Lufax Holding moves forward steadily with a fully upgraded governance system
Introduction: The value of a company ultimately returns to its sustainable profitability and potential to create returns for shareholders.
On the evening of January 27, $Lufax(LU.US) released a quarterly update announcement regarding the progress of its resumption of trading and its latest operational status. Based on previous public disclosures, the announcement further disclosed the supplementary investigation conclusions of an independent third-party investigation team regarding specific past transactions. At the same time, the company clearly stated that independent internal control reviews and multi-year audits are progressing in an orderly manner, and business operations remain normal.
01 Supplementary Investigation Results: The Original Intent of Specific Transactions and the Improvement of Internal Control Governance
According to the supplementary investigation results, Lufax Holding provided a series of loans to a third-party company, Decheng Investment, between 2017 and 2023. Some of these funds were used by Decheng Investment to acquire underlying assets of certain risky or high-risk financial products, with the aim of compensating retail investors who purchased related loss-making financial products through the platform.
The investigation pointed out that the accounting treatment of the related transactions did not fully reflect their economic substance. The clarity of this conclusion not only allows historical issues to be characterized and clarified but, more importantly, the company has faced the issues head-on and taken systematic remedial measures based on the investigation results, rebuilding credibility.
02 Internal Control Governance Upgrade: Learning from Issues and Moving Toward Higher Standards
Lufax Holding initiated a deep-level governance structure upgrade, such as reappointing executives and optimizing corporate governance—restructuring the board of directors, appointing a new independent non-executive director and chairman to enhance the independence of the board; establishing a special committee led by independent directors and an executive committee within management to drive internal control system upgrades.
Lufax Holding did not stop there. The latest move was the formal appointment of Deloitte Management Consulting as an independent internal control advisor to conduct a comprehensive review of the group's internal control policies and procedures, covering key areas such as corporate governance, financial reporting, and related-party transaction management. Currently, Deloitte has proposed improvement recommendations, and the company is implementing corresponding rectification measures.
The introduction of this "external brain" marks Lufax Holding's efforts to rebuild its internal control "immune system" to the highest standards, aiming to prevent similar situations from occurring at the institutional source. By introducing external professional capabilities, the company continues to strengthen the governance foundation for long-term development, demonstrating its firm commitment to protecting investor rights.
03 Resumption of Trading Progress and Business Operations: Orderly Progress, Stable Fundamentals
Regarding the progress of resuming trading, Lufax Holding is actively advancing related work, including cooperating with auditors to complete financial report audits and implementing internal control rectification measures. The company stated that it will make further announcements on the progress of resuming trading in accordance with listing rules.
In terms of business operations, Lufax Holding maintains a normal pace. The announcement also disclosed a summary of the operational situation for the fourth quarter of 2025. Data shows that as of December 31, 2025, Lufax Holding's total loan balance was RMB 183.8 billion, a year-on-year decrease of 15.2%, and the cumulative number of customers served increased to 29.1 million. Lufax Holding continues to optimize its business structure, with a consumer finance loan balance of RMB 59.6 billion and a non-performing loan ratio of 1.2% for consumer finance loans.
04 Conclusion: Internal Control Governance Upgrade, Protecting Investors' Original Intent
Lufax Holding's$LUFAX(06623.HK) latest announcement not only demonstrates its proactive improvements in internal control governance but also reflects its firm commitment to protecting investor rights. By introducing external professional capabilities, the company is rebuilding its internal control system to the highest standards, aiming to prevent similar situations from occurring at the institutional source. At the same time, the company's business operations remain normal, and its fundamentals are generally stable.
For long-term investors, the value of a company ultimately returns to its sustainable profitability and potential to create returns for shareholders. Lufax Holding's work over the past year has been clearing obstacles and laying the foundation for the release of this potential. As short-term disturbances are resolved one by one, the path to re-evaluating the intrinsic value of a more standardized, focused, and sustainable Lufax Holding has already begun.
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