Investor Rights: Investors' Rights in Major Asset Restructuring

1.&Nbsp;What is a major asset restructuring?

Answer: Major asset restructuring refers to the act of a listed company and its controlling or controlling companies purchasing, selling, or replacing assets to a certain standard and causing a change in most of the company's assets.

If a listed company undergoes a major asset restructuring, it often has a significant impact on its stock price. This is because, after a major asset restructuring, the company's fundamentals often undergo significant changes, and even undergo a complete transformation. Therefore, investors must have an understanding of major asset restructuring activities.

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2.&Nbsp;What are the standards for major asset restructuring?

Answer:two thousand and eightyearfivemontheighteendayThe implementation of the "Management Measures for Major Asset Restructuring of Listed Companies" clearly stipulates the standards for major asset restructuring in terms of total assets, operating income, net assets, etc. Any of the following situations is considered a major asset restructuring:

（one）The proportion of the total amount of assets purchased or sold to the total amount of assets at the end of the audited consolidated financial accounting report of the listed company for the most recent fiscal year reaches50%Above;

（two）The proportion of the operating revenue generated by the assets purchased or sold in the most recent fiscal year to the operating revenue of the audited consolidated financial accounting report of the listed company in the same period reaches50%Above;

（three）The proportion of the net assets purchased or sold to the net assets of the listed company at the end of the audited consolidated financial accounting report for the most recent fiscal year reachesfifty%Above, and exceedingfive thousandRMB 10000.

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threeWhat rights do shareholders have during major asset restructuring?

Answer: According to the law, for major asset restructuring, shareholders attending the shareholders' meeting should2/threeThe above voting rights are approved. If assets are restructured into related party transactions, related shareholders still need to avoid them.

However, the approval of the shareholders' meeting does not necessarily mean that the restructuring can be implemented, and it must be reported to the China Securities Regulatory Commission, which will ultimately decide whether to approve it.

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fourWhat is the review process for major asset restructuring?

Answer: Due to the significant impact of major asset restructuring on investors, the China Securities Regulatory Commission will pay special attention to it during its review. The previous discussion was only about the general situation of major asset restructuring, which will be reviewed by the China Securities Regulatory Commission in accordance with the prescribed workflow. There is also a more special type of major asset restructuring, where the intensity of asset restructuring is greater than that of general major asset restructuring. After the restructuring, the main business of the company undergoes significant or even complete changes, and some industries have also changed, almost similar to new companies. In this case, it is also necessary to be reviewed by the Merger and Reorganization Committee under the Issuance Review Committee of the China Securities Regulatory Commission, which means that from the perspective of securities regulation, this type of asset restructuring has almost been raised toIPOHere we go. This more special situation refers to:

The proportion of the total amount of assets sold and purchased by a listed company to the total amount of assets at the end of its audited consolidated financial accounting report for the most recent fiscal year has reached70%Above. This is more than a typical major asset restructuring50%The proportion is much higher; （two）The listed company sells all operating assets while purchasing other assets. This indicates a comprehensive and fundamental change in the company's main business; （three）Other situations that the China Securities Regulatory Commission deems necessary to submit to the Merger and Reorganization Commission for review during the review.

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fiveWhat are the information disclosures for major asset restructuring?

Answer: Due to the significant impact of major asset restructuring on company stocks, there are special requirements for listed companies in terms of information disclosure regarding major asset restructuring:

（one）On the next working day after the board of directors makes a resolution, a listed company needs to disclose at least: the board of directors' resolution and the opinions of independent directors; Major asset restructuring plans for listed companies;

（two）A listed company shall announce the following documents at the latest along with the notice of convening a shareholders' meeting: a major asset restructuring report, an independent financial advisor report, a legal opinion, an audit report, an asset evaluation report, and an audited profit forecast;

（three）Announcement of the major asset restructuring resolution made at the shareholders' meeting on the next working day;

（four）After receiving the decision from the China Securities Regulatory Commission on whether to approve it, it shall be announced on the following working day.