Recall of Independent Director Paused, Reliable Holdings' Two Major Shareholders' "Internal Conflict" Continues

21st Century Business Herald Reporter Zhu Yiyi Reports

A-shares’ “Number One in Elderly Care Products” Reliable Co., Ltd. (301009.SZ) has canceled its planned extraordinary shareholders’ meeting scheduled for March 12, stating, “It will make appropriate arrangements based on the progress of related work and actual circumstances.”

The proposal to remove Mr. Jing Naiquan from his position as an independent director was also put on hold.

At the end of February, Reliable Co. published a 27-page, over 20,000-word announcement revealing internal conflicts and disputes within the company. The board of directors decided to remove Jing Naiquan, citing that he “has lost independence, failed to fulfill his duties diligently, and lacks professional integrity as an independent director.”

Although Jing Naiquan himself and director Bao Jia both voted against the proposal, it was approved by the board with five votes in favor.

“The company’s reason for removal is absurd, superficial, and illegal. It is initiated due to disagreements with major shareholders over work matters and is a serious provocation to the domestic independent director system,” Jing Naiquan expressed strong opposition.

On March 13, a reporter from 21st Century Business Herald contacted Jing Naiquan for details, but he refused the interview.

Regarding the progress of this proposal, the reporter also called the company’s investor relations department, which responded, “Please refer to subsequent announcements.”

In fact, behind the controversy over the removal of the independent director, deeper conflicts stem from ongoing “internal strife” between the company’s two major shareholders, Jin Liwei and Bao Jia, following their divorce.

Proposal to Remove Independent Director, 27-Page Announcement Details Grievances

A lengthy 27-page, over 20,000-word announcement publicly exposes internal turbulence within Reliable Co.

The announcement states that the board of directors proposed to remove Jing Naiquan as an independent director, citing that he “has lost independence, failed to fulfill his duties diligently, and lacks professional integrity.”

The proposal was approved by the board with 5 votes in favor and 2 against, and still requires approval at the shareholders’ meeting.

According to Reliable Co.'s 2024 annual report, Jing Naiquan previously served as an associate professor in the Department of Finance at Zhejiang University, a master’s supervisor, and deputy director of Zhejiang University’s Financial Investment Research Center.

As an independent director and chairman of the company’s Compensation and Evaluation Committee, Jing Naiquan’s original term was from January 19, 2024, until the end of the fifth board of directors (a three-year term).

He also serves as an independent director at Shengyi Technology (600183.SH), another A-share company with a market value in the hundreds of billions.

Jing Naiquan strongly opposed the removal, stating in the announcement, “The company’s reasons for removal are absurd, superficial, and illegal. It is initiated due to disagreements with major shareholders over work matters and is a serious provocation to the domestic independent director system.” He emphasized that during his tenure, all board votes were based on the legality and compliance of the matters, prioritizing the company’s interests, and he had voted differently from both major shareholders on various occasions.

The trigger for the removal was a dispute over director Bao Jia’s compensation.

In November 2025, an investor questioned Bao Jia’s high salary of 2.43 million yuan in 2024 on the Shenzhen Stock Exchange’s interactive platform, noting that Bao Jia served as general manager for only 19 days in 2024.

Regarding the legality of Bao Jia’s compensation, Reliable Co. stated, “On December 23, 2025, during the company’s Compensation Committee discussion, Jing Naiquan, knowing that the company’s ‘Remuneration Management System’ stipulates non-independent directors do not receive allowances, and knowing that Bao Jia did not provide labor or services to the company in 2025, demanded to classify Bao Jia’s controversial high salary as ‘responsibility allowance.’ When other committee members questioned the compliance, Jing Naiquan made extreme remarks like ‘others can’t control this,’ attempting to hinder normal compliance audits and performance reviews.”

Jing Naiquan offered a different account.

“He said, ‘The core of the company’s Compensation Committee is to review executive compensation… but only provides a final assessment score.’ He pointed out, ‘The company refused to provide detailed performance evaluation materials I requested, only wanting to engage in power struggles. I believed the meeting did not meet the review conditions and left… until I received the company’s termination notice.’”

Regarding Bao Jia’s subsequent salary arrangements, Jing Naiquan further stated, “First, it must be confirmed whether Bao Jia is still an employee of the company. If so, based on her current salary, does the general manager have corresponding responsibilities and assessments? If not, she should be evaluated accordingly. If she is not an employee, then the company can refer to how other external directors are compensated, such as allowances, based on her value and role in the company.”

He even proposed, “If Bao Jia is still an internal director and Chairman Jin Liwei is unwilling to continue employing her as an employee with salary, then the company should directly terminate her contract and resolve her compensation issues through resignation.”

However, Reliable Co. believes that when core issues such as Bao Jia’s “improper personal interests, large salaries, and authority attribution” are involved, Jing Naiquan and Bao Jia have formed a de facto alliance, making it impossible to maintain the impartiality and fairness required of an “external independent third party.”

Regarding her high salary in 2024, Bao Jia explained, “My labor relationship with Reliable Co. is still legally ongoing.”

She emphasized, “My pre-tax annual salary of 1.2 million yuan in 2024 was adjusted and determined by Chairman Jin Liwei when I was appointed as vice president in 2021,” adding that an additional pre-tax amount of 1.22554 million yuan was a business bonus for helping the company achieve its performance targets.

In Bao Jia’s view, “Chairman Jin Liwei’s repeated public criticisms of Jing Naiquan and attempts to dismiss her are mainly because Jing dares to speak frankly and insists on principles.”

Despite differing accounts from both sides, internal fractures within Reliable Co. are evident.

Escalation of the Power Struggle Between the Two Major Shareholders

In fact, the deeper conflict behind the removal controversy stems from the “internal strife” between the company’s two major shareholders, Jin Liwei and Bao Jia, following their divorce.

Review of the announcement shows that Bao Jia, born in the 1980s, joined Reliable Co. in 2004 and has held various positions including International Sales Director, E-commerce Director and Market Brand Director, Vice President of Public Relations and Sustainability, HR and Administration Director, Special Assistant to the Chairman, and Deputy General Manager. From September 2022 to January 2024, she served as General Manager. Additionally, from December 2018 to September 2024, she was Executive Director and General Manager of the subsidiary Reliable Welfare (Hangzhou) Technology Co., Ltd.

In late February 2024, the company announced that Jin Liwei and Bao Jia, formerly spouses, had amicably dissolved their marriage and made arrangements regarding share division.

Following the division of shares, Jin Liwei holds voting rights for 93 million shares (34.2465% of the total), while Bao Jia holds voting rights for 68 million shares (25.1292%).

According to the latest third-quarter report in 2025, Jin Liwei and Bao Jia hold 30.13% and 29.13% of the company’s shares, respectively, ranking as the first and second largest shareholders.

Notably, just before their divorce in late January 2024, Bao Jia resigned from her position as General Manager.

Since then, the differences between the two have become apparent. Despite no longer being General Manager, Bao Jia, still a director, has voted against or abstained from many company resolutions, including the 2024 annual report, quarterly reports for 2025, related-party transactions, and senior management appointments.

For example, in October 2025, Bao Jia voted against the third-quarter report, citing that “Chairman and General Manager Jin Liwei’s forced promotion of the Dudi baby diaper brand through agency sales—despite losses in 2024—also incurred losses in the first half and third quarter of 2025,” publicly questioning Jin Liwei’s management decisions.

In response, Reliable Co. stated, “The agency sales of Dudi are part of a strategic layout to expand channels and improve production line utilization. From January to September 2025, revenue increased by 61% year-on-year through product optimization, channel focus, and offline expansion, significantly reducing losses and gradually improving operations.”

Additionally, Bao Jia pointed out that the company’s management, financial, and consulting expenses have been rising sharply since 2024, while revenue growth has remained weak, and she repeatedly urged control and cost reduction in board meetings and written communications.

Beyond the boardroom conflicts, Reliable Co.'s fundamentals are also under pressure.

Since going public in June 2021, the company’s revenue has been 1.186 billion yuan, 1.186 billion yuan, 1.081 billion yuan, and 1.079 billion yuan from 2021 to 2024, showing four consecutive years of negative growth. Net profit attributable to shareholders was 40 million yuan, -43 million yuan, 20 million yuan, and 31 million yuan, with fluctuations.

In the first three quarters of 2025, the company reported revenue of 829 million yuan (up 5.12%) and net profit of 28 million yuan (up 26.79%). Despite overall growth, the third quarter alone showed a net loss of 290,000 yuan, with a non-recurring net loss of 1.63 million yuan.

Profitability uncertainties are also reflected in the company’s stock price, which has been under continuous pressure.

As of the close on March 13, Reliable Co.'s stock price was 12.22 yuan per share, roughly the same as its IPO price of 12.54 yuan in June 2021. Over the past two years (March 2024 to March 2026), the stock price has fallen by 48%.