Jiu Rong Unit Receives Court Summons in Loan Dispute
Jiu Rong Holdings (HKG:2358) said its Hangzhou Lu Yun Property unit became the subject of a financial loan contract dispute initiated by the Bank of Communications (HKG:3328, SHA:601328), according to a Hong Kong bourse filing Monday.Shares of the TV maker fell nearly 8% in morning trade Tuesday.The group said the unit had received a written court summons and a notification of response to action by the Hangzhou Shangcheng District People's Court. A court hearing is scheduled to begin on May 13.The company's unit had previously failed to repay 3.5 million yuan of a 49 million yuan loan, prompting the action by the Bank of Communications.The lender is demanding repayment of 49 million yuan and 216,542 yuan in accrued interest.The bank is also seeking a court order to receive priority rights over the proceeds from the sale of 31 mortgaged real estate properties owned by the group.Jiu Rong said it is seeking legal advice on the matter and would work with the plaintiff to explore the possibility of reaching a settlement.The firm warned that the new lawsuit may exacerbate its existing liquidity constraints associated with other litigation, which have already resulted in the freezing of the company's bank deposits amount to 12.7 million yuan.