*ST Velvet ((000982): Progress Of Controlling Shareholder'S Litigation Matters

Stock Code: 000982 securities short: *ST velvet notice number: 2019-106

Ningxia Bank of China cashmere Limited by Share Ltd manager's progress notice on controlling shareholder's litigation matters

The manager of the company guarantees the authenticity, accuracy and completeness of the information disclosure, without false record, misleading statement or major omission.

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

The announcement of Limited by Share Ltd's partial freeze on share ownership of the controlling shareholder in the Bank of cashmere is due to disputes with the controlling shareholder of Ningxia, the Bank of China International Group Co., Ltd. (hereinafter referred to as "Zhong Rong Group") and the Ningxia Zhong Rong Shengda equity investment partnership (Limited partnership) (hereinafter referred to as "Zhong Rong Sheng Da"). The party raised the application for property preservation. The the Ningxia Hui Autonomous Region high level court issued (2017) ning min Chu No. 14-1 "civil ruling" decided to freeze and seal up the bank deposits or equivalent property of 113 million 732 thousand and 997 yuan in the middle of the applicant's middle velvet group and middle velvet, and in March 28, 2017, the company held 12500000 shares of the company (accounting for 2.42% of the total number of shares of its holding company). The Limited by Share Ltd of Ningxia cashmere industry (hereinafter referred to as "the company") disclosed the "2017-27 Ningxia" in the specified information disclosure media in April 1, 2017.

Two, the latest progress of the above cases.

In October 18, 2019, the company manager received the civil judgment of the intermediate people's Court of Yinchuan, the Ningxia Hui Autonomous Region, which was transferred by the controlling shareholder of the company (2019) ning 756 in the early 01. The relevant litigation items are disclosed as follows:

Plaintiff's request for action:

1. the limited partner of Ningxia Zhong Peng Sheng Lian Investment Limited (hereinafter referred to as "Peng Sheng Yi Lian company"), Ma Shengming, Yinchuan Jinlun Lun company (hereinafter referred to as "Jintian Lun company"), Wu Meichun, Yinchuan silver trust asset management company limited (hereinafter referred to as "silver trust asset company"), Yinchuan Industrial Development Fund Company (hereinafter referred to as "industrial development fund company"), Zhongrong International Trust Co (hereinafter referred to as "China financial trust company"), for the executors, jointly and severally pay 125883582.14 yuan to the plaintiff's debt in the property limit retrieved from Zhong Rong San Da (the interest is temporarily suspended until March 27, 2019).

2. the limited partner of the Ningxia Cashmere Group Co., Ltd., the new energy limited company (hereinafter referred to as "New Energy Company of the BOC"), is the limited partner of the cashmere Shengda Group, which is a limited liability partner of the judgment, and is paid 125883582.14 yuan for the plaintiff's debt within the limit of its subscribed amount (the interest is temporarily suspended until March 27, 2019).

3. decides that the defendant shall bear the cost of litigation in this case.

The facts and reasons are as follows:

The dispute between the plaintiff and the defendant in Zhong Shengda was made by the higher people's Court of the Ningxia Hui Autonomous Region on August 10, 2017. (2017) ning min Chu fourteenth civil judgment, which decided that Zhong Rong San paid the debt to the plaintiff and paid the interest from the date of the expiration of the judgment from the date of February 25, 2017 to the date of the judgment (according to the same benchmark lending rate of the people's Bank of China) for a total of 108806400 yuan. The defendant, cashmere group company, was jointly and severally liable for the above debts and jointly paid the case costs 610465.

The cost of preservation is 5000 yuan. In the course of execution of the case, the plaintiff applied to the Yinchuan intermediate people's court for additional enforcement of Lingwu City State owned company, Bank of China New Energy Company, Ma Shengming, Peng Sheng Yi Lian, Jin Tian Lun, Wu Mei Chun, Yin Xin asset company, industrial foundation company and China Trust Company as the executors. In March 11, 2019, the Yinchuan intermediate people's court made (2019) the executive ruling of Ning 01 Jian Yi 20. The case in question was subject to confirmation by legal procedure, and the application of the plaintiff was rejected by the plaintiff.

The enlisted person, Zhong Rong Sheng Da, was set up in November 3, 2014. The nature of the business is limited partnership. The registered capital is 2 billion yuan, and the executive partner is the Bank of China group. The limited partners and the amount of contribution are: 1 billion yuan invested by China financial trust company, 440 million yuan by the Bank of China New Energy Company, 300 million yuan by Peng Sheng Yi Lian company, 162 million yuan by Ma Shengming, 50 million yuan by Jintian Lun company, 20 million yuan by Wu Meichun, 10 million yuan by Bank of China group company, 10 million yuan by industrial fund company, and 8 million yuan by Yin Xin asset company. In January 2017, Zhong Rong Shengda withdrew from the takeover of Shanda game equity and recovered funds far above the equity investment fund at that time. In June 12, 2017, Zhong Rong Shengda convened a meeting of partners. The fourth resolution of the conference stated that "5% of the principal paid capital of the partners should be retained in the partnership business for the subsequent cancellation of the liquidation. The remaining capital will be paid out to the partners by way of loans, and the partners will sign the loan agreement with the partnership." If there is a balance after the liquidation of the partnership enterprise is cancelled, it shall be allocated according to the proportion of the paid capital contribution of the partners to the total amount of the total paid capital of the partnership enterprise. The sixth article states: "Zhong Rong Shengda authorized Yinchuan Tong Lian capital investment and Operation Co., Ltd. to make the investment principal and investment in the form of loans in accordance with the decision of the partners' meeting.

The distribution of capital gains to partners is directly paid to the partners' accounts of the partners from the accounts receivable of the Shanda game equity transfer designated by the partnership. On the same day, Zhong Rong Shengda, according to the resolution of the partners, signed loan contracts with Peng Sheng Yi Lian, Ma Shengming, Jin Tian Lun, Wu Meichun, Yin Xin asset company, industrial fund company, Zhong Rong trust company and Bank of China New Energy Company respectively, and transferred 520370823.2 yuan to Peng Sheng Yi Lian company through loans from Yinchuan Tong Lian capital investment and Operation Co., Ltd., and transferred 240100195.63 yuan to Ma Shengming, transferred 84228470.54 yuan to the company, transferred 30753110.57 yuan to Wu Mei Chun, transferred 13476555.29 yuan to bank credit asset company, transferred 16845694.11 yuan to the industry fund company, and transferred 1870983293 yuan to China Trust Trust Company. Finally, the allocation of investment principal and investment proceeds to the limited partners in the form of loans has led to the loss of the ability to repay in the execution of disputes between the plaintiff and his partnership. In September 18, 2017, Peng Sheng Yi Lian, Ma Shengming, Jin Tian Lun, Wu Meichun, Yin Xin asset company, industrial fund company, China financial trust company and New Energy Company of China bank as limited partners of Zhong Rong Shengda signed the withdrawal agreement, and agreed to accept the liability of the withdrawal partners for the debts incurred before they withdraw from the partnership, and take the property taken from the limited partnership enterprises when they withdraw from the partnership. Lingwu City State owned company has become the limited partner of Zhong Cheng Shengda in the way of new enlisted person. He promised to subscribe 1 billion 990 million yuan of investment and assume joint liability for the debts of the partnership enterprise before joining the partnership. In summary, the plaintiff considers that the limited partners of Zhong Rong Shengda get their partnership contributions and withdraw from the partnership by way of loans, etc., and the limited partners shall be responsible for the debts of the partnership enterprises before they withdraw from the partnership, with the property they return from the partnership. According to the eighty-first law of the People's Republic of China partnership business, "after the withdrawal of limited partners,

For a limited partnership business liability arising from the reasons for its withdrawal, the liability for the property retrieved from the limited partnership enterprise when it is withdrawn from the partnership is limited. The defendant shall be jointly and severally liable for the debts of the limited partnership enterprise before the withdrawal of the partnership (September 18, 2017), and shall be added to the executor in accordance with the law. The Bank of China New Energy Company shall bear joint and several liability for the claims of the plaintiff within the scope of its subscribed capital contribution. 法院經(jīng)審理查明，原告黨增秀與被告中銀絨業(yè)集團(tuán)公司、中絨圣達(dá)合伙企業(yè)糾紛一案，寧夏回族自治區(qū)高級人民法院于2017年8月10日作出(2017)寧民初14號民事判決書，判決：一、寧夏中絨圣達(dá)股權(quán)投資合伙企業(yè)(有限合伙)于判決生效后30日內(nèi)向黨增秀返還投資保證金1億元，并承擔(dān)利息8,806,400元(按照中國人民銀行同期同類貸款基準(zhǔn)利率計算自2015年5月14日至2017年2月24日)，本息合計108,806,400元，并支付自2017年2月25日起至本判決確定的履行期限屆滿之日止的利息(利息按照中國人民銀行同期同類貸款基準(zhǔn)利率計付)；二、寧夏中銀絨業(yè)國際集團(tuán)有限公司對上述債務(wù)承擔(dān)連帶清償責(zé)任；三、寧夏中銀絨業(yè)國際集團(tuán)有限公司于判決生效后30日內(nèi)向黨增秀返還投資款利息4,528,000元，并承擔(dān)利息398,597元(按照中國人民銀行同期同類貸款基準(zhǔn)利率計算自2015年5月14日至2017年2月24日)，本息合 The amount is 4926597 yuan, and the interest payable from February 25, 2017 to the end of the time limit for performance determined by this judgment shall be paid in accordance with the benchmark interest rate of the same type of loan at the same time of the people's Bank of China. The cost of the case is 610465 yuan, and the cost of preservation is 5000 yuan, which is borne by Ningxia Bank of China International Group Co., Ltd. and Ningxia Zhong Rong Shengda equity investment partnership (limited partnership).

In the course of execution, due to the obligations established by the Bank of silver industry group and Zhong Rong San Da, who have not fulfilled the effective legal documents, the court inquired about the property that was not available for execution under the name of Zhong Rong da da. Party Zeng Xiu applied to the academy to add Lingwu state owned company, Bank of China New Energy Company, Ma Shengming, Peng Sheng Yi Lian company, Jin Tian Lun company, Wu Meichun, Yin Xin asset company, industrial development fund company, and China financial trust company as the executors of the case. In March 11, 2019, our hospital made (2019) the executive ruling of Ning 01 Jian Yi 20. It concluded that although the state owned capital company of Lingwu City signed the agreement on the transfer of partnership capital contribution, but did not get the right price, the authenticity of the agreement and whether the Lingnan city state owned company bear and how to bear the debts of the partnership enterprise before joining the partnership is confirmed by the legal procedure. The reason why party Zeng Xiu applied for the appended executor was inconsistent with the provisions of the fourteenth and second provisions of the Supreme People's Court on certain issues concerning the alteration and appending of the parties in civil execution, and ruled that the supplementary application of the party should be dismissed. It was also found that the enlisted person, Zhong Rong Sheng Da, was established in November 3, 2014, the nature of the enterprise is limited partnership, and the executive partner is the Bank of China group company. Its registered capital is 2 billion yuan RMB, and the limited partners and subscribed capital contributions are: 1 billion yuan in the financial trust company, 440 million yuan in the Bank of China New Energy Company, 300 million yuan in Peng Sheng Yi Lian company, 162 million yuan in Ma Shengming, 50 million yuan in Jin Tian Lun, 20 million yuan in Wu Mei Chun, 10 million yuan in the industrial development fund company, 8 million yuan in the Bank of Yin Xin asset company, and the general partner has subscribed for the 10 million yuan in the Bank of China cashmere group company. According to the Amendment Agreement of Zhong Rong Shengda partnership agreement: as of September 18, 2017, the contributions paid by China financial trust company, Peng Sheng Yi Lian company, Jin Tian Lun company, Wu Meichun, industrial development fund company, and silver letter asset company have been paid off; and the subscription period of the Bank of China group, New Energy Company and Ma Sheng Ming is

Before December 2019. In October 13, 2017, Zhong Rong Shengda partners changed to: China silver Cashmere Group Corporation and Lingwu City State capital company.

In June 12, 2017, Zhong Rong Shengda partner's meeting resolution: agreed that the partnership should allocate the investment net proceeds to the proportion of the total paid capital contribution of the partnership by the partners' partners, and the partnership enterprise will retain 5% of the principal paid capital of the partners in the partnership business for the subsequent cancellation of the liquidation, and the remaining capital shall be paid out to the partners by way of loans, and the partners and the partnership shall sign the loan agreement. If there is a balance after the liquidation of the partnership enterprise has been cancelled, it shall be allocated according to the proportion of the total paid capital of the partners to the total amount of the total paid capital of the partnership enterprise; the partnership shall be dissolved and authorized to carry out the relevant procedures for the liquidation and cancellation of the partnership enterprise; and the authorized Yinchuan Tong capital investment and Operation Co., Ltd. shall directly pay the partnership's investment allocation plan and the borrowed funds from the collection account of the Shanda game equity transfer fund designated by the partnership to the partners' accounts according to the decision of the partners' meeting. In June 12, 2017, Zhong Rong Sheng Da signed the loan contract with Peng Sheng Yi Lian, Ma Shengming, Jin Tien Lun, Wu Mei Chun, Yin Xin asset company, industrial fund company, and China financial trust company. The loan contract agreed that if Zhong Rong Shen Da liquidation showed that all partners retained the principal in the cancellation process, it was not enough to repay the foreign liabilities of the partnership enterprise. After Zhong Rong Sheng Da paid loans and investment proceeds to partners through Yinchuan Tong Lian capital investment and Operation Co., Ltd. Among them: Peng Sheng Yi United Company 505370823.2 yuan, China Trust Company 1870983293 yuan, silver trust asset company 13476555.29 yuan, Jin Tian Lun company 83978470.54 yuan, Wu Mei Chun 30653110.57 yuan, industrial fund company

16795694.11 yuan, 262039424.06 yuan on behalf of Ma Shengming to the Bank of China's Yinchuan city construction Klc Holdings Ltd creditors compensation loan. In September 18, 2017, China financial trust company, Bank of China New Energy Company, Peng Sheng Yi Lian company, Ma Shengming, Jin Tian Lun company, Wu Meichun, industrial development fund company, and silver letter asset company signed the partnership investment share transfer agreement with Lingwu City State capital company respectively. The eight limited partners, such as fusion trust company, agreed to transfer the investment share in Zhong Rong Shengda to 50 million yuan, 0 yuan, 15 million yuan, 8 million 100 thousand yuan, 2 million 500 thousand yuan, 1 million yuan, 500 thousand yuan and 400 thousand yuan to the state-owned capital company of Lingwu City. On the same day, the Bank of China Industry Group signed the withdrawal agreement with the eight limited partners and signed the "occupation agreement" with the Lingwu City State capital company. It agreed that the debts of the partnership enterprises that had occurred before the withdrawal of the partnership were agreed to take responsibility for the property that had been taken back from the limited partnership enterprises. The Lingwu City State owned company limited became a limited partner of Zhong Rong Shengda in the way of a new participant, and promised that its subscription amount of 1 billion 990 million yuan would be paid in place before December 31, 2019, and it was jointly and severally liable for the debts of the partnership enterprise before joining the partnership. In November 22, 2018, the state owned company of Lingwu, with the defendants, Zhong Rong Sheng Da, Zhong Yin Rong Ye group company, Bank of China New Energy Company, Peng Sheng Yi Lian company, Ma Shengming, Jin Tian Lun, Wu Meichun, industrial development fund company, and silver letter asset company, conceal the debt and took advantage of fraudulent means to make the Lingwu City State owned company run counter to the true meaning and the defendants signed the "partnership capital contribution transfer agreement" and "occupation agreement" respectively, and filed a lawsuit with the people's Court of Lingwu City, requesting to cancel the above agreement signed by the parties.

The agreement on partnership capital contribution transfer signed by Zhong Rong Shengda and China financial trust company, Bank of China New Energy Company, Ma Shengming and Wu Mei Chun was signed in September 18, 2017. It cancelled the agreement on entry into partnership signed by the state owned capital company and the Bank of China group in September 18, 2017. After the sentencing, the Bank of China industry group and Ma Sheng Ming refused to accept the appeal and the two case was under trial. Other cases have not yet been concluded in the first instance. The court considers that the case is a lawsuit for objection. The executor Zhong Rong San Da is a partnership. The second article and third paragraph of the People's Republic of China partnership law stipulates: "a limited partnership is composed of general partners and limited partners, and the general partners shall bear unlimited joint and several liability for the debts of the partnership enterprise. The limited partners shall be liable for the debts of the partnership enterprises on the basis of their capital contributions." In this case, the eight additional partners were withdrawn from the cashmere Shengda partnership in September 18, 2017: the Bank of China, New Energy Company, Ma Shengming, Peng Sheng Yi Lian, Jin Tian Lun, Wu Mei Chun, Yin Xin asset company, industrial fund company, and China financial trust company were the limited partners of the center. According to the fact finding, before the withdrawal of the company, Zhong Rong Shengda authorized Yinchuan Tong capital investment and Operation Co., Ltd. to pay 505370823.20 yuan to the Peng Sheng Yi joint company in the form of loan and distribution income, and to pay 1870983293 yuan for the transfer of the financial trust company, 13476555.29 yuan for the bank credit assets transfer company, 83978470.54 yuan for the transfer of gold and gold company, 30653110.57 yuan for the transfer of money in the United States and 83978470.54 yuan for the transfer of the industrial fund company, and 262039424.06 yuan for the compensation of the Yinchuan municipal construction Klc Holdings Ltd of the Bank of China Group Co., Ltd. According to the eighty-first provision of the partnership law, "after a limited partnership withdraws from a partnership, the limited partnership's debts arising from the reasons for its withdrawal will be withdrawn."

When the partners take responsibility for the property retrieved from the limited partnership enterprise, the plaintiff's credit to Zhong Rong Shen Da is formed during the partnership period of the above partners. When the partners withdraw from the partnership, they have not disposed of the debts of the former Zhong Rong Shengda partnership enterprise. Therefore, the defendant Peng Sheng Yi Lian, Ma Shengming, Jin Tian Lun, Wu Meichun, Yin Xin asset company, industrial fund company, and China financial trust company shall be responsible for the debts involved in the case. Whether the Bank of China New Energy Company should be appended to the executor to assume responsibility for the debt involved in the case, and according to the amendment of the Zhong Rong Shengda partnership agreement, as of September 18, 2017, all the limited partners withdrew from the bank, and the Bank of China New Energy Company paid no 440 million yuan in the amount of its investment in Zhong Rong Shengda. According to the fourteenth articles and second paragraphs of the Supreme People's Court on the issue of changing or supplementing the parties in civil execution, "the limited partnership enterprises as the executors shall not be able to pay the debts determined by the effective legal instruments, and the application executors shall apply for altering and appending the limited partners who have not paid their capital contributions in full and in time, and assume the responsibility within the scope of not paying the capital contribution in full. The people's court shall support them." the New Energy Company of the defendant, in accordance with the law, shall be liable for the debts involved in the scope of its contribution. The defendant New Energy Company claimed that its subscription time for Zhong Rong Sheng Da was December 2019, and it has not yet expired. The hospital believes that the setting time of the subscription time should be the defendant's identity as the Zhong Rong Shengda partner, who withdraws from the partnership before the time limit for contribution is paid. That is, the amount of capital contributions should be paid in full before withdrawal. The defendant can not hold the defense. The fact that the plaintiff in this case has made a claim to Zhong Rong Sheng Da is the investment margin and investment interest paid by the plaintiff to the middle velvet Shengda to obtain the property share of Zhong Rong Shengda. This fact has already taken effect.

The legal documents confirm that the defendants claim that the debt is not intermediate and the debt can not be established. In summary, in accordance with the provisions of the second articles and third articles and eighty-first articles of the People's Republic of China partnership law, the 313rd interpretation of the Supreme People's Court on the application of the "Civil Procedure Law of the people's Republic of China" and the provisions of the Supreme People's Court on fourteenth issues and thirty-fourth provisions relating to the alteration and appending of the parties to civil execution, the following judgments are as follows:

(1) additional defendants, Ningxia Peng Sheng Yi Lian Investment Co., Ltd., Ma Shengming, Yinchuan Jinlun Lun Cci Capital Ltd, Wu Meichun, Yinchuan silver trust asset management Co., Ltd., Yinchuan Industrial Development Fund Co., Ltd., Zhongrong International Trust Co is the Yinchuan intermediate people's Court (2017) ning being the 01 executor 479 case executor, the above defendants in the respective property acquired from Zhong Rong Shengda partnership business, to repay the debt of Zhong Rong Sheng Da to the plaintiff.

(two) add the defendant Ningxia Cashmere Group New Energy Limited company as the executor of Yinchuan intermediate people's Court (2017) rather than be the 01 executor 479, and pay off the debts of Zhong Rong Shengda to the plaintiff's party in the context of its insufficient contribution to the cashmere Santa Fe partnership.

(three) dismissed the plaintiffs from other litigation requests.

Three. Description of other related matters

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 11 times. The stock of cashmere group can not be in grade two before thaw.

The market is sold directly or is closed. 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. 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.

Four. Reference documents

The Ningxia Hui Autonomous Region Yinchuan intermediate people's court civil judgment (2019) ning 01 early Republic of China No. 756. Notice hereby.

Ningxia silver cashmere Limited by Share Ltd Manager

Two O 19 October 22nd