Warning letter received by Xu Xizhong, the actual controller of Three Gorges New Material Co., Ltd. whose buyback is less than 10% of the planned lower limit

According to the administrative supervision measures ([2020] No. 38) published on the website of Hubei regulatory bureau of China Securities Regulatory Commission on October 13, it is found that Three Gorges new building materials Co., Ltd. (hereinafter referred to as “Three Gorges new materials”, 600293. SH) has the following violation facts: < / P > < p > on February 12, 2018, the company disclosed the plan for repurchase and cancellation of shares of the company and planned to own its own shares Within 12 months from the date when the stock repurchase plan is deliberated and approved by the general assembly of the people’s Republic of China, the company’s shares shall be repurchased with self raised funds, with the repurchase amount not less than 100 million yuan and not more than 150 million yuan, and the share repurchase price shall not be higher than 12 yuan per share. On March 5, 2018, the shareholders’ meeting of the company deliberated and approved the above repurchase plan. On March 2, 2019, the company announced that it would extend the repurchase period by 12 months to March 3, 2020. At the same time, the company’s announcement showed that 1.987 million shares of the company’s shares had been repurchased, accounting for 0.17% of the company’s total share capital, and the total amount of repurchase was RMB 9993600. < / P > < p > on March 4, 2020, the share repurchase period will expire. The board of directors of the company shall, at the expiration of the repurchase period for three months, promptly announce the reasons for the failure to implement the repurchase. Until February 29, 2020, the company disclosed the “proposal on termination of share repurchase” deliberated and passed at the 16th meeting of the 9th board of directors, as well as the reasons for the failure to complete the repurchase and terminate the repurchase of shares. < p > < p > the company disclosed the announcement on the implementation results of share repurchase and share changes, which shows that the company has repurchased 1.987 million shares, accounting for 0.17% of the total share capital of the company, and the total amount of repurchase is RMB 9993600. The actual repurchase amount of the company only accounts for 9.99% of the lower limit of the repurchase plan, and the original repurchase plan is not completed. However, it was not until June 22, 2020 that the general meeting of shareholders of the company deliberated and passed the proposal on terminating the repurchase of shares of the company. According to the judgment of Hubei securities regulatory bureau, the company’s actual implementation of buyback is quite different from the original disclosure plan. It fails to timely perform the corresponding decision-making procedures to change or exempt it, and fails to timely announce the reasons for the failure to implement the repurchase, and the company’s directors fail to perform their duties faithfully and diligently to ensure the authenticity, accuracy, integrity, timeliness and fairness of the disclosed information. < / P > < p > the above behaviors violate Article 3 of the administrative measures for information disclosure of listed companies, Article 3, paragraph 3, and Article 5, paragraph 2, of the regulatory guidelines for listed companies No. 4 – commitment and performance of actual controllers, shareholders, related parties, purchasers and listed companies (CSRC announcement [2013] No. 55), and administrative measures for repurchase of public shares by listed companies (Trial) (zjf [2005] No. 51) Article 25. < p > < p > in accordance with the provisions of Article 59 of the administrative measures for information disclosure of listed companies and Article 6 (1) of the regulatory guidelines for listed companies No. 4 – commitment and performance of actual controllers, shareholders, related parties, purchasers and listed companies of listed companies, Hubei Securities Regulatory Bureau (Hubei securities regulatory bureau) has made a series of recommendations to the company and members of the board of directors, including Xu Xizhong, Liu Zhengbin, Liu Yimin, Yang Xiaobing, Zhang Xin and Xu Zewei, Chen Zetong, Wang Hui and Li Yanhong took administrative supervision measures by issuing warning letters, and recorded the above violations in the integrity file. At the same time, the company was required to learn lessons seriously, strengthen the study of securities laws and regulations, and prevent the recurrence of such acts. < p > < p > according to the inquiry of China economic network, Three Gorges new materials was established on March 26, 1993 with a registered capital of 1.160 billion yuan. It was listed on the Shanghai Stock Exchange on September 19, 2000. Xu Xizhong was the legal representative, major shareholder, actual controller and chairman of the board. As of June 30, 2020, Xu Xizhong held 207 million shares, accounting for 17.88%. < p > < p > Xu Xizhong has been the chairman of the board of directors of Three Gorges new materials since May 12, 2014 until June 21, 2023; Liu Zhengbin has been the deputy general manager since May 15, 2019; Liu Yimin has been the chief financial officer since May 12, 2014; and Yang Xiaobing has been the Secretary of the board of directors since April 21, 2015. < / P > < p > according to the “plan on repurchase and cancellation of the company’s shares” issued by Sanxia new materials on February 12, 2018, the company’s share repurchase price is no more than RMB 12 yuan / share, the total amount of capital to be repurchased is 100 million yuan to 150 million yuan, and the maximum number of shares to be repurchased is expected to be 12.5 million shares, accounting for 1.08% of the company’s current total share capital. < p > < p > according to the announcement on the extension of the implementation period of repurchase shares issued by Three Gorges new materials on March 2, 2019, the company has repurchased 1987000 shares of the company, accounting for 0.17% of the total share capital of the company, the highest transaction price is 5.08 yuan / share, the lowest transaction price is 4.92 yuan / share, and the total amount of repurchase transaction is 9993600 yuan. The reason for the delay is due to the domestic and foreign experience Significant changes have taken place in the economic environment and the securities market, as well as major adjustments in the relevant laws, regulations and regulatory documents of the state and the competent authorities on the repurchase of shares by listed companies. The company plans to extend the implementation period of share repurchase from March 4, 2019, taking into account the changes in the economic environment, the changes in the securities market, the company’s capital situation, debt fulfillment ability and sustainable operation ability From March 3, 2020. According to the announcement on termination of share repurchase issued by Sanxia new materials on February 29, the main reason for the company’s failure to complete the repurchase and terminate the repurchase was the company’s shortage of funds. < / P > < p > the announcement on the implementation results and share changes of share repurchase issued by the company on March 4 showed that the repurchase amount did not meet the requirements of the repurchase plan, mainly because after the company passed the resolution of share repurchase, due to the superimposed influence of domestic and foreign macroeconomic situation, the company, as a flat glass manufacturing enterprise and private enterprise, continued to face universal financing difficulties In particular, the company’s subsidiary, Shenzhen Hengbo commercial chain Co., Ltd., broke out a series of “China Post” lawsuits, and the bank continued to collect loans, which led to the company’s capital tension. Article 3 of the administrative measures for information disclosure of listed companies stipulates that the issuers, directors, supervisors and senior managers of listed companies shall faithfully and diligently perform their duties to ensure the authenticity, accuracy, completeness, timeliness and fairness of the disclosed information. < p > < p > < p > Article 3 of the regulatory guidelines for listed companies No. 4 – commitments and performance of actual controllers, shareholders, related parties, purchasers and listed companies of listed companies (CSRC announcement [2013] No. 55) stipulates that if the commitments made by relevant parties that have not yet been fulfilled do not conform to the provisions of articles 1 and 2 of the guidelines, they shall be renewed within 6 months from the date of promulgation of these guidelines Standardize the commitment items and disclose them. < / P > < p > if the relevant commitments can not be fulfilled or the performance of the commitments will be detrimental to the protection of the rights and interests of the listed company, and the commitment related parties are unable to standardize the existing commitments in accordance with the above provisions, the change of commitment or exemption from performance of commitments can be submitted to the general meeting of shareholders for deliberation. The listed company shall provide online voting to shareholders, and the commitment related parties and related parties shall avoid voting. < p > < p > < p > Article 5 of the regulatory guidelines for listed companies No. 4 – commitment and performance of actual controllers, shareholders, related parties, purchasers and listed companies of listed companies (CSRC announcement [2013] No. 55) stipulates that if the commitment cannot be fulfilled or cannot be fulfilled on schedule due to objective reasons beyond its control such as relevant laws and regulations, policy changes, natural disasters, etc., the commitment is relevant Party A shall disclose relevant information in a timely manner. < / P > < p > except for the objective reasons beyond their control such as relevant laws and regulations, policy changes, natural disasters, etc., if the commitment has been unable to fulfill or is not conducive to safeguarding the rights and interests of the listed company, the commitment related parties shall fully disclose the reasons and propose to the listed company or other investors to replace the original commitment with a new commitment or propose to exempt the performance of the commitment obligation. The above-mentioned change plan shall be submitted to the general meeting of shareholders for deliberation. The listed company shall provide shareholders with online voting mode and promise that relevant parties and related parties shall avoid voting. The independent directors and the board of supervisors shall express their opinions on whether the change scheme proposed by the parties concerned is legal and compliant, and whether it is conducive to protecting the interests of the listed company or other investors. If the change plan has not been deliberated and approved by the general meeting of shareholders and the commitment has expired, it shall be deemed that the commitment has not been fulfilled within the time limit. < p > < p > < p > Article 25 of the administrative measures for repurchase of public shares by listed companies (for Trial Implementation) (zjf [2005] No. 51) stipulates that listed companies shall implement the repurchase plan within the effective period of repurchase. < p > < p > < p > Article 59 of the measures for the administration of information disclosure of listed companies stipulates that if the information disclosure obligors and their directors, supervisors and senior managers, shareholders, actual controllers, purchasers and their directors, supervisors and senior managers of listed companies violate these measures, the CSRC may take the following regulatory measures: < / P > < p > regulatory guidelines for listed companies Article 6 of No.4 – commitment and performance of actual controllers, shareholders, related parties, purchasers and listed companies of listed companies stipulates that in addition to the objective reasons beyond the control of the parties concerned, such as relevant laws and regulations, policy changes, natural disasters and other objective reasons beyond the control of the relevant parties, we will, in accordance with the Interim Measures for the supervision and administration of securities and Futures Markets Relevant information shall be recorded in the integrity file, and regulatory measures such as regulatory conversation, order to make public statement, order to correct, issue warning letter, and identify major decision makers of commitment related parties as inappropriate candidates for directors, supervisors and senior executives of listed companies. < / P > < p > before the commitment is fulfilled or the alternative plan is approved by the general meeting of shareholders, we will be prudent in the application for administrative license submitted by the commitment related parties and their administrative license applications as trading counterparties of listed companies (for example, listed companies purchase assets and raise funds from them) in accordance with the Interim Measures for integrity supervision and administration of securities and futures market and relevant laws and regulations Review or decide not to grant permission. Three Gorges new building materials Co., Ltd., Xu Xizhong, Liu Zhengbin, Liu Yimin, Yang Xiaoping, Zhang Xin, Xu zewei, Chen Zetong, Wang Hui, Li Yanhong: < / P > < p > on February 12, 2018, the company disclosed the plan for repurchase and cancellation of shares of the company, and planned to buy back the company’s shares with self raised funds within 12 months from the date when the share repurchase scheme was approved by the general meeting of shareholders, The repurchase amount shall not be less than 100 million yuan and not more than 150 million yuan, and the repurchase price shall not be higher than 12 yuan per share. On March 5, 2018, the shareholders’ meeting of the company deliberated and approved the above repurchase plan. On March 2, 2019, the company announced that it would extend the repurchase period by 12 months to March 3, 2020. At the same time, the company’s announcement showed that 1.987 million shares of the company’s shares had been repurchased, accounting for 0.17% of the company’s total share capital, and the total amount of repurchase was RMB 9993600. < / P > < p > on March 4, 2020, the share repurchase period will expire. The board of directors of the company shall, at the expiration of the repurchase period for three months, promptly announce the reasons for the failure to implement the repurchase. Until February 29, 2020, the company disclosed the “proposal on termination of share repurchase” deliberated and passed at the 16th meeting of the 9th board of directors, as well as the reasons for the failure to complete the repurchase and terminate the repurchase of shares. < p > < p > the company disclosed the announcement on the implementation results of share repurchase and share changes, which shows that the company has repurchased 1.987 million shares, accounting for 0.17% of the total share capital of the company, and the total amount of repurchase is RMB 9993600. The actual repurchase amount of the company only accounts for 9.99% of the lower limit of the repurchase plan, and the original repurchase plan is not completed. However, it was not until June 22, 2020 that the general meeting of shareholders of the company deliberated and passed the “on termination of repurchase of shares of the company”