About issuing shares to purchase assets and raising supporting funds
And related party transactions involving real estate business
Infotmic Co.Ltd(000670) (hereinafter referred to as “yingfangwei”, “company” or “listed company”) plans to purchase Shaoxing Shangyu Yuxin equity investment partnership (limited partnership) by issuing shares Shanghai Ruichen communication equipment partnership (limited partnership) holds 49% equity of Shenzhen huaxinke Technology Co., Ltd. and worldstyle Technology Holdings Limited and raises supporting funds (hereinafter referred to as “this major asset restructuring” or “this transaction”).
According to the relevant requirements of the CSRC’s regulatory policy on adjusting the real estate business involved in refinancing, M & A and reorganization of listed companies issued by the CSRC on January 16, 2015, In accordance with the relevant provisions of the State Council’s real estate regulation policies, such as the notice of the State Council on Resolutely Curbing the excessive rise of house prices in some cities (GF [2010] No. 10) and the notice of the general office of the State Council on continuing to do a good job in the regulation and control of the real estate market (GBF [2013] No. 17), During the reporting period (i.e. from January 1, 2020 to December 31, 2021) of Yingfang micro and its subsidiaries within the scope of consolidated statements, the company conducted a special inspection on whether there were compliance problems in the real estate development business in China, such as idle land, land speculation, reluctant sale, bid up house prices and so on, and issued this self inspection report as follows:
1、 Scope of verification project
The real estate projects included in the verification scope include the completed, under construction and proposed real estate development projects developed in China by yingfangwei and its subsidiaries within the scope of consolidated statements during the reporting period (i.e. from January 1, 2020 to December 31, 2021).
During the reporting period, among Yingfang micro and its subsidiaries within the scope of consolidated statements, only the business scope of Yingfang micro holding subsidiaries Changxing Xinyuan Industrial Technology Co., Ltd. (hereinafter referred to as “Changxing Xinyuan”) and Chengdu Shunquan Investment Co., Ltd. (hereinafter referred to as “Chengdu Shunquan”) had real estate development business. Among them, Chengdu Shunquan is actually mainly engaged in municipal infrastructure construction and has not been engaged in real estate development since its establishment.
After verification, there is one completed real estate development project in the reporting period of Changxing Xinyuan, and there are no projects under construction or to be built. The specific projects are shown in the table below:
Project name of the region where the serial number is located, development status and sales of the development unit
1. Changxing Xinyuan of phase III of Royal Bay Mingdi, Mingzhu Road, Changxing County has been completed and sold
2、 Special verification and verification opinions
(I) relevant regulations applicable to verification
1. Notice of the State Council on Resolutely Curbing the excessive rise of house prices in some cities (hereinafter referred to as “GF [2010] No. 10 document”)
The article stipulates that “commercial banks shall not issue loans for new development projects to real estate development enterprises with idle land and land speculation, and the securities regulatory department shall suspend the approval of their listing, refinancing and major asset restructuring.”
The article also calls for strengthening the supervision of trading order, “For the real estate development projects that have obtained the pre-sale license or handled the existing house sales record, all the houses for sale shall be disclosed at one time within the specified time, and the prices shall be clearly marked for sale in strict accordance with the declared prices. The housing and urban rural construction department shall clean up the commercial housing projects that have issued the pre-sale license, and deal with the houses that are reluctant to sell, hoarding houses, driving up house prices, etc The qualification and punishment of real estate development personnel who violate the regulations shall be increased, and the serious problems of real estate development personnel shall be investigated and punished. “
2. Notice of the general office of the State Council on continuing to do a good job in the regulation and control of the real estate market (hereinafter referred to as “GBF [2013] No. 17 document”)
According to the text, “The relevant departments should establish a linkage mechanism and intensify the investigation and punishment of real estate development enterprises that have committed illegal acts such as idle land, land speculation, reluctant sale, and bid up house prices. The land and resources departments should prohibit them from participating in land bidding, banking financial institutions should not issue loans for new development projects, and the securities regulatory authorities should suspend the approval of their listing, refinancing or major asset restructuring , the banking regulatory authorities should prohibit them from financing through trust plans. “
The article also stipulates that “we will continue to strictly implement the regulations on clearly marked prices and one house one price for commercial housing sales, and sell them in strict accordance with the declared prices.”
3. The CSRC’s regulatory policy on adjusting the real estate business involved in refinancing, M & A and reorganization of listed companies (hereinafter referred to as the “regulatory policy”)
The article stipulates that “if the refinancing, M & A and reorganization of listed companies involve real estate business, the Ministry of land and resources will no longer conduct prior review. For the determination of whether there are problems such as idle land, the administrative punishment information published by the Department of land and resources shall prevail; for whether there are matters under investigation, the intermediary shall fully verify and disclose.”
It also provides that, “A listed company shall disclose in a timely manner the investigation and punishment of land use violations. When applying for real estate refinancing, M & A and reorganization projects, a listed company shall publicly disclose whether the relevant real estate enterprises have committed violations during the reporting period, whether they have been subject to administrative punishment or are being (filed) The investigation, as well as the corresponding rectification measures and rectification effects. The directors, senior managers and their controlling shareholders, actual controllers or other information disclosure obligors of listed companies (including the counterparties of major asset restructuring or issuing shares to buy assets of listed companies) shall make public commitments in the information disclosure documents. If the relevant real estate enterprises have undisclosed illegal acts such as idle land, If losses are caused to listed companies and investors, they will be liable for compensation. “
According to the above requirements of GF [2010] No. 10 document, GBF [2013] No. 17 document and regulatory policy, listed companies, independent financial consultants and lawyers have checked the implementation of relevant provisions of the above projects during the verification period of Changxing Xinyuan one by one.
(II) special verification
According to the requirements of the above regulatory provisions, listed companies, independent financial advisers and lawyers have properly classified the main violations that may exist in the process of real estate development, operation and sales, and divided the verification contents into the verification of land idleness, land speculation, concealment and reluctance to sell, and the verification of driving up house prices.
In order to implement this verification, the listed company, independent financial consultant and lawyer obtained the documents related to land use, the approval documents of real estate project construction procedures, the documents related to commercial housing pre-sale provided by Changxing Xinyuan, the compliance confirmation documents issued by the relevant competent authorities, and inquired the websites of the municipal natural resources management department and housing construction management department where the real estate project is located, The specific verification is as follows:
1. Verification of idle land
(1) Relevant regulations
According to Article 26 of the law of the people’s Republic of China on the administration of urban real estate, “if the land use right is obtained by means of transfer for real estate development, the land must be developed according to the land use and the construction and development period agreed in the land use right transfer contract.
If the development has not been started for one year beyond the date agreed in the transfer contract, a land idle fee equivalent to less than 20% of the land use right transfer fee may be levied; If the development has not started for two years, the land use right may be recovered free of charge; However, except for the delay in the commencement of development due to force majeure or the acts of the government or relevant government departments or the preliminary work necessary for the commencement of development. “
According to Article 2 of the measures for the disposal of idle land, “the following situations constitute idle land:
(1) The state-owned construction land that has not been developed for more than one year after the commencement date stipulated in the paid use contract or allocation decision of the state-owned construction land use right;
(2) The development of state-owned construction land that has been started but the area of development and construction land accounts for less than one-third of the total area of development and construction land that should be started, or the amount of investment accounts for less than 25% of the total investment, and the development and construction of state-owned construction land shall be suspended for one year. “
The regulatory policy stipulates that “for the determination of whether there are problems such as idle land, the administrative punishment information published by the Department of land and resources shall prevail; for the existence of matters under investigation, the intermediary shall fully verify and disclose.”
(2) Verification results
After verification, Changxing Xinyuan signed a land transfer contract with Changxing County Bureau of land and resources in May 2009 and agreed to start construction before December 27, 2009. Changxing Xinyuan obtained a construction permit on January 13, 2010, and there is no idle land specified in the measures for the disposal of idle land.
The natural resources and Planning Bureau of Changxing County has issued the certificate on December 31, 2021, stating that after investigation, Changxing Xinyuan has not found any administrative punishment for violating land management laws and regulations from January 1, 2018 to the date of issuing the certificate.
According to the documents related to the acquisition of land use right, construction approval documents and other relevant materials of the real estate development project included in the verification scope provided by Changxing Xinyuan, and confirm and query the relevant websites of the natural resources management department where the project is located, during the verification period, During the development of the above verification projects, Changxing Xinyuan has not received the confirmation of idle land issued by the relevant natural resources management department, and there is no land idle fee levied and land recovered due to idle land, and there is no administrative punishment due to idle land; As of December 31, 2021, during the development of the above verification project of Changxing Xinyuan, there is no case under investigation due to idle land.
2. Verification of land speculation
(1) Relevant regulations
GF [2010] No. 10 stipulates that “the land and resources department shall strictly collect the land transfer price, deepen the supervision of contract implementation, strengthen the investigation and treatment of idle land, and strictly investigate and deal with illegal land use, land hoarding and land speculation”, “For real estate development enterprises with idle land and land speculation, commercial banks shall not issue loans for new development projects, and the securities regulatory department shall suspend the approval of their listing, refinancing and major asset restructuring”.
The current laws, regulations and normative documents have not made specific and clear provisions on the meaning, content or applicable conditions of “land speculation”. According to the notice of the general office of the State Council on issues related to further improving the regulation and control of the real estate market (GBF [2011] No. 1 document) issued by the general office of the State Council on January 26, 2011, “The illegal transfer of land use right shall be investigated and dealt with according to law. If the investment in real estate development and construction is less than 25% (excluding the land price), the land and the land development projects agreed in the contract shall not be transferred in any way”.
According to the understanding of the above provisions, land speculation refers to the act of illegally transferring the land use right to foreign countries in violation of the relevant laws and regulations of the state on the transfer of land use right without starting construction in accordance with the provisions of the land transfer contract after obtaining the use right of state-owned construction land.
(2) Verification results
According to the relevant information and confirmation provided by Changxing Xinyuan, the supporting documents issued by the relevant competent natural resources management department, and through the websites of the Ministry of natural resources and the corresponding natural resources management department where the above verification project is located, the information on the administrative punishment of land speculation publicly disclosed on these websites was consulted, During the verification period, the above verification items are not subject to administrative punishment by the natural resources management department due to land speculation, nor are they being filed for investigation by the natural resources management department due to land speculation.
3. Verification on the situation of reluctant sale of cover sector
(1) Relevant regulations
Paragraph (I) of Article 1 of the notice of the Ministry of housing and urban rural development on Further Strengthening the supervision of the real estate market and improving the pre-sale system of commercial housing (Jianfang [2010] No. 53) (hereinafter referred to as “No. 53 document”) stipulates that for commercial housing projects that have obtained the pre-sale license, the real estate development enterprise shall disclose all the permitted houses and the price of each house at one time within 10 days, And in strict accordance with the declared price, clearly marked price for external sales.
Article 1 (II) of Document No. 53 stipulates that all localities should strengthen the investigation and punishment of illegal acts such as covering and reluctant to sell. Those who have obtained the pre-sale license but fail to sell to the public within the specified time or fail to sell all the houses approved for sale to the public shall be seriously investigated and punished.
(2) Verification results
Changxing County Housing and Urban Rural Development Bureau has issued the certificate on January 5, 2022, confirming that Changxing Xinyuan has not been found to be subject to administrative punishment for violating laws and regulations on construction management in its daily production and operation from January 1, 2018 to the date of issuing the certificate.
According to the relevant information and confirmation provided by Changxing Xinyuan, the supporting documents issued by the relevant competent government departments and the website of the competent department of housing and urban rural development where the project is located, during the verification period, there was no administrative punishment by the housing construction management department for the above verification project of Changxing Xinyuan due to the act of covering and reluctant to sell in violation of the provisions of the normative documents related to the macro-control of real estate, There is also no case that the housing construction management department is filing a case for investigation due to the reluctance to sell.
4. Verification of driving up house prices
(1) Relevant regulations
According to the provisions of the State Council’s [2010] notice on promoting the development of real estate, all the prices of real estate enterprises that have obtained the pre-sale permit shall be strictly within the time limit of [2010] issued by the State Council’s office of real estate development.
Article (IX) of GF [2010] No. 10 stipulates that “for the real estate development projects that have obtained the pre-sale license or handled the existing house sales record, all the sales houses shall be disclosed at one time within the specified time, and they shall be sold at a clearly marked price in strict accordance with the declared price”.
Article 5 of the notice of the general office of the State Council on continuing to do a good job in the regulation and control of the real estate market (GBF [2013] No. 17) stipulates that “strengthen the management of pre-sale license of commercial housing”, “continue to strictly implement the regulations on clearly marked price and one house and one price for commercial housing sales, and sell abroad in strict accordance with the applied price”, “strengthen the credit management of real estate enterprises” “Timely record and publish the illegal acts of real estate enterprises”.
Paragraph (I) of Article 1 of Document No. 53 stipulates that “for commercial housing projects with pre-sale license, the real estate development enterprise shall disclose all the permitted houses and the price of each house at one time within 10 days, and sell them at a clearly marked price in strict accordance with the declared price”.
Paragraph (II) of Article 1 of Document No. 53 stipulates that “all localities shall strengthen the investigation and punishment of illegal acts such as covering the sector and reluctant to sell. The acts that have obtained the pre-sale license but fail to sell to the public within the specified time or fail to sell all the approved houses to the public shall be seriously investigated and punished”.
(2) Verification results
According to the relevant information and confirmation provided by Changxing Xinyuan, the supporting documents issued by the relevant competent government departments and the website of the competent department of housing construction where the project is located, during the verification period, the above verification items of Changxing Xinyuan did not suffer from housing construction due to driving up house prices
