Pengxin International Mining Co Ltd – Litigation over Performance‑Compensation Claims

Pengxin International Mining Co Ltd (stock code 600490), a Shanghai‑listed company in the metals and mining sector, filed a lawsuit against its actual controller, Jiang Zhaobai, and Jiang Lei on 28 January 2026. The suit seeks the repayment of a performance‑compensation package that the company claims was not honoured by the defendants.

Background of the dispute

  1. Acquisition of Ningbo Tianhong Yihua (宁波天弘) In 2018, Pengxin issued 220 million new A‑shares and paid 400 million CNY in cash to acquire the 100 % stake in Ningbo Tianhong Yihua. Through this transaction, Pengxin gained indirect control of CAPM African Precious Metals, whose key asset is the Onjin mine in South Africa.

  2. Performance‑compensation agreement The company and Jiang Zhaobai and Jiang Lei signed a “Performance‑Compensation Agreement” in October 2017. The agreement set a seven‑year performance‑compensation period (2018‑2024) and tied compensation to a target net profit of 1.944 billion CNY, as audited by an external accounting firm.

  3. Actual results From 2018 to 2024, Ningbo Tianhong generated a net profit of only 16 million CNY in 2020 and incurred losses in the remaining six years, culminating in a cumulative loss of 364 million CNY. The shortfall relative to the target was 2.308 billion CNY.

  4. Compensation demand Pengxin calculated that Jiang Zhaobai and Jiang Lei should provide a cash payment of 414 million CNY and 22 million CNY of shares (valued at the 27 January 2026 close price of 10.16 CNY per share, amounting to 223.5 million CNY). The total amount of the claim is therefore 266.5 million CNY.

  • On 27 January 2026, Pengxin received the “Case Acceptance Notice” from the Shanghai Second Intermediate People’s Court.
  • Pengxin filed the lawsuit, naming Jiang Zhaobai (actual controller) and Jiang Lei (board director) as defendants.
  • The claim includes the compensation payment, accrued interest, litigation costs, and 22 million shares of the company.
  • Pengxin argues that the defendants’ failure to pay constitutes a fundamental breach of contract and has severely harmed the company’s legitimate interests.

Current status and market reaction

  • The lawsuit was announced following a series of failed negotiations and the company’s repeated requests for the defendants to fulfil the compensation obligation.
  • As of 26 January 2026, the cobalt‑metal concept sector was up 2.70 % and saw net inflows of 228 million CNY from institutional investors. Pengxin’s own share price dropped 10.56 % to 10.16 CNY on 26 January, reflecting market concern over the litigation and the company’s financial exposure.
  • Pengxin’s market capitalization is approximately 22.77 billion CNY, and its price‑earnings ratio stands at 88.6. The company’s 52‑week high and low are 10.50 CNY and 3.06 CNY, respectively.

Implications

Pengxin’s legal action highlights the risks associated with large acquisition‑linked performance guarantees in the mining sector. The outcome of the case will determine whether the company can recover the compensation owed and whether the defendants’ obligations will be enforced by the court.

The company remains under scrutiny from shareholders and regulators, and its share price is likely to remain volatile until a resolution is reached.