Decree of the State Administration for Industry and Commerce

No. 39

The Measures for Administration of the Registration of Equity Investment was deliberated and adopted at the executive meeting of the State Administration for Industry and Commerce of the People’s Republic of China and hereby promulgated, which shall enter into effect as of March 1, 2009.

Director Zhou Bohua

January 14, 2009

Measures for Administration of the Registration of Equity Investment

Article 1 For the purpose of regulating the registration of equity investment, the Measures are promulgated in accordance with the Company Law of the People’s Republic of China, the Regulations of the People's Republic of China on Administration of Registration of Companies and other laws and regulations be formulated.

Article 2 The administration of registration shall be subject to the Measures in the situation where an investor makes equity investment in other limited liability company or stock corporation (hereinafter referred to as invested company) within China with the stock equity in a limited liability company or stock corporation established within China (hereinafter referred to as stock equity company).

Article 3 The stock equity as investment should have a clear legal title, be free from encumbrances and transferable.

Stock equity shall not be acted as investment in the following circumstances:

(1)    If registered capital of stock equity company has not been fully paid;

(2)    If stock equity on which a pledge has been set up;

(3)    Is stock equity has been frozen by law;

(4)    If no transfer is allowed in accordance with the articles of association of the stock equity company;

(5)    If no approval is made for the transfer of stock equity by a shareholder of stock equity company which should be reported for approval in accordance with laws, administrative regulations or the decisions of the State Council; or

(6)    Any other circumstance where no transfer of stock equity shall be allowed in accordance with laws, administrative regulations or the decisions of the State Council.

Article 4 Total investment amount with stock equity and non-currency properties by all shareholders shall be no more than 70% of the registered capital of the invested company.

Article 5 Stock equity serving as investment should be appraised by the evaluation authority established by law.

Article 6 In case an investor makes investment with stock equity when an invested company is set up, it should make actual payment and the invested company should handle the registration of alteration of the actually received capital within one year upon the establishment of the company.

In case an investor makes investment with stock equity when an invested company increases registered capital, it should make actual payment before the invested company files an application to handle the registration of alteration of increase of registered capital.

Article 7 In case an investor makes actual investment with stock equity of one limited liability company, a stock equity company should apply to the company registration authority for handling the registration of altering the holder of the stock equity into the one of an invested company.

In case an investor makes actual investment with stock equity of one stock corporation, with the stock equity as investment registered in one securities registration and settlement authority, it should in accordance with provisions go through a stock exchange and securities registration and settlement authority to handle the procedures of share transfer and transfer registration; In case other stock equities are transferred to an invested company in the legal form while laws, administrative regulations or decisions of the State Council provide that approval shall be made while a shareholder of a stock corporation transfer stock equity, it should be approved by law.

Article 8 An assets inspection agency should be established by law to inspect the actual payment of stock equity and issue certification on assessment of capital should contain the following contents:

(1)    In case investment is made with the stock equity of a limited liability company, registration of shareholder alteration shall be handled in accordance with Article 7 herein for related stock equities;

(2)    In case investment is made with stock equity of a stock corporation, related stock equities shall be transferred to an invested company in accordance with Article 7 herein;

(3)    Appraisal of stock equity concerns title of an evaluation authority, number of appraisal report, base date of equity evaluation and evaluation value; and

(4)    In case equity investment shall be approved by law, approval shall be made.

Article 9 An investor makes investment with stock equity by law while establishing a company, an invested company should handle the registration of name or title, amount, way of and time of contribution of and by a contributor who makes contribution with stock equity while applying for registration of establishment. The invested company should apply for the alteration registration of actually received capital in the wake of actual contribution with stock equity by the investor; in case an invested company is a limited liability company or a stock corporation established in the form of sponsorship, it should also handle the alteration registration of amount and time of actually paid contribution of the investor.

In case an investor increases registered capital in the company and makes actual contribution with stock equity, an invested company should apply for the alteration registration of registered capital and actually received capital. In case an invested company is a limited liability company, it should also apply for the alteration registration of names or titles of related investors, amount of subscribed and actually paid contribution and time of contribution.

Article 10 Materials submitted by a stock equity company while applying for relevant registrations in accordance with Article 7 herein shall be subject to the Regulations of the Administration on Registration of Companies and the provisions concerning the materials for the registrations of enterprises by the State Administration for Industry and Commerce.

Article 11 An invested company applies for handling relevant procedures of registration in accordance with Article 9 herein shall be subject to the Regulations of the Administration on Registration of Companies and the provisions concerning the materials for the registrations of enterprises by the State Administration for Industry and Commerce and should also submit the following materials:

(1)    Letter of commitment for subscribed contribution with stock equity signed by an investor. Related investor should make commitment that stock equity as subscribed contribution shall be in line with Clause 1 of Article 3 herein and have no situations as prescribed in Clause 2 of the Article herein; and

(2)    Copies of the business license of a stock equity company (with seal of the stock equity company affixed).

Article 12 In case contribution with stock equity by an investor or an invested company violates the Company Law, the Regulations of the Administration on Registration of Companies and the Measures, or an assets inspection agency or an assets evaluation agency issues falsified certification or offers the report with material misstatements due to negligence, the company registration authority shall conduct investigation and punishment in accordance with the related provisions in the Company Law and the Regulations of the Administration on Registration of Companies

Article 13 For any matter prescribed under the Measures herein, the laws, administrative regulations or decisions of the State Council shall prevail, if otherwise specified therein.

Article 14 The Measures shall enter into effect as of March 1, 2009.