Shanghai Stock Exchange, Guidelines for the Increase in Shareholding by Shareholders of Listed Companies and their Persons Acting in Concert

Promulgated: August 28 2008
Effective: As of date of promulgation
Interpreting Authority: Shanghai Stock Exchange

Applicability: The Guidelines shall apply where a shareholder and their persons acting in concert, within one year from the date on which the shares of a company listed on the Shanghai Stock Exchange in which they have an interest reach 30% or more of the company's outstanding shares, increase their holding in shares of the company in which they have an interest to not more than 2% of the company's outstanding shares every 12 months (Article 2).

Main Contents: The relevant shareholders shall notify the listed company of the increase in shareholding on the date on which the increase first occurs, and the matter shall be announced by the company on the following day (Article 3). Where a relevant shareholder's shares, upon the initial increase, has not yet reached 2% of the company's outstanding shares, and it intends to continue to increase its shareholding, the listed company shall disclose the plan for follow-up increase of shareholding in the aforementioned announcement. The relevant shareholder shall undertake that it will not reduce its shareholding in the listed company during the time limit for implementation of the follow-up plan for increase of shareholding (Article 4). Where upon the implementation of the follow-up plan for increase of shareholding, the aggregate shareholding ratio of the relevant shareholder reaches 1% of the outstanding shares of the listed company, the shareholder shall notify the company on the day of occurrence, and the company shall issue an announcement on the progress of the shareholding increase by the relevant shareholder on the following day. Prior to the expiry of the implementation period for the follow-up plan for increase of shareholding, the listed company shall disclose the details of implementation of the plan in all regular reports (Article 5). Where a relevant shareholder intends to increase their holding in shares of the company in which they have an interest to more than 2% of the company's outstanding shares within 12 months, it shall apply to the China Securities Regulatory Commission for exemption from a takeover by offer before it can increase its shareholding (Article 9).