China Rare Earth probes subsidiary asset misappropriation

China Rare Earth Holdings (0769) set up an independent investigation committee on the alleged potential misappropriation of assets of two subsidiaries.

China Rare Earth has mandated legal advisors to conduct due diligence on two mainland subsidiaries, Yixing Xinwei Leeshing Refractory Materials Company and Yixing Xinwei Leeshing Rare Earth Company, according to a filing.

It was found out that subsidiaries were involved in a number of lawsuits and enforcement-related cases and the amount of due and unfulfilled debts involved may have exceeded the amount of the paid-up capital of the firms. Moreover, the subsidiaries have been included in the list of executors and restriction on high consumption in mainland China.

In addition, legal representative on behalf of Jiang Quanlong and Jiang Dawei, which, among others, raised concerns regarding the validity of the China Rare Earth’s acquisition of 1,600 kilograms of tungsten bars which was completed and announced on 16 June 2025 

The complaints had led to the accumulation of debt and frequent visits by banks and suppliers, said China Rare Earth.

Trading of China Rare Earth's Hong Kong-traded shares continues to halt.

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