Jiangxi Huabang law firm
About Jiangxi Hongcheng Environment Co.Ltd(600461)
Issuing shares and paying cash to purchase assets and raising supporting funds and related party transactions
Supplementary legal opinion (II)
Jiangxi Huabang law firm
February, 2002
4th floor, Olympic building, No. 28 Fuzhou Road, Nanchang, Jiangxi Province zip code: 330006
Tel: (0791) 8689128689135186891311 Fax: (0791) 86891347
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Part I: reply to feedback Part II: verification of matters during the supplementary period of this transaction one hundred and thirty-six
Jiangxi Huabang law firm
About Jiangxi Hongcheng Environment Co.Ltd(600461)
Issue shares and pay cash to purchase assets and raise supporting funds
Capital and related party transactions
Supplementary legal opinion (II)
To: Jiangxi Hongcheng Environment Co.Ltd(600461)
Jiangxi Huabang law firm (hereinafter referred to as "Huabang") according to the agreement of the special legal counsel contract signed with Jiangxi Hongcheng Environment Co.Ltd(600461) (hereinafter referred to as " Jiangxi Hongcheng Environment Co.Ltd(600461) ", "company" or "listed company"), Served as the special legal adviser of Jiangxi Hongcheng Environment Co.Ltd(600461) this plan to purchase 100% equity of Dingyuan ecology held by water industry group and raise supporting funds (hereinafter referred to as "this transaction" or "this reorganization") by issuing shares and paying cash.
In accordance with the company law of the people's Republic of China, the securities law of the people's Republic of China, the measures for the administration of major asset restructuring of listed companies, the measures for the administration of securities issuance of listed companies and other relevant laws and regulations, as well as the relevant provisions of the China Securities Regulatory Commission, and in accordance with the business standards, ethics and diligence recognized by the lawyer industry, The legal opinion of Jiangxi Huabang law firm on Jiangxi Hongcheng Environment Co.Ltd(600461) issuing shares and paying cash to purchase assets and raise supporting funds and related party transactions and the supplementary legal opinion of Jiangxi Huabang law firm on Jiangxi Hongcheng Environment Co.Ltd(600461) issuing shares and paying cash to purchase assets and raise supporting funds and related party transactions (I) have been issued for this transaction (hereinafter referred to as“ Supplementary legal opinion (I) (the above documents are hereinafter collectively referred to as the "original application legal documents").
According to the requirements of "No. 213005" Notice of the CSRC on the first feedback on the examination of administrative licensing projects (hereinafter referred to as the "feedback") issued by the China Securities Regulatory Commission on November 26, 2021, and from the date of issuance of the legal opinion to the date of issuance of this supplementary legal opinion (hereinafter referred to as the "supplementary period"), Lawyer Huabang conducted supplementary verification on the relevant progress of this transaction and updated the matters disclosed in the legal opinion. On this basis, Huabang lawyer issued the supplementary legal opinion of Jiangxi Huabang law firm on Jiangxi Hongcheng Environment Co.Ltd(600461) issuing shares, paying cash to purchase assets, raising supporting funds and related party transactions (II) (hereinafter referred to as "this supplementary legal opinion"). This supplementary legal opinion is a supplement to the original application legal documents. In case of any inconsistency between the original application legal documents and this supplementary legal opinion, this supplementary legal opinion shall prevail. For the part that has been expressed in the original application legal documents, this supplementary legal opinion will not be repeated.
Unless otherwise stated in this supplementary legal opinion, the definitions, terms and abbreviations used in the original legal documents and the confirmation, commitment and statement made are applicable to this supplementary legal opinion.
Huabang issued the following supplementary legal opinions in accordance with the business standards, ethics and diligence recognized by the lawyer industry:
Feedback question 1
According to the application documents and public information, 1) Jiangxi Dingyuan ecological environmental protection Co., Ltd. (hereinafter referred to as Dingyuan ecology or the underlying asset) is a newly established shareholding company. Among the four subsidiaries, Jiangxi Hongyuan Environmental Development Co., Ltd. (hereinafter referred to as Hongyuan environment) and Nanchang Lvyuan environmental water Co., Ltd. (hereinafter referred to as Lvyuan environment) have been established for a short time, Both were established in December 2020 and the business operation approval time is July 2021. They are mainly engaged in the investment and operation of BOT projects such as food waste, landfill leachate treatment and leachate concentrate treatment projects. 2) As of the signing date of the restructuring report, the above two companies have not signed the project franchise agreement and have not obtained the construction project planning and construction permit, but the construction of relevant projects has entered the closing stage. The land for BOT project is allocated by Nanchang Water Industry Group Co., Ltd. (hereinafter referred to as water industry group). 3) Hongyuan environment and Lvyuan environment both suffered losses in the first half of 2021, and the asset liability ratio exceeded 95% at the end of June 2021; By the end of February 2021, the proportion of inventories in assets and the proportion of Engineering accounts payable in liabilities were close to 100%. Please your company: 1) supplement and disclose whether Hongyuan environment and Lvyuan environment have obtained the franchise right through bidding or competitive negotiation, and whether the construction of BOT project without business operation approval, signing the franchise agreement and obtaining the construction project planning and construction permit complies with relevant laws and regulations, Whether the above circumstances comply with the provisions of item 1, paragraph 1, Article 11 of the measures for the administration of major asset restructuring of listed companies (hereinafter referred to as the "restructuring measures"), and whether there will be major uncertainty in the franchise business. 2) Supplementary disclosure shall be made on whether Hongyuan environment and Lvyuan environment are the project company, the internal organization setting and staffing of the company, and whether the business, assets, finance and personnel are independent of the water industry group and its related parties. 3) Supplementary disclosure of whether the leased allocated land complies with the provisions of land management laws and regulations and performs relevant approval procedures. Whether the land for franchise projects completely depends on the leasing of water industry group will affect the independence of the above two companies. 4) Combined with the fact that the proportion of Engineering accounts payable in liabilities is close to 100%, supplementary disclosure shall be made on whether the engineering accounts payable of the above two companies are from related party transactions. If so, supplementary disclosure shall be made on whether the transaction pricing is fair and the specific measures to ensure the independence of the above two companies after the completion of the transaction. 5) In combination with the above, analyze and supplement the necessity of purchasing flood source environment and green source environment in this transaction, and whether it complies with the provisions of item 1, paragraph 1, Article 43 of the reorganization measures. Independent financial advisers, lawyers and accountants are invited to check and express clear opinions.
reply:
1、 Whether Hongyuan environment and Lvyuan environment have obtained the franchise right through bidding or competitive negotiation, and whether the start-up of BOT project construction without business operation approval, franchise agreement and construction project planning and construction permit complies with relevant laws and regulations, Whether the above circumstances comply with the provisions of item 1, paragraph 1, Article 11 of the measures for the administration of major asset restructuring of listed companies (hereinafter referred to as the restructuring measures), and whether there will be major uncertainty in the franchise business
(I) Hongyuan environment and Lvyuan environment did not obtain the franchise right through bidding or competitive negotiation, but the franchise business will not have significant uncertainty due to the defects of the acquisition procedure
1. The franchise rights of Hongyuan environment and Lvyuan environment were not obtained through bidding or competitive negotiation. The details are as follows:
Project company project name project franchise right franchise agreement signing mode agreement name right granting party signing date
Nanchang solid waste office
Manage circular economy
Hongyuan environmental food waste Department BOT Industrial Park food waste Nanchang City, December 2021, the government directly managed the waste treatment project, which was awarded by the Municipal Administration on December 23
Project franchise
agreement
Nanchang solid waste office
Manage circular economy
Lvyuan environmental landfill leachate BOT Industrial Park percolation Nanchang city December 2021 government direct treatment project liquid treatment project awarded by the Municipal Administration on December 23
franchise
agreement
Nanchang solid waste office
Manage circular economy
Leachate concentration industrial park garbage Nanchang city December 2021 government direct green source environmental liquid treatment project BOT leachate concentration Municipal Administration granted
Liquid treatment project
franchise
agreement
2. According to relevant laws and regulations, there are procedural defects in the way of obtaining franchise rights
(1) Measures for the administration of franchising of municipal public utilities (Order No. 126 of the Ministry of construction of the people's Republic of China, effective from May 1, 2004)
Article 2 of the measures for the administration of franchising of municipal public utilities stipulates: "these Measures shall apply to the franchising of urban water supply, gas supply, heat supply, public transportation, sewage treatment, garbage treatment and other industries according to law.
”Article 4 of the measures for the administration of franchising of municipal public utilities stipulates: "the competent departments of municipal public utilities under the people's governments of municipalities, cities and counties directly under the central government shall be responsible for the specific implementation of franchising of municipal public utilities within their respective administrative regions in accordance with the authorization of the people's governments (hereinafter referred to as the" competent departments ") Article 8 of the measures for the administration of franchising of municipal public utilities stipulates: "the competent department shall select investors or operators in accordance with the following procedures: (I) propose franchising projects of municipal public utilities, submit them to the people's governments of municipalities, cities and counties directly under the central government for approval, publicly publish bidding conditions to the public and accept bids; (II) According to the bidding conditions, conduct qualification examination and scheme pre examination for the bidders with franchise rights, and recommend qualified bidding candidates; (III) organize the review committee to review according to law, and select the best object of franchise right after questioning and public reply; (IV) publicize the bid winning results to the public for no less than 20 days; (V) after the expiration of the publicity period, if there is no objection to the bid winner, a franchise agreement shall be signed with the bid winner (hereinafter referred to as the "enterprise with franchise right") with the approval of the people's Government of the municipality, city or county directly under the central government. "
(2) Measures for the administration of franchising of infrastructure and public utilities (Decree No. 25 of the national development and Reform Commission of the people's Republic of China, the Ministry of finance of the people's Republic of China, the Ministry of housing and urban rural development of the people's Republic of China, the Ministry of transport of the people's Republic of China, the Ministry of water resources of the people's Republic of China and the people's Bank of China, effective as of June 1, 2015)
Article 2 of the measures for the administration of franchising of infrastructure and public utilities stipulates: "these Measures shall apply to franchising activities in the fields of infrastructure and public utilities such as energy, transportation, water conservancy, environmental protection and municipal engineering within the territory of the people's Republic of China." Article 15 of the measures for the administration of franchising of infrastructure and public utilities stipulates: "According to the approved implementation plan of the franchise project, the implementation agency shall select the franchisee through bidding, competitive negotiation and other competitive methods. If the construction and operation standards and regulatory requirements of the franchise project are clear and the market competition in relevant fields is relatively sufficient, the franchisee shall be selected through bidding." In conclusion, according to the relevant provisions of the measures for the administration of franchise of municipal public utilities and the measures for the administration of franchise of infrastructure and public utilities, there are some defects in the way Hongyuan environment and Lvyuan environment did not obtain the franchise right through bidding and competitive negotiation.
3. The franchise business will not have significant uncertainty due to the defects of the acquisition procedure
(1) According to relevant regulations, defects in acquisition procedures will not invalidate the franchise agreement
The measures for the administration of franchising of municipal public utilities and the measures for the administration of franchising of infrastructure and public utilities do not stipulate that the selection of franchisees without bidding or competitive negotiation will lead to the invalidation and cancellation of the franchise agreement or the cancellation of the franchise right and franchise project. In addition, the measures for the administration of franchising of municipal public utilities and the measures for the administration of franchising of infrastructure and public utilities, as departmental rules, do not belong to "laws or administrative regulations". Therefore, failure to perform bidding or competitive negotiation procedures does not belong to Article 153 of the civil code of the people's Republic of China, "Violation of mandatory provisions of laws and administrative regulations" leads to the invalidation of the contract or civil act.
(2) The defect of the acquisition procedure does not belong to the situation specified in the termination clause in the franchise agreement
According to the franchise agreement obtained by Hongyuan environment and Lvyuan environment, the main contents of the termination clause are as follows:
No. company name project early termination clause
(1) This Agreement may be terminated in advance through negotiation between Party A and Party B due to force majeure or when one party deems it necessary,
