Industrial Bank Co., Ltd.
Announcement on the Related Transaction
Our company and all the members of the board of directors warrant the authenticity, accuracy and completeness of the announcement and bear joint and several liability for any false recording, misleading representation or major omission of the announcement.
Hints on important content:
(i) Transaction:
The eighteenth meeting of the seventh board of directors of the company examined and adopted the Proposal on Granting an Internal Basic Line of Credit to Hang Seng Bank (Including Hang Seng Bank (China) Co., Ltd.), agreeing to grant Hang Seng Bank (including Hang Seng Bank (China) Co., Ltd.) an internal basic line of credit of RMB 3 billion with a validity period of one year, and the business items under credit granting are various credit business varieties with the credit grantee’s credit risk borne by our company (excluding buyback type credit asset transfer varieties).
(ii) Avoidance of voting: This transaction is a related transaction, so the related director Mr. Feng Xiaozhong avoided voting.
(iii) Impact of related transaction: This related transaction is the company’s normal general credit granting business and has no major impact on the company’s normal operating activity and financial standings.
I. Outline of related transaction
According to the Company Law, the Management Measures for Related Transactions between Commercial Banks and Internal Persons and Shareholders and the Articles of Association, the line of credit of the above related transaction is between 1% and 10% of our net capital at the end of last quarter and is therefore a major related transaction whose reasonableness and fairness need to be examined and verified by the auditing and related transaction control commission and which submitted thereafter to the board of directors for examination and approval.
On April 18, 2013, the company held the meeting of the auditing and related transaction control commission of the seventh board of directors, examining the said related transaction proposal and agreeing to submit it to the board of directors for examination, and the eighteenth meeting of the seventh board of directors of the company approved such related transaction on April 19.
II. Introduction to related party
Hang Seng Bank has a registered capital of HKD11 billion and its legal domicile is 83 Des Voeux Road Central, Hong Kong. Hang Seng Bank invested in our company in 2004 and currently holds 10.87% of our shares as our related party. Hang Seng Bank (China) Co., Ltd. is Hang Seng Bank’s wholly-owned subsidiary and is also our related party.
Hang Seng Bank is one of HSBC Group’s major members and was Hong Kong’s largest locally registered listed bank in terms of market value by the end of 2012. Its business scope mainly includes retail banking, financing management, commercial banking, corporate banking, treasury management.
Hang Seng Bank (China) Co., Ltd. was incorporated in Shanghai in May 2007 and currently has 12 branches and 34 sub-branches in mainland China. Its major business includes corporate banking, personal banking and capital business.
III. Major content and pricing policy of related transaction
The line of credit of the above related transaction is used for internal basic credit granting on credit conditions that are neither superior to those for the same type of credit granted to other borrowers nor inferior to the company’s credit conditions from other banks; our credit granting to the above related party was conducted on general commercial transaction conditions with interest charged at a fair and reasonable market interest rate.
IV. Objective of related transaction and its impact on the listed company
This related transaction is within our normal credit granting business and has no major impact on the company’s normal operating activity and financial standings.
V. Independent directors’ opinions
Our independent directors Mr. Xu Bin, Mr. Li Ruoshan, Mr. Wu Shinong, Mr. Lin Bingkun and Mr. Zhou Qinye expressed the following independent opinions on the said related transaction:
1. Fairness. The said related transaction is priced under the principles of compensation of equal value and fair pricing and neither violates the principles of openness, fairness and justice nor damages the interests of the company and minority shareholders.
2. Procedure. On April 18, 2013, the company held the eighteenth meeting of the auditing and related transaction control commission of the seventh board of directors, examining the said related transaction proposal and agreeing to submit it to the board of directors for examination, and the eighteenth meeting of the seventh board of directors of the company approved such related transaction on April 19. The examination and approval procedures of the above major related transaction comply with laws, regulations and the company’s Articles of Association.
V. List of documents for future reference
1. Resolution of the Auditing and Related Transaction Control Commission of the Board of Directors
2. Resolution of the Board of Directors
3. Independent Opinions Signed by Independent Directors
This Announcement is hereby made for your attention.
Board of Directors of Industrial Bank Co., Ltd.
April 22, 2013