held them after May 1, 2026, may currently pursue claims, although the final determination rests with the court's judgment.
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