Announcement on the reply to the letter of concern of Shenzhen Stock Exchange
The Great Wall Of Culture Group Holding Co.Ltd.Guangdong(300089) (hereinafter referred to as “the company” and “the great wall of culture”) received the letter of concern on The Great Wall Of Culture Group Holding Co.Ltd.Guangdong(300089) (GEM concern letter [2022] No. 237) from the management department of gem company of Shenzhen Stock Exchange on May 12, 2022. The company implemented the relevant issues one by one, and now announced the relevant replies as follows: (1) please supplement the current directors The number and whether it complies with the provisions on the minimum quorum of directors in Article 108 of the company law, and in combination with the provisions of Article 46 of the rules for the general meeting of shareholders of listed companies, supplement whether the resolution of the general meeting of shareholders to remove sun Guangming from his post of director is legal and effective. Ask a lawyer to check and express clear opinions. Reply: (I) the number of directors currently in office and whether they comply with the provisions of Article 108 of the company law on the minimum quorum of directors
According to the announcement on the resignation of directors and independent directors of the company (Announcement No.: 2021148), announcement on the resignation of directors of the company (Announcement No.: 2022046), supplementary announcement on the notice of convening the third extraordinary general meeting of shareholders in 2022 (Announcement No.: 2022082) publicly disclosed by cultural Great Wall on cninfo.com (hereinafter referred to as “disclosure”) The annual report of 2021 (Announcement No.: 2022085), the announcement of the resolution of the third extraordinary general meeting of shareholders in 2022 (Announcement No.: 2022102) and the legal opinion of Shanghai Xulun law firm on the third extraordinary general meeting of shareholders in 3 H&R Century Union Corporation(000892) 022 from April 12, 2022 (the date of the resolution of the 12th meeting of the Fifth Board of directors) to May 23, 2022 are as follows:
Name director type position status description
number
According to the resolution of the third extraordinary general meeting of shareholders in 2022, Chairman Sun Guangming was dismissed from his post
(Announcement No.: 2022102) was dismissed
2. Director Mao Weiping in office/
3. Qian Di’s independent director in office/
Chairman Zhang Yuchen applied for resignation on February 25, 2023
Five independent directors resigned from the company and applied for resignation on December 27, 2021
6. Director Xu Jie was in office and was elected as a director on May 6, 2022
7. Li Xiang, an independent director, was elected as an independent director on May 6, 2022
Paragraph 1 of Article 108 of the company law stipulates that a joint stock limited company shall have a board of directors with five to 19 members. Article 106 of the The Great Wall Of Culture Group Holding Co.Ltd.Guangdong(300089) articles of Association (announced on May 21, 2021, hereinafter referred to as the “articles of association”) stipulates that the board of directors is composed of five directors, of which the number of independent directors shall not be less than one-third of the members of the board of directors.
Accordingly, as of May 23, 2022, there were four serving directors of the board of directors of great cultural wall, namely Mao Weiping and Xu Jie, and independent directors Qian Di and Li Xiang. Therefore, the number of in-service directors of Cultural Great Wall does not comply with the provisions on the minimum quorum of directors in Article 108 of the company law.
(II) whether the resolution of the general meeting of shareholders to remove sun Guangming from the position of director is legal and effective
According to the announcement publicly disclosed by Cultural Great Wall from April 12, 2022 to April 28, 2022, the convening and convening procedures of the general meeting of shareholders of Cultural Great Wall to remove sun Guangming from the post of director are as follows:
On April 11, 2022, the Cultural Great Wall held the 12th meeting of the 5th board of directors, deliberated and adopted the proposal on convening the third extraordinary general meeting of shareholders in 2022, and proposed to convene the third extraordinary general meeting of shareholders in 2022 on May 6, 2022.
On April 28, 2022, the board of directors of great cultural wall issued the announcement on the receipt of the interim proposal of the general meeting of shareholders by the board of directors (Announcement No.: 2022081), adding the deliberation on the proposal on the removal of Mr. Sun Guangming from the office of director of the company, that is, the removal of sun Guangming (the actual controller) from the office of director is an interim proposal proposed by the shareholders; On the same day, the board of directors of great cultural wall disclosed the supplementary announcement on the notice on convening the third extraordinary general meeting of shareholders in 2022 (Announcement No.: 2022082).
On the afternoon of May 6, 2022, the great wall of culture held the third extraordinary general meeting of shareholders in 2022 and disclosed the announcement of the resolution of the third extraordinary general meeting of shareholders in 2022 (Announcement No.: 2022102). On the same day, the great wall of culture disclosed the legal opinion of Shanghai Xulun law firm on the third extraordinary general meeting of shareholders in 3 H&R Century Union Corporation(000892) 022.
Therefore, we believe that the resolution of the third extraordinary general meeting of shareholders of Cultural Great Wall in 2022 is legal and effective.
(2) In combination with articles 96 and 100 of the guidelines for the articles of association of listed companies, article 4.2.3 of the GEM Listing Rules and article 3.2.11 of the guidelines for the self discipline supervision of listed companies No. 2 – standardized operation of GEM listed companies, your company is requested to supplement the effective time of sun Guangming’s dismissal as a director, whether the resignation of Zhang Congjian and Zhang Yuchen is effective and whether they continue to perform their duties as directors. Ask a lawyer to check and express clear opinions.
reply:
(I) effective time of sun Guangming’s dismissal as a director
According to the 2021 annual report disclosed by Cultural Great Wall on April 30, 2022, sun Guangming served as the chairman of the company from April 30, 2021 to April 30, 2024. According to the announcement on the resolution of the third extraordinary general meeting of shareholders in 2022 and other documents disclosed by the Cultural Great Wall on May 6, 2022, the third extraordinary general meeting of shareholders of the Cultural Great Wall deliberated and approved the proposal on requesting the removal of Mr. Sun Guangming from the position of director of the company, and removed sun Guangming from the position of director.
Article 4.2.3 of the GEM Listing Rules of Shenzhen Stock Exchange (revised in 2020) stipulates that the directors of listed companies shall be elected or replaced by the general meeting of shareholders, and may be removed by the general meeting of shareholders before the expiration of their term of office. The term of office of a director shall not exceed three years, and he may be re elected upon expiration of his term of office. Paragraph 1 of article 96 of the articles of association stipulates that directors shall be elected or replaced by the general meeting of shareholders, and may be removed by the general meeting of shareholders before the expiration of their term of office.
The term of office of the directors is three years, and they can be re elected upon expiration of their term of office. Based on the above provisions, the general meeting of shareholders of a listed company may remove directors from their positions before the expiration of their term of office.
We note that paragraph 2 of Article 45 of the company law and article 3.2.11 of the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies stipulate that under the circumstances that the number of board members is lower than the quorum due to the resignation of directors during their term of office, the original directors shall still perform their duties before the re elected directors take office, which is only applicable to the resignation of directors.
At the same time, Article 3 of the provisions of the Supreme People’s Court on Several Issues concerning the application of the company law of the people’s Republic of China (V) stipulates that if a director is removed from office by an effective resolution of the shareholders’ meeting or the shareholders’ meeting before the expiration of his term of office, and his claim for removal has no legal effect, the people’s court will not support it. Accordingly, if a director is dismissed by a valid resolution of the general meeting of shareholders before the expiration of his term of office, the dismissal shall have legal effect.
In addition, the proposal on the removal of Mr. Sun Guangming as a director of the company contained in the announcement on the receipt by the board of directors of the interim proposal of the general meeting of shareholders disclosed by Cultural Great Wall on April 28, 2022 considers that “Mr. Sun Guangming is no longer suitable to serve as a director of the company and is hereby proposed to be removed by the general meeting of shareholders under the condition that it can be reasonably expected that the removal of Mr. Sun Guangming’s director will lead to less than a quorum after it takes effect”, There is no expression of intention that the number of members of the board of directors is lower than the quorum after sun Guangming’s dismissal, and that sun Guangming should still perform his duties as a director before the re elected director takes office.
Moreover, article 3.2.13 of the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies stipulates that if there are specific circumstances for directors, the relevant directors shall immediately stop performing their duties and the company shall remove them in accordance with the corresponding provisions; If the relevant director should be dismissed but has not been dismissed, and participates in the meeting of the board of directors and votes, the voting result is invalid. There is no arrangement in article 3.2.11 that “if the number of members of the board of directors is lower than the quorum, the original directors shall still perform their duties before the re elected directors take office”. That is, “before the re elected directors take office, the original directors shall still perform their duties as directors” does not necessarily apply to “the number of members of the board of directors is less than the quorum”.
Therefore, we tend to believe that the Cultural Great Wall held the third extraordinary general meeting of shareholders in 2022 on May 6, 2022, deliberated and adopted the proposal on requesting the removal of Mr. Sun Guangming from the office of director of the company, and the effective time of sun Guangming’s removal from the office of director is the date of adoption of the resolution of the general meeting of shareholders, i.e. May 6, 2022.
(II) whether the resignation of Zhang Congjian and Zhang Yuchen is effective and whether they continue to perform their duties as directors
According to the announcement on the resignation of directors of the company (Announcement No.: 2022046) and the announcement on the resignation of directors and independent directors of the company (Announcement No.: 2021148) disclosed by Cultural Great Wall, director Zhang Yuchen applied for resignation on March 25, 2022 and independent director Zhang Congjian applied for resignation on December 27, 2021.
Paragraph 2 of Article 45 of the company law stipulates that if the number of members of the board of directors is lower than the quorum due to the resignation of directors during their term of office, the original directors shall still perform their duties in accordance with laws, administrative regulations and the articles of association before the re elected directors take office. Article 3.2.11 of the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies stipulates that if the resignation of directors leads to the number of members of the board of directors being lower than the minimum quorum, the resignation of independent directors leads to the number of independent directors being less than one-third of the members of the board of directors, or there are no accounting professionals among the independent directors, the resignation report shall not take effect until the next director fills the vacancy caused by his resignation.
According to the above provisions, the resignation of Zhang Congjian, an independent director of Great Wall culture, and Zhang Yuchen, a director of Great Wall culture, has resulted in the number of members of the board of directors being lower than the minimum quorum, and there are no accounting professionals among the independent directors. The resignation report of Zhang Congjian, an independent director, and Zhang Yuchen, a director of Great Wall culture, shall not take effect until the next director fills the vacancy arising from their resignation.
According to the announcement on the resolution of the third extraordinary general meeting of shareholders in 2022 disclosed by Cultural Great Wall on May 6, 2022, the general meeting deliberated and adopted the proposal on the nomination of independent directors and the proposal on the nomination of non independent directors, elected Xu Jie as a director and Li Xiang as an independent director, and filled the resignation vacancies of director Zhang Yuchen and independent director Zhang Congjian accordingly.
In conclusion, the resignation of independent director Zhang Congjian and director Zhang Yuchen took effect when the third extraordinary general meeting of shareholders in 2022 was held on the afternoon of May 6, 2022. (3) In combination with the number and composition of currently serving directors, the minimum quorum of directors and the requirements of independent directors, your company is requested to supplement the follow-up arrangements for the by election of directors and whether the meeting of the board of directors held before the by election of directors is legal and effective. If not, please supplement the decision-making process to be implemented. Ask a lawyer to check and express clear opinions.
reply:
(I) follow up arrangements for by election of directors
As mentioned above, as of May 23, 2022, there were four directors on the board of directors of Cultural Great Wall, namely Mao Weiping and Xu Jie, and independent directors Qian Di and Li Xiang, which did not comply with the provisions on the minimum quorum of directors in Article 108 of the company law.
According to Article 100 of the company law, the general meeting of shareholders shall be held once a year. Under any of the following circumstances, an extraordinary general meeting of shareholders shall be held within two months: (I) when the number of directors is less than two-thirds of the number specified in this law or the articles of association.
Therefore, Cultural Great Wall will hold an extraordinary general meeting of shareholders to elect new directors within two months.
(II) whether the resolution of the board of directors is valid
The meeting of the board of directors can be held only when a quorum of directors is present, and an effective resolution of the board of directors shall be formed. If the number of members of the board of directors is lower than the quorum due to the removal of directors, there is a risk that the board of directors of Cultural Great Wall will not be able to hold a normal meeting and form a resolution before the election of new directors.
(III) decision making process to be implemented
At present, the board of supervisors of the great wall of culture has received the letter to The Great Wall Of Culture Group Holding Co.Ltd.Guangdong(300089) board of supervisors sent by Mr. Sun Guangming (holding 20.10% of the voting rights of the company), which puts forward that “in order to ensure the legitimate rights and interests of shareholders, it is proposed to change the convener and host of the annual general meeting of shareholders, and it is suggested to convene an extraordinary general meeting of shareholders to consider relevant proposals as soon as possible”; According to Article 101 of the company law, “if the board of directors is unable or fails to perform the duty of convening the general meeting of shareholders, the board of supervisors shall convene and preside over it in time.”
Therefore, the 2021 annual general meeting of shareholders of Great Wall culture company is convened and presided over by the board of supervisors; Meanwhile, the board of supervisors held the 10th meeting of the 5th board of supervisors on May 23, 2022, deliberated and adopted the proposal on convening the fourth extraordinary general meeting of the company in 2022, and elected the directors of the company at this extraordinary general meeting The Great Wall Of Culture Group Holding Co.Ltd.Guangdong(300089) May 23, 2022
