74.85 million yuan! Disputes arise over investment in the polyether cooperation project, arbitration hearing between Aoke Co., Ltd. and Sinopec is imminent.

On March 21, 2024, Liaoning Okere Chemical Co., Ltd. (referred to as "Okere Co.") announced that it recently received a "Notice of Arbitration Proceedings for Case No. DC20243852 Concerning Memorandum Dispute" issued by the China International Economic and Trade Arbitration Commission (numbered [2025] China Interc. Econ. & Trade Arb. Comm'n Beijing No. 023743). According to the notice, the arbitration committee will hold a hearing on April 15, 2025 (Tuesday) to adjudicate the memorandum dispute between Okere Chemical and Sinopec Group Asset Management & Operation Co., Ltd. (referred to as "Sinopec").

On April 13, 2022, the 20th meeting of the fifth board of directors of Aoke Co., Ltd. reviewed and approved the proposal on participating in the new establishment project of Tianjin Polyether New Materials Co., Ltd. (in preparation) through public listing. The company agreed to participate in the new joint venture project at an appropriate price based on the information from the Polyether Department of Sinopec Tianjin Petrochemical Company, as publicly announced by the Beijing Property Exchange.

On May 31, 2022, Aoke Share received the "Notice of Confirmation of Qualification of Intended Investor" issued by Beijing Property Exchange, confirming the company as a qualified intended investor. The company signed the "Joint Venture Contract" with Sinopec and agreed that: Aoke Share would contribute RMB 249.5 million in cash, and Sinopec would contribute the assets of the Polyether Department of Tianjin Petrochemical, valued at RMB 166.1103 million. Both parties would jointly invest to establish a joint venture - Tianjin Aoke Polyether Co., Ltd.

● From April to June 2022, Aoke Company paid a 30% deposit (RMB 74.85 million) and the remaining 70% of the investment amount (RMB 174.65 million) to the Beijing Property Exchange, and received a capital increase certificate from the Beijing Property Exchange confirming that the company had fully paid the investment amount of RMB 249.5 million. However, the project's progress was not without difficulties.

On August 3, 2024, the 11th meeting of the 6th Board of Directors of OKE Co., Ltd. reviewed and approved the "Proposal on Terminating the Investment and New Project Cooperation for the Establishment of Tianjin Polyether New Materials Co., Ltd." The board agreed to terminate the cooperation between the company and Sinopec regarding the Tianjin Polyether project. On August 5, the company and Sinopec signed a Memorandum. In August, OKE Co., Ltd. received a refund of 70% of the investment amount, 174.65 million yuan, from the Beijing Property Exchange Center. The Beijing Property Exchange Center transferred 30% of the investment amount, 74.85 million yuan, to the designated account of Sinopec. The investment amount of 74.85 million yuan will be held in the designated account of Sinopec as stipulated in the Memorandum, pending resolution of the dispute.

In January 2025, the company submitted an arbitration application to the arbitration committee. The arbitration tribunal decided to hold a hearing on the memorandum dispute case on April 15, 2025 (Tuesday).

Aokexin Co., Ltd. is the largest and most widely distributed manufacturer of green low-carbon fine chemical new materials derived from epoxy ethylene in China, and one of the world's largest suppliers of such materials. The company focuses on research, production, and sales of eco-friendly, low-carbon fine chemical new materials derived from epoxy ethylene and ethylene. Currently, it has formed two major product sectors: traditional epoxy-derived products, including polycarboxylate superplasticizer monomers, pharmaceutical auxiliaries, and non-ionic surfactants; and new energy material products mainly consisting of Ethylene Carbonate (EC) and Dimethyl Carbonate (DMC).

The parties agreed that Oxiranchem would contribute 249.5 million yuan in cash (a 60% equity stake), while Sinopec would contribute assets from its Tianjin Petrochemical Polyether Division valued at 166.1103 million yuan, jointly establishing Tianjin Oxiranchem Polyether Co., Ltd.

OKE Corporation previously stated that the Polyether Department of Tianjin Petrochemical is located in the Binhai New Area of Tianjin, situated in the southeast of the city, bordering the Bohai Bay to the east. Its geographical advantage is evident, and the area is rich in resources. Additionally, the comprehensive public engineering facilities of Tianjin Petrochemical are well-equipped, which is conducive to leveraging the cost and competitive advantages of the upstream and downstream industrial chains. This can enrich the company's product structure and extend the polyether industry chain, further improving the company’s regional layout along the coast and rivers. Through this project, OKE Corporation will be able to improve its epoxy sector on the basis of existing epoxy ethane and its derivatives, smoothly enter the market for epoxy propane business, and achieve coordinated development of both businesses by leveraging the resource advantages of Tianjin Petrochemical.