HC Group (the “Company”) has announced the resignation of PricewaterhouseCoopers (PwC) as auditor, effective 20 March 2026, and the proposed appointment of Rongcheng (Hong Kong) CPA Limited to fill the vacancy until the next annual general meeting.
PwC’s Departure • PwC’s resignation followed protracted discussions over three unresolved audit matters for the year ended 31 December 2025: 1) “Prepayment Issue” – large prepayments and refunds within the B2B segment that lacked complete purchase documentation and showed overlapping contact details with Group entities; 2) “Recognition Issue” – timing of recognising prepaid transportation costs and related government subsidies in the cotton-trading business; 3) “Going Concern Issue” – sufficiency of 12-month cash-flow forecasts and related stress tests. • PwC reported receipt of insufficient information and no update on an independent investigation it had requested. • PwC estimated additional audit fees of HK$0.80–1.00 million to conclude the 2025 audit, which the Board declined.
New Auditor Proposal • The Board, on Audit Committee (AC) recommendation, selected Rongcheng on 23 March 2026. • The AC cited Rongcheng’s governance structure, independence, listed-company experience, audit timetable and resource allocation. • Rongcheng’s audit fee for FY2025 is set at RMB2.20 million (approximately HK$2.40 million, excluding out-of-pocket expenses). • Rongcheng plans targeted procedures to resolve the three audit issues, including supplier site visits, document reviews, cut-off testing and updated going-concern assessments.
Shareholder Approval & Key Dates • An Extraordinary General Meeting (EGM) will be held on 21 August 2026 in Beijing to: 1) confirm PwC’s resignation; and 2) approve Rongcheng’s appointment and remuneration. • Register of members will be closed from 19 August 2026 to 21 August 2026; shareholders must lodge transfers by 4:30 p.m. on 18 August 2026 to qualify for voting.
Trading Suspension • Trading in HC Group shares has been suspended since 18 March 2026 pending publication of FY2025 results and remains halted until resumption guidance is met.
No other circumstances connected with the change of auditor were reported by the Board or AC.