The performance compensation lawsuit between Datong and China Huaying Technology has made significant progress. Management said today that the boards of directors of both parties have approved a settlement of RMB 768 million (approximately NT$3.423 billion).
[Reporter Fang Weijie/Taipei Report] The performance compensation lawsuit between Datong (2371) and China Huaying Technology has made significant progress. Management said today that the boards of directors of both parties have approved a settlement of RMB 768 million (approximately NT$ 3.423 billion) as a settlement condition. Compared with the original compensation amount of approximately NT$13.5 billion awarded by the Supreme People's Court of China, the potential compensation burden is expected to be reduced by approximately NT$10.077 billion, a decrease of 74.65%.
Looking back at the background of the case, the Supreme People's Court of China ruled at the end of 2025 that Datong, together with its subsidiaries CPT Bermuda and CPT, must be jointly and severally liable for the performance compensation dispute with China CPT, amounting to approximately RMB 3.029 billion (approximately NT$13.5 billion). After continuous negotiations between the two parties, significant progress was finally made, and the settlement amount was reduced to approximately one-quarter of the original judgment amount, which provided an opportunity to resolve this major litigation dispute.
Datong pointed out that the two parties had held separate board meetings today and decided to adopt RMB 768 million as a settlement condition. Subsequently, Datong will handle the procedures in accordance with the competent authorities and relevant legal regulations, while China Huaying Technology must submit the settlement case to the shareholders' meeting. Only after the shareholders' meeting approves, the two parties will formally sign the settlement agreement, which means that although a key consensus has been reached, the relevant procedures are still to be completed.
In terms of financial impact, Datong said that based on strict accounting principles, the company had recognized the relevant losses in full in the fourth quarter of last year. If the settlement conditions are formally determined, the amount will be reversed. Calculated based on the original judgment amount and the current settlement conditions, the difference between the two is approximately RMB 2.261 billion (approximately NT$10.077 billion). However, the actual amount that can be reversed, the timing of recognition, and the impact on earnings per share must still be handled in accordance with relevant accounting standards and accountant confirmation results. It is not yet possible to directly determine that the entire difference can be transferred to benefits.
As the Huaying Technology lawsuit gradually moves towards settlement, Datong will continue to promote financial structure optimization and business transformation. Management pointed out that this settlement will help focus operating resources on core businesses and long-term development. In recent years, it has actively integrated core advantages such as power equipment, energy management, renewable energy and smart infrastructure, and further laid out business opportunities in AI data centers and new generation power infrastructure.
Datong emphasized that in the future, it will continue to strengthen corporate governance, improve operational efficiency, and accelerate the group's resource integration and transformation layout. It hopes that as the Huaying Technology case makes significant progress, it will lay a more solid foundation for the next stage of growth and create long-term shareholder value.
