*ST Middle Velvet (000982): Litigation Progress

Announcement of proceedings of Limited by Share Ltd in Ningxia cashmere industry

In the case of group limited, Ma Shengguo and Zhang Yongchun, the plaintiff requested that the plaintiff be required to order the company to repay the principal, interest and penalty interest of the plaintiff in accordance with the law. The total amount of the plaintiff was 132448560.53 yuan; the plaintiff requested the plaintiff to give the plaintiff the 204 million 420 thousand and 900 shares of the company limited by the Bank of China, the 20 million stake of Ningxia silver import and Export Co., Ltd., the 18 million 750 thousand shares of Beijing Ningxia Fashion Textile Co., and the 50 million yuan equity share of the Jiangyin Zhong Rong Textile Co., Ltd., with the priority of compensation. The plaintiff requested that the defendant, Ningxia, Bank of China International Group Limited, Ma Shengguo and Zhang Yongchun be jointly liable for the above debts, and the defendant should bear the costs of litigation, announcement and preservation of the case. (1) the basic situation of litigation. The Limited by Share Ltd of Ningxia cashmere industry (hereinafter referred to as the "company") disclosed the plaintiff's Bank of China, Limited by Share Ltd, Ningxia Hui Autonomous Region, the defendant, Ningxia's Bank of China, and Ningxia's cashmere industry.

The above contents are detailed in our company's major litigation notice of 2018-112 Ningxia Limited by Share Ltd in the designated information disclosure media.

Two. The latest progress of the above litigation cases.

In May 20, 2019, the company received the civil mediation letter of the intermediate people's Court of Yinchuan, the Ningxia Hui Autonomous Region (hereinafter referred to as "Yinchuan intermediate people's court") ([2018] Ning 1303, No. 1303 of the early Republic of China]. During the hearing of the case, the plaintiff applied for withdrawal from the central court of Yinchuan on 22 April 2019 to the prosecution of Zhang Yong's spring, and the Yinchuan intermediate people's court made (2018) ning 01 civil law 1303 civil trial.

Book approval. After the mediation by the Yinchuan intermediate people's court, the parties voluntarily reached the following agreement:

1, the defendant, the Ningxia Limited by Share Ltd, paid back the 128 million 900 thousand yuan loan principal of the Bank of China, Limited by Share Ltd and the Ningxia Hui Autonomous Region, the interest rate of the loan was 3548560.53 yuan (provisional until October 21, 2018) and the interest rate from October 22, 2018 to the day when the principal was paid off (the interest rate was stipulated in the contract), and the loan principal was paid in installments from June 2019 to February 2020. In June 28, 2019, 10 million yuan was repaid, 11 million yuan was repaid in July 28, 2019, 12 million yuan was paid in August 28, 2019, 13 million yuan was paid in September 28, 2019, 14 million yuan was paid in October 28, 2019, 15 million yuan was paid in November 28, 2019, 16 million yuan was repaid, 17 million yuan was repaid, 20 million 900 thousand yuan was repaid, and the interest on loan was 3548560.53 yuan, which was repaid at once before payment.

2, if the defendant Ningxia cashmere cashmere Limited by Share Ltd fails to fulfill the above obligations, the plaintiff Bank of China, Limited by Share Ltd the Ningxia Hui Autonomous Region branch shall have the right to share the 204 million 420 thousand and 900 shareholding rights of Ningxia Bank of China Duncan Garments Co., Ltd., the 20 million stake of Ningxia China silver import and Export Co., Ltd., the 18 million 750 thousand stake of Beijing Zhuo Wen fashion textile import and Export Co., Ltd. and the Jiangyin central Velvet Textile Co., Ltd., which has the priority to claim compensation for the sale, auction and discount price of the Ningxia Bank of China, the Ningxia Hui Autonomous Region branch.

3, the defendant, Ningxia BOC cashmere International Group Limited and Ma Sheng Guo, are jointly and severally liable for the above debts.

4, the defendants of Ningxia cashmere industry Limited by Share Ltd, Ningxia Bank of China International Group Co., Ltd. and Ma Sheng state did not pay for the first phase. The plaintiff Bank of China, Limited by Share Ltd and the Ningxia Hui Autonomous Region branch have the right to apply for enforcement of all the accounts payable at any time.

5, the cost of litigation in this case is reduced by half by 352021.5 yuan, and the cost of preservation is 5000 yuan, which is borne by Ningxia cashmere cashmere Limited by Share Ltd, Ningxia Bank of China International Group Co., Ltd. and Ma Sheng state, and is now paid at once in June 2019 30.

The above agreement will not be violated by the law, and the Yinchuan intermediate people's court will confirm it.

This mediation is legally valid after it has been signed by the parties concerned.

Three. Other litigation and arbitration matters

As of the date of this announcement, there are no other major litigation or arbitration matters that 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 relevant litigation into liabilities and financial expenses, and the fees for accepting cases, compound interest and penalties will have a certain impact on the company's performance. We invite investors to pay attention to investment risk.

Five. Reference documents

1, the Ningxia Hui Autonomous Region Yinchuan intermediate people's court civil mediation letter [(2018) ning 01 early Republic of China No. 1303].

Notice hereby.

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

Two May 22nd 19