*ST Middle Velvet (000982): Major Litigation

All members of the company and the board of directors guarantee the authenticity, accuracy and completeness of the information disclosure. There is no false record, misleading statement or major omission.

1. The basic situation of the acceptance of this litigation matter.

The Limited by Share Ltd of Ningxia cashmere industry (hereinafter referred to as "the company") received the subpoena, civil complaint, notice of action and proof of proof in Lanzhou intermediate people's Court of Gansu province (hereinafter referred to as "Lanzhou intermediate court") in January 31, 2019. The company's civil litigation cases are as follows:

Two. The basic situation of litigation matters.

1. Litigants

Plaintiff: China Huarong Asset Management Limited by Share Ltd Gansu branch, domicile: No. 225 Wudu Road, Chengguan District, Lanzhou.

Legal representative: Zhou Zhihong.

Defendant 1: Ningxia Bank of China Duncan Clothing Co., Ltd., residence in Ningxia Lingwu City cashmere ecological textile park (Lingwu City south two Ring Road North via two Road East), the legal representative: Shi Lei.

Defendant 2: Ningxia cashmere cashmere Limited by Share Ltd, residence: Ningxia Lingwu ecological textile park (north side of south 2nd Ring Road, Lingwu City, east of two road), legal representative: Battle Yingjie.

Defendant 3: Ningxia Bank of China cashmere industry raw materials Co., Ltd., residence: Lingwu City cashmere Industrial Park, central bank Avenue.

Legal representative: Li Lin.

Defendant 4: Ningxia BOC cashmere industry International Group Co., Ltd., the place of residence: Lingwu ecological textile park, Ningxia (north side of South Second Ring Road, Lingwu City, east of two road), legal representative: Ma Sheng Ming.

Defendant 5: Ma Sheng Guo.

2. Facts and reasons stated in the original statement of the case.

In August 8, 2017, the plaintiff signed a "debt pfer agreement" with the three party of Ningxia Bank of China cashmere industry raw materials Co., Ltd. (hereinafter referred to as the Bank of China) and Ningxia Bank of China Duncan Garments Co., Ltd. (hereinafter referred to as Duncan clothing company), which agreed that the plaintiff was pfered at the price of 11 million 700 thousand yuan, and the defendant, the Bank of China cashmere materials company, had a loan obligation of 11 million 700 thousand yuan against the defendant Duncan clothing company, Y27170054-l.

On the same day, the plaintiff and the defendant Duncan clothing company signed the number "Gansu Y27170054-2" repayment agreement. Duncan clothing company was unable to repay all debts immediately because of its operational difficulties. The plaintiff agreed to grant a grace period of 24 months' repayment, that is, from August 11, 2017 until August 2019 ll.

At the same time, it also agreed that the delay in repayment of debts affected the utilization of the plaintiff's funds. Duncan clothing company needed to pay the restructuring grace allowance in addition to all debts.

The repayment arrangements for restructured debts are: 11 million 700 thousand yuan should be repaid on the day of the 24 months after the date of repayment grace.

The ratio of recombination grace allowance is 11.5% / year, and the payment shall be paid on the basis of the quarterly payment. The compensation for the current restructuring will be paid on the 15 day of every three months on the date of delivery.

The contract also provides that if the debt is not repaid in accordance with the agreement, the percentage of the restructured grace compensation will be increased to 18% / year from the date of the overdue date. Meanwhile, since the date of the overdue date, the cashmere company of the bank has paid off the unpaid part of the restructured Grace allowance by 0.5% per day.

The standard pays the plaintiff the penalty.

At the same time, the contract also agreed on the contents of guarantee, breach of contract and so on.

The property listed in the list of mortgages is mortgaged (the assessed value of collateral is 335 million 795 thousand and 200 yuan). At the same time, the mortgage agreement of Gansu has been signed. It is agreed that the property listed in the list of mortgages listed by the Bank of China (cashmere) Co., Ltd. shall be mortgaged (the valuation price of collateral is 4 million 889 thousand and 700 yuan). The above two mortgage agreements are all restructured debts, restructured grace compensation, penalty interest, penalty for breach of contract, compensation for damages, other payments due to the plaintiff, and other expenses to be paid by the plaintiff, as well as the expenses for the realization of the creditor's rights and all other expenses payable. The mortgages of the two mortgage agreements are registered in the administrative department for Industry and Commerce in August 9, 2017, respectively, in the two mortgage agreement of the Gansu (Y27170054-4). On the same day, the plaintiff signed the "mortgage agreement" with the Bank of China, Gansu Y27170054-3, which was provided to the plaintiff by the Bank of China Co., Ltd.

On the same day, the plaintiff signed a guarantee agreement with Gansu, Y27170054-5, and the "guaranty agreement" signed with Gansu, Y27170054-6.

The above guarantee agreement provides that the guarantee method is a joint and several liability guarantee. The scope of guarantee is restructured debt, restructured grace compensation, penalty interest, penalty for breach of contract, compensation for damages, other payments payable to the plaintiff, and expenses for the realization of claims and all other expenses payable under the Gansu Y27170054-2 repayment agreement.

The guarantee period is two years from the date of the expiration of the term of debt from the Gansu Y27170023-2 repayment agreement.

After the above contract was signed, the plaintiff paid a 11 million 700 thousand yuan pfer price to the defendant in August 11, 2017.

In October 18, 2018, the plaintiff sent the debt maturity notice to the defendant Duncan clothing company. In view of the fact that the defendant Duncan clothing company failed to fulfill its repayment obligations in accordance with the contract, the plaintiff announced that the debt was expired on the basis of the tenth Gansu Y27170023-2 agreement on repayment agreement, and demanded that the defendant promptly repay all the outstanding debts, such as restructuring debts, restructuring grace compensation and liquidated damages, within 2 days after receiving the letter.

After receiving the notice, Duncan clothing company confirmed the receipt of the debt maturity notice by adding the official seal.

But at the time of prosecution, the defendant Duncan clothing company still did not repay the remaining loan principal and restructured grace compensation and liquidated damages. The defendant, the Bank of China, the Bank of China group, the Bank of China raw materials company, and Ma Sheng Guo did not comply with the guarantee obligation.

After repeated charges by the plaintiff, the defendants also did not comply.

As of October 31, 2018, the defendant, the Bank of China, has accumulated 11 million 700 thousand yuan in arrears of plaintiff's principal loan, 964275 yuan in restructuring grace allowance, 357012.5 yuan in fines and 117396.09 yuan in liquidated damages.

3. Litigation request

(1) request that the defendant, Ningxia Bank of China Duncan clothing Limited, repay the plaintiff's principal amount of 11 million 700 thousand yuan, redress the grace compensation 964275 yuan, fines 357012.5 yuan, and liquidated damages 117396.09 yuan (restructured grace compensation, liquidated damages until October 31, 2018).

The above loan principal, restructured grace compensation, fines and liquidated damages shall be temporarily added to the total amount of 13138683.59 yuan.

(2) request that the defendant, Ningxia cashmere cashmere raw materials Co., Ltd., Ningxia Bank of China's cashmere Limited by Share Ltd, Ningxia BOC cashmere International Group Co., Ltd. and Ma Sheng Guo undertake joint and several liabilities for the debts.

(3) the plaintiff is required to give the plaintiff a priority claim in respect of the auction and sale of the 71 sets of machinery and equipment, such as gill machines, fine hang machines and other 71 sets of machines provided by the Ningxia cashmere industry Limited by Share Ltd.

(4) the costs borne by the plaintiff for the realization of the above claims shall be borne by the defendant.

Three. Other litigation and arbitration matters

As of the date of this announcement, no major litigation or arbitration matters should be disclosed and not disclosed by the company and the controlling shareholder.

Four. The possible impact of this announcement on the company's current profits or future profits.

The company will, in accordance with the accounting standards for enterprises and other provisions, sum up the principal and interest involved in the related litigation into liabilities and financial expenses, and the fees for accepting cases, compound interest and penalty interest will affect the performance of the company after the execution of the case.

We invite investors to pay attention to investment risk.

Five. Reference documents

"Summons", "civil complaint", "Notice of action", "proof of proof" and so on.

Notice hereby.

The board of Limited by Share Ltd of Ningxia BOC cashmere industry

Two February 1st 19