CHK OIL (00632) announced details of multiple oil product purchase agreements and related trade deposits made by its direct subsidiary, Palm Energy (Hainan) Co., Limited. These transactions involved prepayments to three suppliers—Anda Xingda Chemical, Jilin Songyuan Petrochemical, and Hainan Longyou Group Industrial—and subsequently triggered disclosure obligations under the Listing Rules. The company acknowledged an oversight in initially treating these transactions as ordinary procurement rather than categorized advances.
Palm Energy made trade deposit payments totaling RMB239.48 million to Anda Xingda Chemical from November 2023 to September 2025. The subsidiary took delivery of RMB226.37 million worth of oil products, and RMB0.11 million was refunded due to quantity discrepancies. As of the announcement date, RMB12.50 million remained unutilized. Legal proceedings were filed to recover any undelivered portion, with a mediated settlement reached in December 2025.
Palm Energy separately paid RMB111.89 million to Jilin Songyuan Petrochemical between April and May 2022 for up to 100,000 tons of condensate oil. Delivery and refunds reduced the outstanding balance, and the purchase framework agreement allowed for contract termination if delivery obligations were unmet by year-end 2022.
Under further agreements, Palm Energy deposited RMB133.73 million to Hainan Longyou Group Industrial from March 2024 to April 2025. Deliveries totaling RMB55.17 million were fulfilled, with RMB3.40 million refunded. RMB75.16 million remained unutilized, and the final deadline for deliveries or refunds was extended to June 2026, with a 3% annual interest rate on any remaining balance.
The company disclosed that each supplier deposit exceeded the 8% asset ratio threshold at various points, and incremental increases of 3% or more likewise triggered listing rule reporting obligations. Due to an inadvertent misunderstanding of the classification of these deposits, the disclosure was delayed. Remedial actions include mandatory training for directors and management, stronger internal monitoring of contract execution and payment reporting, closer collaboration with professional advisers for compliance matters, and enhanced procurement controls. The board has subsequently reviewed the procedures implemented since August 2025 and believes these measures sufficiently prevent similar oversights going forward.
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