Duojia Holdings (02479) said an independent investigator has completed a forensic review of chip prepayments, cash management notes and recharge service prepayments, and found the three types of transactions had some commercial rationale and substance, according to ETNet.
The company said internal control weaknesses were identified in areas including due diligence before investment, risk identification, supplier management, internal approvals, and contract and seal management. It added that with the resignation of the former management and strengthened controls, the obstacles to resuming trading have been largely removed, but its shares remain suspended.
On chip prepayments, the company said it paid about HK$63.1 million to four suppliers in 2024 to buy Nvidia chips. After adjustments to its procurement plan, all chips and servers were delivered by the end of March 2025 and put to use in AI model training, fine-tuning and multimodal experiments.
For the cash management notes, Duojia said it subscribed to three notes with a principal amount of $10 million, but the issuer has not repaid principal or made any distributions. The company has taken legal action and on August 23 signed a deed of assignment with former chairman and controlling shareholder Zuo Lei to sell the notes for $10 million, or about RMB67 million. It said it has received the full consideration, and the transaction still needs approval from independent shareholders at an extraordinary general meeting on the 30th of this month.
The company also said it made advance payments of about RMB193 million and RMB88 million to two suppliers in 2024 for recharge services. The review found the arrangements were in line with industry practice and had commercial substance, but noted shortcomings in supplier due diligence, assessment of prepayment size and ongoing monitoring.
Duojia said the former management involved in approving the matters resigned from all executive and management roles on August 30. Its audit committee and board believe the issues that led to the suspension have been largely resolved, but trading will remain halted until resumption guidance is met.