*ST Gaosheng (000971): Subsidiary Funds Frozen By Huaxian People'S Court Of Henan Province

Stock Code: 000971 securities short: *ST, Gao Sheng Announcement No.: 2019-118

Gaosheng Cmi Holdings Ltd's capital of wholly owned subsidiary was frozen by Huaxian people's Court of Henan Province

Announcement of proceedings

All members of the company and the board of Directors ensure that the contents of the announcement are true, accurate and complete, without false records, misleading statements or major omissions.

Special note:

The proceedings of the Gaosheng Cmi Holdings Ltd (hereinafter referred to as "the company") to disclose the funds of the wholly owned subsidiary disclosed by the Henan Provincial People's Court of Huaxian (hereinafter referred to as the "Huaxian court") were frozen and deducted. This resulted in an increase in the company's controlling shareholders, the actual controllers and their affiliates in the amount of RMB 9614000 yuan. The company will make every effort to urge the capital occupying party to raise funds as soon as possible to repay the funds that have been deducted, make up for the risks and losses of the company and Gaosheng technology, and actively advocate rights through legitimate channels. We invite investors to pay attention to investment risk.

The company's wholly-owned subsidiary, Jilin Gaosheng Technology Co., Ltd. (hereinafter referred to as "Gaosheng technology") was informed by the online banking enquiry recently that the Huaxian court had frozen and deducted the RMB 9614000 yuan of Gaosheng technology bank account. The relevant matters are hereby announced as follows:

I. The basic situation of the case

In September 29, 2018, March 27, 2019, April 4th, April 10th, April 24th and June 27th, the company published "progress notice on external guarantee and capital occupation" (Bulletin number: 2018-99), "notice on the letter of concern to Shenzhen securities exchange" (Bulletin number: 2019-26), and "about the progress of foreign guarantee and capital occupation".

Received the summons and related legal documents and proceedings announcement of the people's Court of Huaxian, Henan (Bulletin number: 2019-29), "bulletin on the freezing of the company's bank accounts and litigation progress" (Bulletin number: 2019-30), "notice on the implementation of the ruling and the proceedings of the people's court of Huaxian, Henan" (Bulletin number: 2019-33), and a notice on the freezing of bank accounts of wholly owned subsidiary companies (Bulletin number: 2019-62). Because the company's current chairman and current chairman used the seal illegally, in December 29, 2017, the real controller and the company signed the loan contract as the co borrower and the lender Zhou Shoubin, and borrowed RMB 10000 yuan to Zhou Shoubin. The interest rate of the loan was 3% monthly interest, and the loan period was limited to 6 months (from December 29, 2017 to June 29, 2018). The loan funds were remitted to the real control person's Beijing cultural Silicon Valley asset operation group Co., Ltd. The court of Huaxian issued a notice of execution to the company on the 28 day of March 2019, according to the civil mediation agreement No. 2018, Henan 0526 early Republic of China, and frozen the bank account of Gaosheng technology company's wholly owned subsidiary, freezing the limit of 9707400 yuan, and the freezing period was twelve months. Gaosheng science and technology filed an objection to the Huaxian court in June 2019, and filed a lawsuit against Zhou Shoubin in July 2019. The Huaxian court dismissed the objection and litigation claim of Gaosheng technology in July 2019 and September respectively.

Two. Progress of cases

In December 2, 2019, Gaosheng technology was informed by the way of Internet banking. The Huaxian court has implemented the freezing and deduction of RMB 9614000 yuan of Gaosheng technology bank account. According to the "executive ruling" issued by the Huaxian court, the company's wholly-owned subsidiary, Gaosheng technology, directly paid the applicant Zhou Shoubin 8000000 yuan in principal interest and 1546600 yuan in interest, the execution cost of the case was 67400 yuan, totaling 9614000 yuan, and the deduction was paid to the court case in Huaxian.

Three, the possible impact on the company and Countermeasures

1, in view of the Huaxian court's deduction of Gaosheng technology funds, the company and Gaosheng technology have the following objections:

(1) according to the provisions of the company law of the People's Republic of China, Gaosheng technology, a wholly owned subsidiary of the company, is an enterprise legal person with independent legal person qualifications, independent legal person property and legal person property rights. The legitimate rights and interests of Gaosheng science and technology shall be protected by law.

(2) the whole trend of loan funds in Zhou Shoubin case, the purpose and repayment of the loan have nothing to do with the company, and the company is completely unaware. At the same time, Zhou Shoubin also collects high interest as an individual loan. According to the fifty-second item published recently by the national court of civil and commercial trial work, it is emphasized that in the private lending, the funds of the lenders must be their own funds. Loaned borrowers borrow money from financial institutions and lend money to borrowers in a high profit way, which not only increases the cost of financing but also disrupts the credit order. This kind of private lending behavior should be considered invalid. The fifty-third also emphasizes that private lending activities undertaken by private legal persons or natural persons who are not eligible for loans in accordance with the law shall be invalid according to law.

Accordingly, the company will actively take legal measures to safeguard the rights and interests of the company and its subsidiaries.

2, the lifting of the holding bank account capital has been linked to the company's capital occupation. Up to now, the total number of controlling shareholders, actual controllers and related party funds occupied by the company has totaled 49614000 yuan, accounting for 2.57% of the company's latest audited net assets.

In addition to the 9614000 yuan deducted from the announcement of this week's announcement, the company used the company's seal as the sole chairman of the debtor and signed the loan and guarantee agreement with the creditor Dong Yunwei and Yan Yu in July 18, 2018. The loan amount was 40 million yuan and the loan limit was 3 months. The above-mentioned loan funds were remitted to the designated bank account of the Beijing cultural Silicon Valley. The company's actual controller and its related parties provide unlimited joint liability for the above loans. The company's actual controllers and their associated parties provide unlimited joint and several liability guarantee for the above loans. The above-mentioned loan and guarantee agreement has not been approved by the company prior to approval, and the company has not known the loan item beforehand, and the company is actively responding to the lawsuit. As of now, the above matters have not caused any actual loss to the company.

3, the company will urge the actual controller Wei Zhenyu and his associated companies to raise funds as soon as possible.

The funds that are still deducted make up for the risks and losses of the company and Gaosheng technology.

4, the company will actively advocate the right through legitimate channels, to solve the above violation of the seal cause the company's capital occupation. The impact of the above items on the profit or post period profits of the company is uncertain. The company will continue to follow up the progress of related matters and fulfill the obligation of information disclosure in a timely manner.

China Securities Daily, Shanghai Securities Daily, securities times, securities daily and www.cninfo.com.cn provide designated information disclosure for the company. All information is based on the announcement made by the company in the above designated media. We invite investors to pay attention to company announcements and pay attention to investment risks.

Notice hereby

Gaosheng Cmi Holdings Ltd board of directors

Two O 19 December 4th