Xiaosong Co. shareholder proposes to remove director Xu Chi after he voted against half-year report and private placement

September 21 — During the midday trading break, Xiaosong Co., Ltd. (小崧股份) received a temporary proposal from its controlling shareholder, Jiasheng Times (嘉晟时代), seeking to remove director Xu Chi (徐驰) from his position as a non-independent director on the seventh board of directors.

The proposal was approved by a majority of the board and will be submitted for shareholder vote at the general meeting scheduled for September 30.

Xu Chi, however, submitted a lengthy written objection, challenging the proposal on four grounds: procedural compliance, grounds for removal, completeness of information disclosure, and the motive behind the proposal. He described the move as "retaliation against a director."

Controlling Shareholder: Director "Overly Influenced by His Nominating Shareholder"

According to the announcement, Jiasheng Times submitted a temporary proposal to the Xiaosong board on September 18, requesting that the "Proposal on Removing Xu Chi as a Non-Independent Director of the Seventh Board of Directors" be placed before the general meeting for deliberation. Jiasheng Times currently holds 9.43% of Xiaosong's shares and is the company's controlling shareholder.

In its proposal, Jiasheng Times alleged that during the preliminary review and deliberation of board-related motions, Xu Chi was "overly influenced by the opinions of his nominating shareholder, failed to exercise independent judgment in the interest of the listed company as a whole and all shareholders, and demonstrated a serious lack of independence in performing his duties." The shareholder claimed that Xu Chi's actions "violated the statutory duties of loyalty and diligence required of a director" and that he was no longer qualified to serve as a director.

The board reviewed the temporary proposal and agreed to submit the removal motion to the general meeting for consideration.

Xu Chi's Rebuttal: Procedural and Substantive Concerns

Xu Chi voted against the board's decision. In his written opinion, he noted that the proposal was dated September 18 — exactly ten days before the originally scheduled general meeting on September 28, which is the statutory deadline for submitting temporary proposals. However, Xu Chi stated that he only saw the proposal in the board's WeChat group on the afternoon of September 19, and that Chairman Liu Lingshuang (刘凌爽) confirmed during the meeting that the company had only received the proposal on the morning of September 19.

"If that is the case, the proposal has exceeded the statutory deadline for submitting temporary proposals and no longer meets the time limit requirements for a valid proposal," Xu Chi argued. He urged the company's securities department to verify the actual time of receipt and warned that "if the proposal is forcibly submitted, the resulting shareholder resolution would face the legal risk of being revoked."

Xu Chi further contended that the proposer, while seeking his removal, simultaneously nominated Luo Minghua (罗明华), one of the actual controllers of the proposer, to replace him as director. He argued that this "effectively highlights that the proposal is essentially a personnel arrangement made by the proposer for its own benefit, and its so-called 'independence' argument is logically inconsistent."

Xu Chi: Proposal Follows My Dissenting Votes on Half-Year Report and Private Placement

According to documents disclosed by the company in June, Xu Chi, born in 1968, holds a Master of Business Administration degree and has a legal background. He is currently a partner at Guangdong Xindesheng Law Firm (广东信德盛律师事务所) and also serves as an independent director at Bomin Electronics (博敏电子).

Tianye Yangguang (田野阳光) is the son of the company's late founder Tian Chou (田畴) and Jiang Xiaorong (蒋小荣).

In June, after passing a qualification review by the board's nomination committee, Xu Chi was nominated as a candidate for non-independent director on the seventh board. He was formally elected at the third extraordinary general meeting in early July 2026.

Xu Chi quickly demonstrated his independence after taking office.

On August 26, at the third meeting of the seventh board, which reviewed the company's 2026 semi-annual report, Xu Chi cast the sole dissenting vote. He stated that the report had "significant issues in areas such as major risk disclosure, accounting estimates and impairment provisions, revenue recognition methods, and data accuracy," and that he could not guarantee the truthfulness, accuracy, or completeness of its content.

Just two days later, at the fourth meeting of the seventh board on August 28, Xu Chi voted against all motions related to the company's 2026 private placement of shares to specific investors. The target of the private placement was the controlling shareholder Jiasheng Times and its related party, Shanghai Yanxi Chuangji Enterprise Management Co., Ltd. (上海炎曦创际企业管理有限公司). Xu Chi stated that after reviewing the proposal documents and cross-referencing with the semi-annual report, he found "significant concerns in four areas: fundamentals and going-concern capability, operational compliance, transaction arrangements, and control rights."

In his objection to the removal proposal, Xu Chi stated bluntly: "This proposal was submitted immediately after I lawfully voted against the 2026 semi-annual report and the private placement motion, and after I truthfully responded to the Shenzhen Stock Exchange's inquiry letter. Its targeted nature speaks for itself."

(Source: National Business Daily)