Supplementary Legal Opinion (III)
Guangdong Zhongxin Xiecheng Law Firm on Midea Group Co., Ltd.'s Share Swap Absorption Merger with Guangdong Midea Electric Co., Ltd.
Guangdong Zhongxin Xiecheng Law Firm Address: Room 2604, East Tower, Huapu Plaza, 13 Huaming Road, Zhujiang New Town, Guangzhou, 510630
Phone: (020) 28865533
Fax: (020) 28865500
Dear Sir/Madam:
Guangdong Zhongxin Xiecheng Law Firm has been appointed as the special legal advisor for Midea Electric's absorption merger and is authorized to issue this legal opinion. We have previously issued legal opinions on this merger on March 28, 2013, April 24, 2013, and June 8, 2013, which are collectively referred to as the "Original Legal Opinions." In accordance with the requirements of the China Securities Regulatory Commission (CSRC) as stated in the feedback notice No. 130496 dated June 8, 2013, we are issuing this supplementary legal opinion (hereinafter referred to as "this Supplementary Legal Opinion"). This Supplementary Legal Opinion should be used in conjunction with the Original Legal Opinions. Unless otherwise specified, the abbreviations used in this Supplementary Legal Opinion are consistent with those defined in the Original Legal Opinions.
Our lawyers have verified the relevant facts of Midea Electric's absorption merger in accordance with applicable laws and regulations, and in accordance with the recognized business standards, ethical norms, and diligence spirit of the legal profession in China. The supplementary legal opinions are as follows:
- The financial advisors and lawyers of both parties to the merger should refer to the relevant provisions in the "Administrative Measures for Initial Public Offerings and Listings" and its supporting regulations to explain whether this transaction complies with the relevant regulations and to provide additional disclosures. (Feedback Question 2)
Response: Midea Group will issue A-shares to the shareholders of Midea Electric participating in this share swap to implement this transaction. The issuance complies with the substantive conditions for issuance and listing as stipulated in the Company Law, Securities Law, and the Administrative Measures for Initial Public Offerings and Listings. The specific explanations are as follows:
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Midea Group is a legally established joint-stock company. It was initiated by Midea Holdings and 14 other shareholders, with more than half of the initiators residing in China. The establishment method, number of initiators, and residence of initiators comply with the provisions of Article 77(1), Article 79 of the Company Law, and Article 8 of the Administrative Measures for Initial Public Offerings and Listings.
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Midea Group's predecessor, Midea Limited, was legally established as a limited liability company on April 7, 2000. Midea Group was established as a joint-stock company on August 30, 2012, by converting Midea Limited at a share ratio of 1:0.631212 based on the original book net asset value. The duration of operation can be calculated from the establishment date of Midea Limited. As of the date of this Supplementary Legal Opinion, Midea Group has been continuously operating for over three years, in compliance with Article 9 of the Administrative Measures for Initial Public Offerings and Listings.
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The shares to be issued by Midea Group are A-shares with a par value of RMB 1 per share, with the same issuance conditions and price for each share, and each share has equal rights, in compliance with Article 127 of the Company Law.
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The registered capital of Midea Group at the time of its conversion was RMB 1 billion. According to the verification report No. (2012) Zong Zi 150005 issued by Tianjian Zhengxin, the contributions from the initiators were fully in place at the time of conversion, and the transfer procedures for the assets used as contributions have been completed. Midea Group currently owns major assets without significant ownership disputes, in compliance with Articles 81, 83 of the Company Law and Article 10 of the Administrative Measures for Initial Public Offerings and Listings.