Measures for the Administration of Securities Offerings by Listed Companies

Article 2: These Measures shall govern applications by listed companies to offer securities in China.

For the purposes of these Measures, the term 'securities' means the following types of securities:

(1) shares;

(2) convertible bonds; and

(3) other types approved by the China Securities Regulatory Commission (the CSRC).

Article 3: When offering securities, a listed company may publicly offer them to the public in general or offer them to particular persons in a non-public manner.

Article 4: When a listed company is to offer securities, it must truthfully, accurately, completely, timely and equitably disclose or provide information that is free of false or misleading statements or material omissions.

Article 5: The approval of the securities offering of a listed company by the CSRC does not mean that it makes a substantive judgement or warranty as to the investment value or the returns to investors of such securities. Investors who subscribe to such securities shall themselves bear the investment risks arising from changes in the listed company's operations or earnings.

PART TWO: CONDITIONS FOR THE PUBLIC OFFERING OF SECURITIES

Section One: General Stipulations

Article 6: The organizational structure of the listed company shall be sound, its operations good and both compliant with the following provisions:

(1) the company's articles of association are lawful and valid, its shareholders' general meeting, board of directors, supervisory board and independent director systems are sound and such organizations are capable of efficiently performing their duties and responsibilities in accordance with the law;

(2) the company's internal control systems are sound, and capable of ensuring the efficiency and compliance of the company's operations and the reliability of the company's financial reports; and there are no material defects in the completeness, reasonableness and effectiveness of the company's internal control systems;

(3) the company's incumbent directors, supervisors and senior management personnel have the qualifications to serve in their positions, are capable of faithfully and diligently performing their duties, have not committed any violations of Article 148 or 149 of the Company Law and have not been subjected to administrative penalties by the CSRC in the most recent 36 months or been publicly censured by the stock exchange in the most recent 12 months;

(4) the personnel, assets and financial affairs of the listed company are separate from those of its controlling shareholder or de facto controller, its organizations and business are independent therefrom and it can carry on its business and management at its own discretion; and

(5) in the most recent 12 months it has not provided security for a third party in violation of regulations.

Article 7: The company's profitability shall be sustainable and comply with the following provisions:

(1) it has been profitable for the most recent three financial years in succession; calculated on the basis of the lower of its net profit after the deduction of non-recurring gains and losses and net profit before deduction;

(2) its sources of business and profitability are relatively stable, and it is not severely reliant on its controlling shareholder or de facto controller;

(3) its existing core business or investment orientation can develop sustainably, its business model and investment plan are sound, the market prospects for its main products or services are good and there are no existing or foreseeable material adverse changes in the business environment of its industry or to market demand;

(4) its senior management personnel and core technical personnel are stable and no material adverse change has occurred in the most recent 12 months;

(5) the company's major assets, core technologies and other major interests were lawfully obtained, may continue to be used and there are no existing or foreseeable material adverse changes thereto;

(6) there are no existing security obligations, lawsuits, arbitration proceedings or other major event that could seriously affect the company's continued operations; and

(7) if it has made a public offering of securities during the most recent 24 months, its operating profit during the year of the offering was not 50% or more lower than that of the preceding year.

Article 8: The listed company's financial position shall be good and comply with the following provisions:

(1) its basic accounting work is legally compliant and strictly complies with the uniform accounting rules and regulations of the state;

(2) a certified public accountant has not issued an audit report expressing a qualified opinion, adverse opinion or disclaimer of opinion on its financial statements for the most recent three years or the last period; if the certified public accountant has issued an audit report expressing an unqualified opinion with an emphasis of matter, the matter involved does not have a material adverse effect on the issuer or such effect is eliminated before the offering;

(3) the quality of its assets is good; and its non-performing assets are insufficient to have a material adverse effect on its financial position;

(4) its business results are genuine and its cash flow normal; the recognition of operating revenues, costs and expenses strictly complies with relevant state enterprise accounting standards, during the most recent three years provisions for the impairment of assets have been fully and reasonably made and there has been no manipulation of the business performance; and

(5) during the most recent three years its aggregate distributed profits in cash and shares have not been less than 20% of the annual average distributable profits realized during the most recent three years.

Article 9: During the most recent 36 months, the listed company's financial accounting documents shall not have contained any false statements and none of the following major violations of the law shall have been committed:

(1) a violation of securities laws, administrative regulations, or rules resulting in the imposition of administrative penalties by the CSRC or criminal punishment;

(2) a violation of industry and commerce, tax, land, environmental protection or customs laws, administrative regulations, or rules resulting in the imposition of administrative penalties, where the circumstances were serious, or criminal punishment; or

(3) a violation of other state laws or administrative regulations where the circumstances were serious.

Article 10: The amount and use of the listed company's offering proceeds shall comply with the following provisions:

(1) the amount of the proceeds shall not exceed the amount required for the project;

(2) the purpose of the proceeds shall comply with state industrial policy and relevant laws and administrative regulations on environmental protection, land administration, etc.;

(3) except in the case of financial enterprises, the project to which the proceeds are to be applied may not be a financial type investment whose purpose is to hold tradable financial assets or saleable financial assets, to lend to another, to entrust financial management, etc. and such proceeds may not be used to directly or indirectly invest in a company whose core business is the buying and selling of negotiable securities;

(4) the implementation of the investment project will not give rise to competition with the controlling shareholder or de facto controller in the same industry or affect the independence of the company's production and operations; and

(5) a dedicated deposit system for the offering proceeds shall be established and such proceeds must be deposited into the dedicated account decided on by the board of directors of the company.

Article 11: A listed company may not make a public offering of securities if:

(1) the application documents for the offering contain false or misleading statements or material omissions;

(2) it changed the purpose of the proceeds from the preceding public offering of securities without authorization and failed to rectify the matter;

(3) it has been publicly censured by a stock exchange in the most recent 12 months;

(4) it and its controlling shareholder or de facto controller have failed to perform a public undertaking to investors in the most recent 12 months;

(5) it or an incumbent director or member of its senior management personnel has had a case opened for investigation against it/him/her by the judicial authorities for a suspected criminal offence or by the CSRC for a suspected violation of laws or regulations; or

(6) it has committed another act that seriously harmed the lawful rights and interests of investors or the public interest.

Section Two: Offering of Shares

Article 12: When a rights offering is to be made to existing shareholders (Rights Offering), in addition to complying with Section One of this Part, the following provisions shall also be complied with:

(1) the quantity of shares to be offered under the proposed Rights Offering may not exceed 30% of the total share capital before the offering;

(2) the controlling shareholder shall announce prior to the shareholders' general meeting the quantity of shares it has undertaken to subscribe for under the Rights Offering; and

(3) the best efforts underwriting method as specified in securities laws shall be used for the offering.

If the controlling shareholder fails to perform its subscription undertaking or if, after the expiration of the underwriting period, the quantity of shares subscribed for by the existing shareholders fails to reach 70% of the intended offering quantity, the issuer shall issue refunds to the subscribing shareholders at the offering price plus interest calculated at the rate for bank deposits of the same period.

Article 13: When offering shares to the public in general (Subsequent Offering), in addition to complying with Section One of this Part, the following provisions shall also be complied with:

(1) the weighted average rates of return on net assets during the most recent three financial years shall not be less than 6% on average; the lower of net profit after the deduction of non-recurring gains and losses and net profit before deduction shall serve as the basis for calculating the weighted average rate of return on net assets;

(2) except in the case of a financial enterprise, as at the end of the most recent period, the company does not hold financial type investments consisting of tradable financial assets or saleable financial assets, amounts lent to another, entrusted financial management, etc. of relatively large value; and

(3) the offering price may not be lower than the average price of the company's shares during the 20 trading days prior to the publication of the prospectus or the average price during the preceding trading day.

Section Three: Offering of Convertible Bonds

Article 14: A company that intends to offer convertible bonds to the public shall, in addition to complying with Section One of this Part, comply with the following provisions:

(1) the weighted average rates of return on net assets during the most recent three financial years shall not be less than 6% on average; the lower of net profit after the deduction of non-recurring gains and losses and net profit before deduction shall serve as the basis for calculating the weighted average rate of return on net assets;

(2) the aggregate balance of the company's outstanding bonds after the offering may not exceed 40% of its net assets as at the end of the preceding period; and

(3) its average annual distributable profits realized in the most recent three financial years may not be less than the coupon on the company's bonds for one year.

For the purposes of the preceding paragraph, the term 'convertible bonds' means corporate bonds that the issuing company issues in accordance with the law and that may, within a certain period of time, be converted into shares on the prescribed terms.

Article 15: The minimum term for convertible bonds shall be one year and the maximum six years.

Article 16: The face value of each convertible bond shall be Rmb100.

The coupon rate on convertible bonds shall be determined through consultations between the issuing company and the lead underwriter, but must comply with relevant state provisions.

Article 17: When publicly offering convertible bonds, a qualified credit rating agency shall be engaged to rate the bonds and provide follow up ratings.

The credit rating agency shall issue follow up rating reports at least once a year.

Article 18: The listed company shall complete repayment of the principal and payment of the coupon on its remaining convertible bonds within five working days of the expiration of their term.

Article 19: When publicly offering convertible bonds, measures shall be formulated to protect the rights of the bondholders and specify the rights and procedures of the bondholders' meeting and the conditions for the entry into effect of the resolutions thereof.

A bondholders' meeting shall be convened if:

(1) the provisions of the prospectus are to be amended;

(2) the issuer fails to pay the principal and/or coupon on time;

(3) the issuer reduces its capital, is merged, divided or dissolved, or files for bankruptcy;

(4) a major change in the guarantor or the security provided occurs; or

(5) another event that affects the major rights and interests of the bondholders occurs.

Article 20: When publicly offering convertible bonds, security shall be provided, except in the case of companies with audited net assets of not less than Rmb1.5 billion as at the end of the most recent period.

When security is provided, it shall be provided for the entire amount. The scope of such security shall include the principal and coupon of the bonds, liquidated damages, damages and the expenses for realizing the claims.

If security is to be provided in the form of a guarantee, it shall be a joint and several security and the audited net assets of the guarantor during the most recent period shall not be less than the aggregate amount of security it is providing for third parties. Securities companies and listed companies may not serve as guarantors for offers of convertible bonds, with the exception of listed commercial banks.

If a mortgage or pledge is created, the appraised value of the mortgaged or pledged property shall not be less than the secured amount. The value shall be appraised by a qualified asset appraisal institution.

Article 21: Convertible bonds may only be converted into shares of the company six months after the date of conclusion of the offering. The conversion period shall be determined by the company based on the life of the bonds and the company's financial position.

The bondholders shall have the option of whether or not to convert the bonds into shares. A bondholder shall become a shareholder of the issuing company on the day following conversion.

Article 22: The conversion price shall not be lower than the average trading price of the company's shares during the 20 trading days prior to the date of publication of the prospectus and the average price during the preceding trading day.

For the purposes of the preceding paragraph, the term 'conversion price' means the price paid to convert the convertible bonds into each share as specified in advance in the prospectus.

Article 23: The prospectus may specify redemption terms that stipulate that the listed company can redeem unconverted convertible bonds on the predetermined terms and at the predetermined price.

Article 24: The prospectus may specify sell back terms that stipulate that the bondholders can sell the bonds that they hold back to the company on the predetermined terms and at the predetermined price.

The prospectus shall specify that if the listed company changes the announced purpose of the proceeds, the bondholders are granted the right to sell back the bonds on one occasion.

Article 25: The prospectus shall specify the principles and method of revising the conversion price. If, after the issuance of the convertible bonds, there is a change in the listed company's shares due to a Rights Offering, Subsequent Offering, distribution of bonus shares, distribution of dividends, division or other reason, the conversion price shall be revised simultaneously.

Article 26: If the prospectus contains provisions on the downward amendment of the conversion price, it shall additionally address the following:

(1) the conversion price amendment proposal must be put to a vote of the shareholders' general meeting and obtain the consent of two-thirds or more of the voting rights held by the shareholders present at the meeting; when the shareholders' general meeting conducts the vote, those shareholders holding convertible bonds of the company shall disqualify themselves; and

(2) the amended conversion price shall not be lower than the average trading price of the company's shares for the 20 trading days prior to the shareholders' general meeting prescribed in the preceding paragraph and the average price during the preceding trading day.

Article 27: A listed company may publicly offer convertible bonds where the warrants and the bonds are separately tradable (Separately Tradable Convertible Bonds).

When offering Separately Tradable Convertible Bonds, in addition to complying with Section One of this Part, the following provisions shall also be complied with:

(1) the company's unaudited net assets as at the end of the most recent period were not less than Rmb1.5 billion;

(2) the average annual distributable profits realized during the most recent three financial years are not less than the coupon for one year on the company's bonds;

(3) the net cash flow generated by business activities during the most recent three financial years on average is not less than the coupon for one year on the company's bonds, with the exception of companies that satisfy the provision of Item (1) of Article 14 hereof; and

(4) the aggregate balance of the company's outstanding bonds after the offering may not exceed 40% of the company's net assets as at the end of the preceding period and the anticipated total proceeds after the exercise of all of the attached warrants may not exceed the proceeds from the corporate bonds to be offered.

Article 28: An application to list Separately Tradable Convertible Bonds for trading shall be made to the stock exchange where the listed company's shares are listed.

If both the corporate bonds and warrants that make up the Separately Tradable Convertible Bonds satisfy the listing conditions of the stock exchange, they shall be listed and traded separately.

Article 29: The minimum term of Separately Tradable Convertible Bonds shall be one year.

Articles 16 to 19 hereof shall apply to the face value, coupon rate and credit rating of the bonds, repayment of the principal, payment of the coupon and claims protection.

Article 30: If the issuer provides security for an offering of Separately Tradable Convertible Bonds, the provisions of the second to fourth paragraphs of Article 20 hereof shall apply.

Article 31: If the warrants are listed for trading, the elements specified for the warrants shall include the exercise price, their life, the exercise period or dates and the exercise percentage.

Article 32: The warrant exercise price shall not be lower than the average price of the company's shares during the 20 trading days prior to the date of publication of the prospectus or the average price during the preceding trading day.

Article 33: The life of the warrants shall not exceed the term of the corporate bonds and shall not be less than six months from the date of conclusion of the offering.

The life of the warrants as specified in the prospectus may not be revised.

Article 34: The warrants may only be exercised at least six months after conclusion of the offering, and the exercise period shall be a period of time prior to the expiration of the life of the warrants or specific trading days during their life.

Article 35: The prospectus for Separately Tradable Convertible Bonds shall specify that if the listed company changes the announced purpose of the proceeds, the bondholders are granted the right to sell back the bonds on one occasion.

PART THREE: CONDITIONS FOR THE NON-PUBLIC OFFERING OF SHARES

Article 36: For the purposes of these Measures, the term "non-public offering of shares" means the act whereby a listed company offers shares to particular persons in a non-public manner.

Article 37: The particular persons who are the target of a non-public offering of shares shall comply with the following provisions:

(1) complying with the conditions specified in the resolution of the shareholders' general meeting; and

(2) not exceeding 10 persons.

If the targets of an offering are overseas strategic investors, the prior approval of the relevant departments of the State Council shall be required.

Article 38: A listed company that wishes to make a non-public offering of shares shall comply with the following provisions:

(1) the offering price shall not be less than 90% of the average price of the company's shares during the 20 trading days prior to the pricing reference date;

(2) the shares offered may not be transferred for a period of 12 months from the date of conclusion of the offering; the shares subscribed for by the controlling shareholder or de facto controller and the enterprises controlled by it may not be transferred for a period of 36 months;

(3) the use of the proceeds shall comply with Article 10 hereof; and

(4) if the offering is to result in a change in the control of the company, other provisions of the CSRC shall additionally be complied with.

Article 39: A listed company may not make a non-public offering of shares if:

(1) the application documents for the offering contain false or misleading statements or material omissions;

(2) the company's rights and interests were seriously harmed by its controlling shareholder or de facto controller and the same has not been eliminated;

(3) the company or a subsidiary has provided security for a third party in violation of provisions and the same has not been terminated;

(4) an incumbent director or member of its senior management personnel has been subjected to administrative penalties by the CSRC in the most recent 36 months or has been publicly censured by a stock exchange in the most recent 12 months;

(5) the company or an incumbent director or member of its senior management personnel has had a case opened for investigation against it/him/her by the judicial authorities for a suspected criminal offence or by the CSRC for a suspected violation of laws or regulations;

(6) a certified public accountant has issued an audit report expressing a qualified opinion, adverse opinion or disclaimer of opinion on its financial statements for the most recent year and period; unless the material effect of the events mentioned in the qualified opinion, adverse opinion or disclaimer of opinion has been eliminated or the offering involves a major reorganization; or

(7) it has committed another act that seriously harms the lawful rights and interests of investors or the public interest.

PART FOUR: OFFERING PROCEDURE

Article 40: When a listed company is to apply to offer securities, its board of directors shall pass resolutions in accordance with the law on the matters set forth below and submit the same to the shareholders' general meeting for approval:

(1) the securities offering plan;

(2) a feasibility study report on the use of the proceeds from the offering;

(3) a report on the use of the proceeds from the previous offering; and

(4) other matters that need to be specified.

Article 41: The decisions made by the shareholders' general meeting on a share offering shall, at minimum, cover the following matters:

(1) the class and quantity of securities to be offered;

(2) the offering method, the targets of the offering and the arrangement for the Rights Offering to the existing shareholders;

(3) the price determination method or price range;

(4) the purpose of the proceeds;

(5) the term of validity of the resolutions;

(6) the authorization of the board of directors to handle specific matters relating to the offering; and

(7) other matters that need to be specified.

Article 42: The decisions made by the shareholders' general meeting on an offering of convertible bonds shall, at minimum, cover the following matters:

(1) the matters specified in Article 41 hereof;

(2) the coupon rate;

(3) the term of the bonds;

(4) security related matters;

(5) sell back terms;

(6) the period for, and method of, repayment of the principal and payment of the coupon;

(7) the conversion period; and

(8) the determination and amendment of the conversion price.

Article 43: The decisions made by the shareholders' general meeting on an offering of Separately Tradable Convertible Bonds shall, at minimum, cover the following matters:

(1) the matters specified in Article 41 and Items (2) to (6) of Article 42;

(2) the warrant exercise price;

(3) the life of the warrants; and

(4) the period or the days for exercising the warrants.

Article 44: The resolutions of the shareholders' general meeting on matters relating to a securities offering shall require two-thirds or more of the voting rights of the shareholders present at the meeting for adoption. If securities are to be offered to particular shareholders of the company and their affiliates, the affiliated shareholders shall disqualify themselves when the shareholders' general meeting votes on the offering plan.

When a listed company convenes a shareholders' general meeting on matters relating to a securities offering, it shall provide a network or other means to facilitate participation in the meeting by shareholders.

Article 45: When a listed company applies to make a public offering of securities or a non-public offering of new shares, it shall have a sponsor, which it shall report to the CSRC.

The sponsor shall prepare and submit the offering application documents in accordance with relevant provisions of the CSRC.

Article 46: The CSRC shall examine an application for a securities offering in accordance with the following procedure:

(1) deciding on whether or not to accept the application within five working days of receipt of the application documents;

(2) conducting a preliminary examination of the application documents after the acceptance thereof;

(3) having the public offering review committee review the application documents; and

(4) rendering of the decision on whether or not to grant approval.

Article 47: The listed company shall offer the securities within six months of the date on which the CSRC approved the offering. If the listed company fails to make the offering within such time, the approval document shall become null and void and the company may only make the offering after approval anew by the CSRC.

Article 48: If a major event occurs before a securities offering, the listed company shall postpone the offering and report the same to the CSRC in a timely manner. If such event materially affects the conditions of the offering, the securities offering application shall require approval anew from the CSRC.

Article 49: Securities offerings by listed companies shall be underwritten by securities companies. If a non-public offering of shares is to be made to the existing top 10 shareholders, the listed company may sell such shares itself.

Article 50: If the securities offering application of a listed company is not approved, the company may submit another securities offering application six months from the date of the decision by the CSRC to withhold its approval.

PART FIVE: INFORMATION DISCLOSURE

Article 51: When a listed company is to offer securities, it shall prepare the prospectus or other information disclosure documents in accordance with the procedure, with the contents and in the format prescribed by the CSRC and perform its information disclosure obligations in accordance with the law.

Article 52: A listed company shall ensure that investors timely, fully and equitably obtain information that is required to be disclosed by law. The language used in the information disclosure documents shall be concise, natural and easily comprehensible.

The contents prescribed by the CSRC are the minimum requirements. A listed company shall fully disclose all information that would have a material effect on the decisions of investors.

Article 53: Within two working days of a securities offering motion being voted on and adopted by the board of directors, it shall be reported to the stock exchange and a notice convening a shareholders' general meeting shall be announced.

If the proceeds are to be used to acquire assets or equity, basic information on and the transaction price of the assets or equity, the basis for setting the price and whether the material interests of the company's shareholders or other affiliates are involved shall be disclosed at the same time the notice convening the shareholders' general meeting is announced.

Article 54: The listed company shall announce the resolutions of the shareholders' general meeting within two working days of the date of adoption of the offering motion by the shareholders' general meeting.

Article 55: Within one working day of receiving either of the following two decisions on its offering application from the CSRC, a listed company shall announce the same:

(1) the CSRC does not accept the application or terminates its examination thereof; or

(2) the CSRC withholds or grants its approval.

If a listed company decides to withdraw its securities offering application, it shall announce the same the working day following the withdrawal.

Article 56: All of the listed company's directors, supervisors and senior management personnel shall sign the prospectus, guarantee that it does not contain any false or misleading statements or material omissions, and state that they are assuming joint and several legal liability therefor.

Article 57: The sponsor and sponsor's representative shall conduct a due diligence investigation of the prospectus and sign it in confirmation that it does not contain any false or misleading statements or material omissions and state that it/he/she is assuming the attendant legal liability.

Article 58: The certified public accountants, asset appraisers, credit rating personnel and lawyers that issue specialist documents for a securities offering and the firms that they belong to shall issue such documents in accordance with the commonly accepted business standards and ethical standards of their professions and state that they assume liability for the truthfulness, accuracy and completeness of the documents that they issue.

Article 59: The audit reports, earnings forecast report, asset appraisal reports, credit rating report cited in the prospectus shall be issued by qualified securities service firms and signed by at least two qualified persons.

The legal opinion cited in the prospectus shall be issued by a law firm and signed by at least two handling lawyers.

Article 60: A prospectus shall be valid for six months from the date of the last signature.

An asset appraisal report or credit rating report whose period of validity has expired may not be used for a prospectus.

Article 61: A listed company shall publish an abstract of the prospectus for the securities offering approved by the CSRC in at least one newspaper designated by the CSRC between two and five working days prior to the public offering of securities, publish the entire document on the website designated by the CSRC and make it available for review by the public at the place designated by the CSRC.

Article 62: After a listed company makes a non-public offering of new shares, it shall publish a report on the offering in at least one newspaper designated by the CSRC, publish the same on the website designated by the CSRC and make it available for review by the public at the place designated by the CSRC.

Article 63: A listed company may publish an abstract of or its entire prospectus or a report on its offering on other websites or in other newspapers, provided that the same is not done earlier than the information disclosure period specified in Article 61 or 62.

PART SIX: REGULATION AND PENALTIES

Article 64: If a listed company violates these Measures, the CSRC may order it to rectify the matter; and may take such administrative regulation measures against its person directly in charge and other directly responsible persons as giving them a regulatory lecture, designating them as inappropriate candidates, etc., record the same in their trustworthiness files and publish the same.

Article 65: If a listed company, its person directly in charge and other directly responsible persons violate laws, administrative regulations or these Measures and, if, in accordance with the law, they should be subjected to administrative penalties, they shall be subjected to administrative penalties in accordance with relevant provisions; if a criminal offence is suspected, the case shall be transferred to the judicial authorities for pursuit of their criminal liability.

Article 66: If the application documents submitted by a listed company contain false or misleading statements or material omissions, the CSRC may decide to terminate the examination of its application and to not accept further applications for the public offering of securities by such company for a period of 36 months.

Article 67: If a listed company discloses an earnings forecast and if the actual profit figure fails to reach 80% of the earnings forecast, its legal representative and the certified public accountant who signed the earnings forecast audit report shall publicly explain the same and apologize to the shareholders' general meeting and in newspapers designated by the CSRC, unless such failure was due to force majeure. The CSRC may give the legal representative a warning.

If the actual profit figure fails to reach 50% of the earnings forecast, the CSRC will not accept further applications for the public offering of securities by such company for a period of 36 months, unless such failure was due to force majeure.

Article 68: If a listed company violates Item (3) or (4) of Article 10 hereof, the CSRC shall order it to rectify the matter and will not accept further applications for the public offering of securities by such company for a period of 36 months.

Article 69: If the audit report, legal opinion, asset appraisal report, credit rating report or other specialist document issued for a securities offering by a securities service firm and its personnel contains false or misleading statements or material omissions, in addition to bearing the legal liability specified in securities regulations, the CSRC will not accept the specialist documents for securities offerings issued by the relevant firm for a period of 12 months and not accept the specialist documents for securities offerings issued by its relevant personnel for a period of 36 months.

Article 70: If an underwriter in the course of a non-public offering of new shares offers such new shares to persons who do not comply with Article 37 hereof, the CSRC may order it to rectify the matter and not accept its participation in securities underwriting for a period of 36 months.

Article 71: If in the course of a non-public offering of new shares a listed company violates Article 49 hereof, the CSRC may order it to rectify the matter and not accept applications for the public offering of securities by such company for a period of 36 months.

Article 72: If a particular person as specified in these Measures transfers shares before the expiration of the lockup period without authorization, the CSRC may order him/her to rectify the matter. If the circumstances are serious, the particular person shall be prohibited from subscribing for securities for a period of 12 months.

Article 73: If a listed company, its sponsor and/or underwriter provide financial assistance or compensation to an investor participating in the subscription, the CSRC may order it/them to rectify the matter; if the circumstances are serious, it shall give it/them a warning and impose a fine.

PART SEVEN: SUPPLEMENTARY PROVISIONS

Article 74: The measures for the offering by listed companies of securities subscribed for in foreign currency and the measures for the offering by listed companies of securities to its employees as an incentive will be formulated separately by the CSRC.

Article 75: These Measures shall be effective as of
May 8 2006. The Measures for the Administration of Offerings of New Shares by Listed Companies (Order of the CSRC No.1), the Circular on Duly Carrying out the Work Associated with the Offerings of New Shares by Listed Companies (Zheng Jian Fa [2001] No.43), the Circular on Relevant Conditions for the Offering of New Shares by Listed Companies (Zheng Jian Fa [2002] No.55), the Implementing Measures for the Offering of Convertible Bonds by Listed Companies (Order of the CSRC No.2) and the Circular on Duly Carrying out the Work Associated with the Offering of Convertible Bonds by Listed Companies (Zheng Jian Fa Xing Zi [2001] No.115) are repealed simultaneously.