*ST Middle Velvet (000982): Major Arbitration Progress

Stock Code: 000982 securities short: *ST velvet notice number: 2019-63

Announcement of major arbitration of Limited by Share Ltd of Ningxia cashmere industry

I. Basic information on arbitration matters

In September 2014, Lhasa and run Consulting Service Co., Ltd. (hereinafter referred to as "the first applicant") and Kaixin (Hongkong) Co., Ltd. (hereinafter referred to as "second applicants"), together with the first applicant, collectively referred to as "applicants", sold the 100% stake in the Beijing Zhuo Wen fashion textile Limited by Share Ltd (hereinafter referred to as "Zhuo Wen fashion"), and signed the "equity pfer agreement" with the Ningxia Bank of China (hereinafter referred to as "the first respondent" or "the company") and the Oriental Cashmere Company Limited (hereinafter referred to as the "second respondent").

Since the respondent failed to pay the balance of equity pfer at the agreed time, in October 16, 2015, the applicant signed a supplementary agreement with the respondent, supplemented the agreement on Zhuo Wen's pfer of shares, and signed the "equity pledge contract", which will be pledged to the applicant by 75% of the Zhuo Wen fashion.

In December 2018, the applicant submitted an arbitration to the China International Economic and Trade Arbitration Commission on the related issues of Zhuo Wen's equity pfer. For details, the company disclosed in December 11, 2018 the "2018-118 major arbitration announcement of Ningxia Limited by Share Ltd in the information disclosure media".

After the disclosure of the above arbitration matters, the Shenzhen securities and Exchange Company management department issued the letter of concern to the Limited by Share Ltd of Ningxia's cashmere industry (the company's letter of concern 2018 [238th]).

We verified the concerns of the Shenzhen Stock Exchange, and disclosed in December 26, 2018 the "reply letter of the 2018-120 Ningxia Bank of China (Limited by Share Ltd) about the Shenzhen Stock Exchange Corporation's letter of concern [2018] 238th".

Two. The latest progress of the above arbitration matters.

In June 12, 2019, the company received the award of the China International Economic and Trade Arbitration Commission S20181629 dispute over share pfer agreement {(2019) China trade central 059482}, the arbitral tribunal's ruling was as follows:

(1) the first respondent and the second respondent shall jointly pay the remaining sum to the first applicant.

The principal amount of equity pfer is RMB 172939186.85 yuan, and the overdue interest is paid. The interest rate is RMB 14709757.12 yuan as at October 31, 2018. The interest after November 1, 2018 will be RMB 172939186.85 yuan, which is calculated on the basis of the 30% rise of the benchmark lending rate of the people's Bank of China at the same period.

The overdue interest is =172939186.85 x 4.35% x (1+30%) x (from November 1, 2018 until the day of liquidation) /365.

(two) the first respondent and the second respondent jointly pay the remaining second to the applicant.

The equity pfer principal is $14556732.01, and the interest is overdue. The interest rate as at October 31, 2018 is $2348457.52. The interest after November 1, 2018 is based on 14556732.01 dollars. According to the floating rate of 30% of the benchmark lending rate of the same period of the people's Bank of China, the formula is: overdue interest = 14556732.01 14556732.01 6.1190 x 4.35% x (1+30%) x (from November 1, 2018 to the day of liquidation) /365 /6.1190.

(three) the first respondent and the second respondent jointly assume the applicant's dispute over the case.

The lawyer fee paid is RMB 2400000 Yuan.

(four) the first applicant to Beijing, Zhuo Wen, the first applicant to the first applicant.

The price of discount, sale and auction of the 37 million 500 thousand shares of the fashion textile Limited by Share Ltd is entitled to the priority of compensation within the scope of full payment obligation of the first respondent.

(five) second of the applicants to Beijing, Zhuo Wen, who applied to second applicants for second hostages.

The price of discount, sale and auction of 18 million 750 thousand shares of fashion textile Limited by Share Ltd is entitled to the priority of compensation within the scope of full payment obligation of the second respondent.

(six) the arbitration fee in this case is RMB 1935394 yuan, which is borne by the first and second respondent.

The above arbitration fee has been offset against the equal amount of the arbitration prepayment paid by the two applicant to the Arbitration Commission. Therefore, the first and second respondent should pay 1935394 yuan to the two applicant to compensate the two applicant for the arbitration fee.

The respondent's duty of payment shall be fulfilled within 15 days from the date of the award.

The award is final and effective from the date of its making.

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 the arbitration of this announcement on the company's current profits or future profits.

Beijing Zhuo Wen fashion textile Limited by Share Ltd is a subsidiary company directly and indirectly holding 100% shares. If this arbitration event causes the company's shares held by the company to be discounted, sold or auctioned, it will involve changes in the controlling rights of the company.

The impact of this arbitration matter on the company's current or post profits is still uncertain.

Five. Reference documents

1, China International Economic and Trade Arbitration Committee S20181629 equity pfer agreement dispute

The motion award is {(2019) No. 059482 of China trade central Beijing}.

Notice hereby.

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

Two June 14th 19