The Tongliao Intermediate People’s Court will conduct a public auction on the Ali auction platform of Tongliao Intermediate People’s Court from 10:00 on November 4, 2020 to 10:00 on January 3, 2021 (except for delay). The auction target is 300,000 tons. Assets other than current assets of the coal-to-ethylene glycol project per year.

The starting price of the subject is 1,922,880,000 yuan, and the assessed price is 2,827,760,694 yuan. Participating in the auction is required to pay a deposit of 384,576,000 yuan, and each increase in price is 9614400 yuan.

The subject matter is all the production equipment and public auxiliary projects of the 300,000 tons/year ethylene glycol project of Inner Mongolia Cornell Chemical Industry Co., Ltd. Specifically include: fixed assets-buildings, equipment engineering materials, electronic equipment and vehicles; construction in progress: railway dedicated lines, buildings, structures and other auxiliary facilities, machinery and equipment, electrical equipment and instruments; intangible assets: land and Other intangible assets.

It is reported that Inner Mongolia Cornell Chemical Industry Co., Ltd. was established on November 12, 2010, and was caught in a dispute over 3.6 billion contract payments in 2018.

In May 2018, Donghua Engineering Technology Co., Ltd. issued an announcement and received the Inner Mongolia Autonomous Region Higher People’s Court on May 22, 2018 [Civil Judgment on Donghua Technology and Inner Mongolia Cornell Chemical Industry Co., Ltd. Litigation (2017) Inner Minchu No. 42]. The specific judgment is as follows:

1. Inner Mongolia Cornell shall pay Donghua Science and Technology project progress payment of RMB 5,055,549,400 and the overdue interest of RMB 3,243,579 as of February 28, 2017 within ten days after the effective date of this judgment, and pay the amount from March 1, 2017 to the actual payment Daily interest (calculated based on the interest rate of similar loans of the People’s Bank of China in the same period);

2. Donghua Technology will issue a bank performance guarantee letter of RMB 369,628,13 million to Inner Mongolia Cornell within ten days after this judgment becomes effective, and the validity period shall last until 6 months after the two parties pass the test run;

3. Donghua Technology will rectify the quality problems raised by Inner Mongolia Cornell within ten days after this judgment becomes effective, and rectify it to pass the inspection.

In March 2014, Donghua Technology and Cornell Chemical Industry Co., Ltd. signed the “Inner Mongolia Cornell Chemical Industry Co., Ltd. 300,000 tons/year coal-to-ethylene glycol project EPC/turnkey project general contracting contract”; April 2014 , Donghua Technology, Cornell Chemical Industry Co., Ltd. and Inner Mongolia Cornell signed the “Tripartite Agreement on Change of EPC/Turnkey Project General Contract Subject of Cornell Chemical Industry Co., Ltd. 300,000 tons/year Coal-to-ethylene Glycol Project”, Cornell Chemical Industry Co., Ltd. was replaced by Inner Mongolia Cornell Chemical Industry Co., Ltd. and changed as the contractor of the project.

In June 2014, Donghua Technology and Inner Mongolia Cornell signed the “Inner Mongolia Cornell 300,000 tons/year coal-to-ethylene glycol project EPC/turnkey project general contract supplementary agreement.” In June 2015, Donghua Technology and Inner Mongolia Cornell signed the “Inner Mongolia Cornell 300,000 tons/year coal-to-ethylene glycol project EPC/turnkey project general contract supplementary agreement (continued)” and adjusted the contract price to 3.69628 billion yuan.

It is reported that after the above-mentioned contract and supplementary agreement come into effect, Donghua Technology will carry out various work in accordance with the schedule agreed in the contract, and steadily promote the construction of the project as planned. However, since October 30, 2014, due to the funding problems of Inner Mongolia Cornell, the project has been in an abnormal state of implementation. Donghua Technology has maintained the project construction until the end of December 2016.

As of the end of August 2016, Inner Mongolia Cornell had approved a total of 2,671,504,300 yuan for the project progress, and the actual payment was 2,11,197,400 yuan, and 563.0069 million yuan was not paid.

On May 8, 2017, the Inner Mongolia Higher Court formally accepted the case. Donghua Engineering Technology Co., Ltd., in relation to Inner Mongolia Cornell Chemical Industry Co., Ltd.’s default of Inner Mongolia Cornell’s 300,000 tons/year coal-to-ethylene glycol project EPC/turnkey project general contracting project progress payment, etc. Inner Mongolia High Court filed a civil lawsuit.

The first phase of Fude Cornell’s 300,000 tons of ethylene glycol project is located in Lubei Industrial Park, Zalut Banner, Inner Mongolia, with an investment of 6.2 billion yuan and an annual output of 300,000 tons of ethylene glycol. The second phase of the project plans to invest 9 billion yuan and produce 600,000 tons of ethylene glycol per year. The project is EPC contracted by Donghua Engineering Technology Co., Ltd. The ethylene glycol production process adopts the Ube Kosan process, and the gasification technology adopts the Kelin dry powder coal gasification process to produce synthesis gas.