Article 1 In order to regulate the disclosure of shareholder equity
changes of listed companies, to supervise those obliged to disclose
the shareholder equity changes of listed companies to perform their
obligations pursuant to the provisions, to protect the legal rights
and interests of the investors and to maintain the normal order of
the securities market, these Measures are formulated in accordance
with the Company Law, the Securities Law and other laws and relevant
administrative regulations.

Article 2 The shareholder equity changes of listed companies
(hereinafter referred to as equity changes) as mentioned in the
present Measures shall refer to the situation where the number of
shares held by an investor is changed or may be changed through
share assignment in stock exchanges; or the situation where though
the number of shares of a listed company held by an investor remains
unchanged, the number of shares controlled by that investor is
changed or may be changed through other legal means than share
assignment in stock exchanges.
Article 3 Those obliged to disclose equity changes shall, pursuant
to the present Measures, strictly perform their obligations of
information disclosure, and the information disclosed by them shall
be authentic, accurate, complete, and without false records,
misleading statements or major omissions.
The disclosure obligors and other insiders may not, before the
relevant equity changes are disclosed according to the law, disclose
relevant information by any means.
Article 4 Nobody shall take advantage of equity changes to damage
the legal rights and interests of a listed company and its
shareholders.
Nobody may take advantage of equity changes to conduct inside
trading, market manipulation and other frauds.
Article 5 China Securities Regulatory Commission (hereinafter
referred to as CSRC) shall supervise and regulate the disclosure of
equity changes according to the law.
Stock exchanges and securities registration and settlement
institutions shall, in accordance with the duties endowed by CSRS
and their professional rules, exercise daily supervision and
regulation over the disclosure of equity changes.
Chapter II Obligors of Equity Change Disclosure
Article 6 The obligors of equity change disclosure (hereinafter
referred to as disclosure obligors) shall refer to the shareholder,
share controller and group as a person that is, pursuant to the
present Measures, obliged to disclose the information when the
number of shares of a listed company held or controlled by it is
changed or may be changed and the change has reached the prescribed
ratio.
Article 7 A shareholder shall refer to a natural person, legal
person or other organization that is registered in the shareholder
register of a listed company.
Article 8 A share controller shall refer to a natural person, legal
person or other organization that, without registering the shares
under its name, controls the shares of a listed company held by
others by legal means, such as equity control relationship,
agreement, or other arrangement etc, other than share assignment in
the stock exchanges.
Article 9 A group as a person shall refer to 2 or more natural
persons, legal persons or other organizations that make the same
declaration of will when exercising their voting power of the listed
company to expand the ratio of shares of that listed company
controlled by them or to strengthen their control over the listed
company by legal means such as agreement, cooperation, association
relationship, etc.
Making the same declaration of will as mentioned in the preceding
paragraph shall include joint proposal, joint nomination of
directors, entrustment to each other of the exercise of voting power
without vote intent indicated etc; however, the open invitation of
vote agency shall be excluded.
Article 10 A group as a person shall, from the date on which the
group relation is formed, apply for temporary keeping of all the
stocks of that company respectively held or controlled by them with
the securities registration and settlement institution, the duration
of the temporary keeping shall be not less than 6 months.
Article 11 A disclosure obligor shall combine in calculation of the
shares of a listed company held or controlled by it.
A disclosure obligor that holds or controls the convertible bonds
issued by a listed company shall, during the conversion, combine in
calculation of the part that it has the right to convert with the
shares of the same listed company held or controlled by it.
Chapter III Report and Public Announcement on Equity Changes
Article 12 A disclosure obligor shall, in performance of the
disclosure obligation pursuant to the present Measures, submit the
report on equity changes of the listed company to the stock exchange
(hereinafter referred to as the report on equity changes).
The obligor mentioned in the preceding paragraph shall, when
submitting the report on equity changes, send the report also to
CSRC and send a copy to the branch of CSRC of the place where the
listed company is located, notify the listed company and make a
public announcement.
The contents and format of the report on equity changes shall be
separately worked out by CSRC.
Article 13 Where the are several disclosure obligors, one of them
may be responsible for the unified formulation of the report on
equity changes as agreed upon in written by the obligors, but each
obligor shall sign and seal in the report.
Each disclosure obligor shall be liable for the information
involving it in the report on equity changes; with respect to the
information related to several disclosure obligors involved in the
report, each obligor shall bear joint and several liabilities for
the relevant part.
Article 14 A report on equity changes shall include the following
matters:
1) Names and domiciles of the disclosure obligors;
2) Name of the listed company;
3) Changes of the shares held or controlled by the disclosure
obligors;
4) Types of equity changes;
5) Trading of shares of that listed company conducted by the
disclosure obligors in the previous 6 months;
6) Other matters need to be indicated as required by CSRC and the
stock exchange.
Article 15 If an investor starts to hold or control more than 5% of
the shares issued by a listed company, it shall, pursuant to the
present Measures, perform the disclosure obligation and submit the
report on equity changes within 3 work days after the date when the
changes take place.
That investor may not trade the shares of that listed company any
more within the aforesaid period.
Article 16 If an investor foresees to hold or control 5% of the
shares issued by a listed company, it shall perform the disclosure
obligation and submit the report pursuant to the present Measures.
If no public announcement is made, that investor may no longer trade
the shares of that listed company.
Article 17 A disclosure obligor that holds or controls more than 5%
of the shares issued by a listed company shall, each time when the
equity is changed by more than 5%, submit the report on equity
changes within 3 work days after the date when the changes take
place.
From the date of occurrence of report obligation to the second work
day following the public announcement, the disclosure obligor may
not trade the stocks of that listed company any more.
Article 18 A disclosure obligor that holds or controls more than 5%
of the shares issued by a listed company shall submit the report on
equity changes if he foresees an equity change of more than 5% of
the shares issued by that listed company.
From the date of occurrence of report obligation to the second work
day following the public announcement, the disclosure obligor may
not trade the stocks of that listed company any more.
Article 19 If the equity change of a disclosure obligor does not
exceed 5%, but the shares held or controlled by the obligor become
less than 5% of the shares issued by that company, the obligor shall
make a public announcement within 3 work days after the date of
occurrence of that fact, but is not required to submit the report on
equity changes.
Article 20 If the equity change results in the acquirement or
possible acquirement of the actual control power of the listed
company by a purchaser, the purchaser shall, pursuant to the
Measures for the Administration of Acquisition of Listed Companies,
submit the report on acquisition of the listed company to CSRC, and
to the branch of CSRC of the place where the listed company is
located, and send a copy of the report to the stock exchange, notify
that listed company and make a public announcement.
Article 21 If the share assignment through agreement results in any
of the situations of equity change prescribed in Articles 16 and 18
of the present Measures, the disclosure obligor shall, within 3 work
days after the date of signing of the agreement on share assignment,
perform the relevant obligations pursuant to Articles 16 and 18 of
the present Measures.
Article 22 If the administrative allocation results in any of the
situations of equity change prescribed in Articles 16 and 18 of the
present Measures, the disclosure obligor shall, within 3 work days
after the date of receiving the notification of approval for the
allocation by the department directly in charge of the state-owned
equity, perform the relevant obligations pursuant to Articles 16 and
18 of the present Measures.
Article 23 If the ruling of a people''s court results in any of the
situations of equity change prescribed in Articles 16 and 18 of the
present Measures, the applicant for enforcement shall, within 3 work
days after the date of confirmation of its application for share
assignment by the stock exchange, perform the relevant obligations
pursuant to Articles 16 and18 of the present Measures.
Article 24 If the change of share controllers by other legal means
than share assignment in the stock exchange results in any of the
situations of equity change prescribed in Articles 16 and 18 of the
present Measures, the disclosure obligor shall, within 3 work days
after the date of occurrence of the equity change, perform the
relevant obligations pursuant to Articles 16 and18 of the present
Measures.
Article 25 If a disclosure obligor needs to submit the report on
equity changes for a second time because of a new equity change, it
may make the report or public announcement only on the part that is
different from that of the previous report.
Article 26 If the reduction of equity capital by a listed company
results in any of situations of equity change of the disclosure
obligor prescribed in Articles 15, 16, 17 and18 of the present
Measures, the disclosure obligor is not requested to submit the
report on equity changes.
In case of a reduction of the equity capital, a listed company
shall, within 2 work days after the date when the changes are
registered, make a public announcement on the equity changes
resulted therefrom.
Article 27 If the shareholder is an institution undertaking
securities registration or trusteeship pursuant to the law and it
holds the shares as a result of the aforesaid operations, it is not
required to submit the report on equity changes.
Article 28 For the assignment of shares held by an institution
authorized by the State, or the assignment of shares that is subject
to administrative examination and approval, the parties concerned
shall make a public announcement on the relevant decisions within 3
work days after the date of receiving the approval for the
assignment by the relevant department in charge.
Article 29 A disclosure obligor shall, within 2 work days after the
date of registration of transfer of ownership over the shares, make
a public announcement on the transfer of ownership.
If a disclosure obligor fails to finish the formalities for transfer
of ownership of shares within 30 days after the public announcement
of equity changes, it shall make another public announcement
immediately and explain the reasons; a public announcement shall be
made every 30 days before the transfer of ownership is finished.
Article 30 If a disclosure obligor that has made a public
announcement on the report of equity changes is involved in any of
the following situations, it shall make a public announcement on
that situation within 2 work days after the date of occurrence, but
it is not required to stop trading the stocks of that listed company
or to submit a new report on equity changes:
1) In concentrated competitive trading in the stock exchange, each
time the shares of the listed company held by the obligor is
increased or reduced by 1%;
2) Any member of the group as a person is changed;
3) Other situations provided for by CSRC and the stock exchange.
Article 31 A listed company shall verify the equity changes with the
securities registration and settlement institution regularly, and
shall report to the stock exchange in time.
Article 32 If any relevant information is spread in the media or
trading of the shares of the company becomes abnormal before the
relevant information about the equity changes is disclosed pursuant
to the law, the board of directors of the listed company shall check
with the relevant shareholders immediately, which shall reply in
written form in a timely manner, and the company shall make a public
announcement in a timely manner.
Article 33 A disclosure obligor shall disclose the information
related to equity changes on at least one media designate by CSRC;
the contents of disclosure in other media shall be consistent with
those on the designated media, and the time of disclosure shall be
not earlier than that on the designated media.

Chapter IV Regulatory Measures and Legal Liabilities

Article 34 If a disclosure obligor fails to perform the relevant
obligations pursuant to the present Measures, it shall make
voluntary corrections; for its failure to correct, the stock
exchange shall deal with it pursuant to its professional rules, and
the securities registration and settlement institution shall suspend
processing the formalities for transfer of share ownership for it
pursuant to its professional rules; if the obligor refuses to
correct, CSRC shall order it to correct. In case of any violation of
the securities laws and regulations, the legal liabilities shall be
investigated pursuant to the law.

Article 35 If the information disclosed by the disclosure obligor
contains false records, misleading statements or major omissions, it
shall make voluntary corrections; for its failure to correct, the
stock exchange shall deal with it pursuant to its professional
rules, and the securities registration and settlement institution
shall suspend processing the formalities for transfer of share
ownership for it pursuant to its professional rules; if the obligor
refuses to correct, CSRC shall order it to correct. In case of any
violation of the securities laws and regulations, the legal
liabilities shall be investigated pursuant to the law.

Article 36 If a disclosure obligor fails to disclose information
pursuant to the provisions, and is suspected of inside trading,
market manipulation or other frauds, CSRC shall investigate the case
and punish the offender pursuant to the law.
During the investigation of the disclosure obligor for the acts
prescribed in the preceding paragraph, the disclosure obligor may
not nominate any director, supervisor or senior officer to the
relevant listed company.

Chapter V Miscellaneous

Article 37 The "association relationship" referred to in the present
Measures has the same meaning as that of the "association
relationship" used in the Accounting Rules for Business Enterprises
-- Disclosure of Association Relationship and of Trading between
Associated Parties.

Article 38 The present Measures shall enter into force on December
1, 2002.

Bright Jon    Attorney-at-law   Fax: +86-512-53516040  email@colaw.cn
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