*ST Velvet ((000982): Progress Of Controlling Shareholders' Litigation

Stock Code: 000982 securities short: *ST velvet notice number: 2019-59

Ningxia Bank of China Limited by Share Ltd's progress announcement on controlling shareholder's 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.

I. Basic information on litigation matters

(1) the first instance of the case

Ningxia BOC cashmere industry International Group Co., Ltd. (hereinafter referred to as "Zhong Rong Group"), Ma Shengming and the three person, Shanghai Tang Cheng Kai Yi Fu investment center (limited partnership) (hereinafter referred to as "Yi Fu investment"), and Ningxia Silk Road equity investment partnership (limited partnership) (hereinafter referred to as "Silk Road investment") on disputes related to the privatization of the Shanda game agreement, and the middle duty group and Ma Shengming to the Shanghai first intermediate people's court, requesting the plaintiff to cancel the agreement of cooperation between the company and the defendant, Zhong Rong Group and the defendant Ma Shengming two. The defendant and defendant two will be compensated for the loss of 286 million 710 thousand yuan by the plaintiff, and the costs of litigation and property preservation shall be borne by two defendants. In July 2017, Shanghai Hao De Asset Management Co., Ltd. (hereinafter referred to as "Hao De company") because of

In the case of the above contract dispute, the first intermediate people's Court of Shanghai applied for the preservation of property, and requested that the 89600000 shares of the company or its equivalent assets held by the cashmere group of the respondent be frozen and sealed up.

The No. 1 Intermediate People's Court of Shanghai issued in August 16, 2017 (2017) the 307 "civil ruling" in the early 01 and early Republic of China ruled that the 89600000 shares of the company or the equivalent assets seized by the Cashmere Group in accordance with the law were frozen according to law, and the above-mentioned shares of the company were executed in August 25, 2017.

The first intermediate people's Court of the first instance court issued the civil judgment of the first intermediate court of Shanghai in March 29, 2018 ([2017] No. 307 in Shanghai and 01 early Republic of China). The court of first instance ruled as follows: (307)

1. The cooperation agreement between ho Tak and Cashmere Group and Ma Shengming was signed in March 17, 2015.

"Discussion";

2, the Cashmere Group and Ma Sheng Ming should pay 20 million yuan of the company's ten days from the date when the judgment comes into force.

3, dismissed the other claims of the company.

(two) the second instance of the case.

Hao Tak and Cashmere Group, Ma Shengming, the original third person Yi Fu investment, silk road investment in other contract disputes, refused to accept the first intermediate people's Court of Shanghai (2017) Shanghai 01 early Republic of China 307 civil judgment, to the Shanghai Higher People's Court (hereinafter referred to as "Shanghai high court") appeal.

The Supreme Court of Shanghai founded a collegial panel in accordance with the law in June 11, 2018 and opened the court in July 11, 2018.

Hao De company appealed: second yuan and third items were revoked in the first instance, and the joint compensation of Zhong Rong Group and Ma Sheng Ming was changed to 286 million 710 thousand yuan.

Yi Fu agrees with Ho Tak's appeal opinion.

The appeal request of the Cashmere Group and Ma Sheng Ming: revoke the original trial and change the sentence to reject all the claims of the company.

Silk road investment agrees with the appeal opinions of Cashmere Group and Ma Sheng Ming.

In September 10, 2018, the court of final appeal of the Shanghai court of second instance made the final judgment, and issued the "civil judgment of the Shanghai Higher People's court" (2018), "Shanghai Min 338".

1, maintain the first and third civil judgments of Shanghai No. 1 Intermediate People's Court (2017), Shanghai 01 and early Republic of China 307.

2, revoke the first intermediate people's Court of Shanghai (2017), second of the 307 civil judgments of Shanghai and 01 early Republic of China.

3, the appellant Zhong Rong Group and Ma Sheng Ming shall pay the appellant Hao De company's RMB 50 million yuan within ten days from the date when the judgment comes into force.

The case acceptance fee of the first instance is RMB 1475350 yuan, which is RMB 1218060 yuan (not paid) by the company. The Cashmere Group and Ma Sheng Ming jointly bear 257290 yuan. The property preservation fee is RMB 5000 yuan, which is jointly borne by the Zhong Rong Group and Ma Shengming. The cost of accepting the case for the second instance is RMB 1475350 yuan, which is RMB 1218060 yuan (already paid) by the company of Germany, and the middle duty group and Ma Sheng Ming jointly bear RMB 257290 yuan (not paid enough).

This judgment is final.

The above information is detailed in the announcement of our company's "2017-94 Ningxia silver Limited by Share Ltd" on September 8, 2017 that the partial shareholding of the controlling shareholder has been frozen by law, as well as the announcement of "2018-113 Ningxia silver cashmere industry Limited by Share Ltd" on November 28, 2018.

Two. The latest progress of the above litigation cases.

Recently, when the company verified the situation that the controlling shareholder's shares were frozen by law, it was informed that, in view of the above cases, the Cashmere Group and Ma Sheng Ming refused to accept the civil judgment of Shanghai Higher People's Court (2018) Shanghai Min 338 No. 338, and applied for a retrial to the Supreme People's Court of People's Republic of China, and requested the withdrawal of the higher people's Court of Shanghai.

(2018) the civil judgment of Shanghai Min 338 No.

After examining the Supreme People's Court of People's Republic of China, the Supreme People's court held that the application of retrial by Zhong Rong Group and Ma Sheng Ming could not be established. The civil ruling of the Supreme People's Court of People's Republic of China was issued to the parties concerned. {(2019) Supreme Law, No. 1681, No.

The application for retrial of Cashmere Group and Ma Sheng Ming was rejected.

Three. The situation of the stockholders' shares being pledged, the judicial freeze and the weather freeze

As of the announcement day, the controlling shareholder of the Cashmere Group owns 481496444 shares of the company, accounting for 26.6751% of the total share capital of the company, and 481496000 shares of the company's total Pledged Shares, accounting for 26.675% of the total share capital of the company, accounting for 99.9999% of the shares held by the Cashmere Group; 481496444 of the shares held by the Cashmere Group are all frozen by the judiciary and their shares have been frozen for 10 times.

Four, the company's impact and risk warning

The company's shares held by the Cashmere Group have been subject to judicial freeze due to litigation, which has not seriously affected the daily production and operation of the company.

The shares of the cashmere group can not be sold directly or be liquidated in the two tier market before the thaw.

However, if the Cashmere Group is subject to judicial disposal after being frozen by justice and waiting for a freeze, it may lead to a change in the actual control of the company.

The company will continue to pay attention to the follow-up progress of the above matters and urge relevant parties to fulfill their duty of disclosure in a timely manner.

We invite investors to pay attention to investment risk.

All information disclosed by the company is based on the information published in the China Securities Daily, the securities times, the Securities Daily, the Shanghai Securities Journal and the www.cninfo.com.cn.

Five. Reference documents

1, the civil ruling of the Supreme People's Court of People's Republic of China {(2019) supreme law, Shen Shen 1681}.

This is hereby announced.

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

Two May 31st 19