Seven Wolves Group Subsidiaries Have Not Reported Truthfully The Operation Of Private Placement Has Been Ordered To Correct.

The decision of the Xiamen Securities Regulatory Commission of China Securities Regulatory Commission (CSRC) on administrative supervision measures has been released recently by the China Securities Regulatory Commission website. It has been revealed that Hua Shang equity investment limited liability company (hereinafter referred to as "Hua Shang equity") has not truthfully reported the investment operation of the privately managed fund engaged in entrusted loan business, and is in violation of the twenty-fifth provision of the Interim Measures for supervision and management of private equity funds.

According to the thirty-third provision of the Interim Measures for supervision and management of private investment funds, the Xiamen securities regulatory bureau has decided to take administrative supervision measures to correct the stock rights in China and record them into the trustworthiness archives. Hua Sheng equity should attach great importance to it, seriously study private laws and regulations, take effective measures to actively rectify and reform. According to the relevant provisions of the Interim Measures for supervision and management of private investment funds, improve reporting mechanism, improve internal control and strengthen compliance management, and submit a report of rectification to Xiamen Securities Regulatory Bureau within 30 days from the date of receipt of this decision. Xiamen securities regulatory bureau will check the rectification situation.

According to China economic net reporter's inquiry, Hua Shang equity is a wholly owned subsidiary of Fujian seven wolf (002029) Group Co., Ltd. In addition, the seven wolf group is the parent company of the Fujian seven wolves industrial Limited by Share Ltd (002029.SZ). As of March 31, 2019, it had 259 million shares of seven wolves, and its shareholding ratio was 34.29%, the largest shareholder.

The twenty-fifth provision of the Interim Measures for the supervision and management of private investment funds stipulates that the managers of private equity funds shall timely report and update the relevant information of managers and their employees regularly, the investment and operation of private equity funds and the application of bars in accordance with the provisions of the fund industry association, so as to ensure the authenticity, accuracy and completeness of the contents submitted. If there is any major matter, it shall report to the fund association within 10 working days.

The managers of private equity funds shall submit the annual financial reports audited by accounting firms to the Fund Industry Association for 4 months after the end of each accounting year and the basic investment situation of the managed private equity funds.

The thirty-third provision of the Interim Measures for supervision and management of private equity funds: private equity fund managers, private equity fund trustees, private equity fund sales institutions and other private service institutions and their practitioners violate the provisions of laws, administrative regulations and these measures. The CSRC and its dispatched offices may take administrative supervision measures such as ordering corrections, supervising conversations, issuing warning letters, and public condemnation.

　　 The following is the original text:

Decision of Xiamen Securities Regulatory Commission on taking corrective actions against China Shang equity investment limited liability company

Hua Shang equity investment limited liability company:

After investigation, your company did not truthfully report on the investment operation of the privately managed fund managed by the private equity fund, and violated the twenty-fifth provision of the Interim Measures for the supervision and management of private equity funds (hereinafter referred to as the "measures").

According to the provisions of article thirty-third of the measures, our bureau decides to take administrative supervision measures to order correction for your company and record it into the trustworthiness archives. Your company should attach great importance to it, seriously study private laws and regulations, take effective measures to actively rectify the situation, improve the reporting mechanism, improve internal control and strengthen compliance management in accordance with the relevant provisions of the "measures", and submit a report on the completion of the rectification to our bureau within 30 days from the date of receipt of this decision. I will check the rectification situation.

If they are not satisfied with the supervision and management measures, they may apply to the China Securities Regulatory Commission for administrative review within 60 days from the date of receipt of this decision. They may also bring a lawsuit to the people's court having jurisdiction over the matter within 6 months from the date of receipt of this decision. During the period of reconsideration and litigation, the above supervision and management measures shall not be suspended.

Xiamen Securities Regulatory Bureau

August 7, 2019