Central China Securities Co., Ltd. — Proxy Solicitation & Information Statement 2017

Sep 27, 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your securities broker or other registered securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Central China Securities Co., Ltd. (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, securities broker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

Central China Securities Co., Ltd.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “ 中原證券股份有限公司 ” and carrying on business in Hong Kong as “ 中州證券 ”)

(Stock Code: 01375)

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Letter from the Board is set out on pages 3 to 10 of this circular.

The extraordinary general meeting of the Company will be held at 9:30 a.m. on 16 October 2017 (Monday) at 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou City, Henan Province, the PRC.

The proxy form for the EGM has been posted to you on 31 August 2017. Whether or not you are able to attend the EGM in person, you are requested to complete and return the applicable proxy form in accordance with the instructions printed thereon. In case of H Shareholders, the proxy form shall be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible; but in any event, not less than 24 hours before the time scheduled for holding the relevant meeting (or any adjournment thereof) or the time appointed for the taking of the poll. Completion and delivery of the proxy form will not preclude you from attending and voting in person at the relevant meeting or any adjournment thereof if you so desire.

28 September 2017

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Proposed amendments to the Articles of Association . . . . . . . . . . . . . . . . . . . . .	3

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DEFINITIONS

In this circular, unless the context otherwise requires, the expressions below have the meanings assigned:

• “A Shares”

domestic listed ordinary shares with a nominal value of RMB1.00 each in the share capital of the Company, which are listed and traded on the main board of the Shanghai Stock Exchange

• “Articles of Association”

• the articles of association of the Company as amended from time to time

• “Board” the board of Directors

“Company” Central China Securities Co., Ltd. (中原証券股份有限公 司) (carrying on business in Hong Kong as “中州証券”, a joint stock company incorporated on 8 November 2002 in Henan Province, the PRC with limited liability, the H Shares and A Shares of which are listed on the Main Board of the Stock Exchange (stock code: 01375) and the Shanghai Stock Exchange (stock code: 601375), respectively)

“CSRC” the China Securities Regulatory Commission

• “Director(s)” director(s) of the Company

• “EGM”

the extraordinary general meeting (or any adjournment thereof) of the Company to be convened and held at 9:30 a.m. on 16 October 2017 (Monday) at 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou City, Henan Province, the PRC for the Shareholders to consider and approve, inter alia , the resolution regarding the proposed amendments to the Articles of Association

• “H Shareholders” holders of H Shares

• “H Shares”

overseas listed foreign ordinary shares with a nominal value of RMB1.00 each in the share capital of the Company, which are listed and traded on the Main Board of the Stock Exchange

• “Hong Kong”

Hong Kong Special Administrative Region of the PRC

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

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DEFINITIONS

“PRC”	the People’s Republic of China (excluding, for the
	purpose of this circular, Hong Kong, Macau Special
	Administrative Region of the People’s Republic of China
	and Taiwan)
“RMB”	the lawful currency of the PRC, Renminbi, the basic unit
	of which is “yuan”
“Share(s)”	ordinary share(s) with a nominal value of RMB1.00 each
	in the share capital of the Company, including A Shares
	and H Shares
“Shareholders”	the shareholders of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

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LETTER FROM THE BOARD

Central China Securities Co., Ltd.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “ 中原證券股份有限公司 ” and carrying on business in Hong Kong as “ 中州證券 ”)

(Stock Code: 01375)

Executive Director: Mr. JIAN Mingjun (Chairman)

Non-executive Directors: Mr. LI Xingjia Mr. WANG Lixin Mr. ZHANG Qiang Mr. ZHANG Xiaoqi Mr. YU Zeyang

Independent Non-executive Directors: Mr. YUAN Dejun Mr. YUEN Chi Wai Mr. NING Jincheng Mr. YU Xugang

Registered Address in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou City, Henan Province China

Headquarters/Principal Place of Business in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou City, Henan Province China

Principal Place of Business in Hong Kong: 18/F, Tesbury Centre 28 Queen’s Road East Wanchai, Hong Kong

28 September 2017

To the Shareholders,

Dear Sir/Madam,

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

INTRODUCTION

Reference is made to the Company’s announcement dated 24 August 2017 in relation to, among other things, the proposed amendments to the Articles of Association and the EGM notice issued on 31 August 2017.

The purpose of this circular is to provide you with details of the proposed amendments to the Articles of Association.

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LETTER FROM THE BOARD

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Pursuant to the relevant requirements of the Notice Regarding Amendments to the Articles of Association of Province-administered Enterprises (《關於省管企業公司章程修訂有 關事項的通知》) (Yu Qi Gai Ban [2017] No.11) and the Guidelines for the Articles of Association of Listed Companies issued by the CSRC, the Board proposed to, with reference to the Company’s actual situation, make the following amendments to the Articles of Association with a view to further improve the governance structure of the Company:

	**Existing **	Articles		Amended Articles		**Impact **	of the Amendments	of the Amendments	of the Amendments
				Add:		The Company establishes			the Party
						Committee	within	its	internal
				Article 2		structure.
				The Company shall establish the
				committee for the Communist Party
				of China of Central China Securities
				Co., Ltd (hereinafter referred to as the
				Party Committee) in accordance with
				the Constitution of the Communist
				Party of China. The Party Committee
				shall play the core leadership and
				core political role of providing
				direction, managing the overall
				situation and ensuring
				implementation. The Company shall
				also establish the working organs of
				the Party, which shall be equipped
				with sufficient staff to deal with Party
				affairs and provided with sufficient
				funds to operate the Party
				organization.

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LETTER FROM THE BOARD

		Existing Articles	Existing Articles	Existing Articles	Existing Articles	Existing Articles			Amended Articles		Impact of the Amendments
	Article 17								Article 18	(1)	Addition of the requirement that
											the establishment of subsidiaries
	Subject to		the	national laws				and	Subject to the requirements of		to conduct investment	in
	regulations		and	approval			by	the	national laws and regulations and		financial products other than
	securities	regulatory authorities,						the	approval by the securities regulatory		those stated in the List	of
	Company	can set up subsidiaries to							authorities, the Company can set up		Securities Investment Products
	conduct direct investment business.								subsidiaries to conduct direct		for the Proprietary Trading	of
									investment business.		Securities Companies by	the
	Pursuant		to	the		laws		and			Company shall be subject to	the
	administrative			regulations				and	Pursuant to the laws and		approval by the local branch	of
	relevant requirements of					the	CSRC,		administrative regulations and		the CSRC where the Company
	the Company can set up					subsidiaries			relevant requirements of the CSRC,		was registered; and
	to conduct		investment			in financial			the Company can set up subsidiaries
	products other than those					stated in		the	to conduct investment in financial	(2)	Addition of the right of	the
	List of		Securities			Investment			products other than those stated in the		Company to set up private fund
	Products	for	the	Proprietary			Trading		List of Securities Investment		subsidiaries to conduct private
	of Securities Companies.								Products for the Proprietary Trading		investment fund business upon
									of Securities Companies, and the		obtaining the approval from	the
									establishment shall be subject to the		local branch of the CSRC where
									approval by the local branch of the		the Company was registered.
									CSRC where the company was
									registered.
									Pursuant to the laws and
									administrative regulations and
									relevant requirements of the CSRC,
									the Company can set up private fund
									subsidiaries to conduct private
									investment fund business, and the
									establishment shall be subject to the
									approval by the local branch of the
									CSRC where the company was
									registered.

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LETTER FROM THE BOARD

	**Existing **	Articles	Articles	Amended Articles	**Impact **	of the Amendments	of the Amendments	of the Amendments
				A new Chapter V shall be added after	Specifications		of the requirements in
				Chapter IV of the Articles of	relation to the		members of the Party
				Association as follows:	Committee of		the Company and the
					establishment		of	organizational
				Chapter V Party Organization at	structure, the arrangement in respect
				the Primary Level	of decision-making			mechanism for
					resolutions,	and the leadership role of
				Article 150	the Party organizations.
				The Party Committee shall consist of
				one secretary and several other
				members as approved by the Party
				organization of higher levels.
				Typically, the secretary of the Party
				Committee and the chairman of the
				board of directors shall be assumed
				by the same person, and one deputy
				secretary shall be designated to focus
				on the Party building work of the
				Company. Eligible members of the
				Party Committee may take seats in
				the board of directors, the supervisory
				committee and the senior
				management through legal
				procedures, while eligible members
				of the board of directors, the
				supervisory committee and the senior
				management may take seats in the
				Party Committee in accordance with
				relevant requirements and
				procedures. Meanwhile, the Company
				shall establish the discipline
				inspection committee of Central
				China Securities Co., Ltd. for the
				Communist Party of China
				(hereinafter referred to as the
				“Discipline Committee”) in
				accordance with relevant
				requirements.
				Article 151
				The Party Committee shall establish
				the grassroots committee, the general
				branch committee and the branch
				committee of the Party at respective
				levels in accordance with the relevant
				requirements with a view to improve
				the party’s organization at primary
				level. The Company shall also
				conduct Party activities in accordance
				with the Constitution of the
				Communist Party of China and other
				relevant requirements.

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LETTER FROM THE BOARD

	**Existing **	Articles	Amended Articles	Impact of the Amendments
			Article 152
			The Party organizations of the
			Company shall play a core leadership
			and core political role with a focus on
			direction control, overall
			management and ensuring
			implementation. It shall ensure the
			Company remains on the right track
			of reform and development by staying
			focus on implementing the theories,
			directions and policies of the Party.
			The Party organizations shall also
			adhere to the principle of focusing its
			efforts on major businesses and key
			matters, strengthening collective
			leadership and promoting scientific
			decision-making with a view to
			facilitate the Company’s fulfilment of
			its economic, political and social
			responsibilities in all aspects. It shall
			also establish a strong team of
			management and staff by developing
			officials and talents for Party
			management so as to ensure the talent
			pool for the reform and development
			of the Company. With a focus on
			building a strong foundation through
			training of staff at entry level, the
			Company shall give full play to the
			role of the Party organizations as
			strongholds and the pioneer and
			exemplary role of the Party members,
			and lead the mass organizations by
			stepping up its efforts in ideological
			and political work so as to push ahead
			the implementation of various
			working tasks with concerted efforts.
			It shall also implement the principal
			responsibility and supervision
			responsibility system to reinforce the
			work in relation to the construction of
			the Party’s working style and its clean
			and honest administration as well as
			anti-corruption with a view to rectify
			working style and discipline and
			prevent risks at the same time.

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LETTER FROM THE BOARD

	**Existing **	Articles	Amended Articles	Impact of the Amendments
			Article 153
			The Company shall set up a decision-
			making mechanism for resolutions of
			the Party Committee, which defines
			the scope and procedures of decision-
			making and the participation in
			decision-making on material issues of
			the Party Committee. As a procedural
			prerequisite, major issues should be
			studied and discussed by the Party
			Committee before formulating a
			proposal and submitting the same to
			the board of directors and the senior
			management for decision. Major
			operational and administrative
			matters must be studied and discussed
			by the Party Committee before
			formulating and submitting a
			proposal to the board of directors or
			senior management for decision.
			Article 154
			The decision-making process for
			resolutions of the Party Committee
			shall adhere to the principle of
			collective leadership, democratic-
			centered, case-specific consultation
			and resolved by meeting. Major
			matters should be negotiated
			adequately and decisions should be
			made in a scientific and democratic
			manner according to laws.
			Article 155
			The organizational structure of the
			Party organizations of the Company
			and their staffing shall be
			incorporated into the administrative
			organs and the establishment of the
			Company. The Company shall include
			expenses of the Party organizations in
			the Company’s budget, which will be
			credited to the Company’s
			management fee.

As a result of the proposed new articles above, the numbering of the respective subsequent chapters and articles of the Articles of Association shall be adjusted accordingly.

The English version of the Articles of Association is an unofficial translation of the Chinese version. In the event of any inconsistency between the Chinese and English versions, the Chinese version shall prevail.

The proposed amendments to the Articles of Association are subject to the approval by the shareholders at the EGM by way of special resolution and the approval of the relevant government authorities of the PRC.

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LETTER FROM THE BOARD

EGM

The EGM of the Company will be held at 9:30 a.m. on 16 October 2017 (Monday) at 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou City, Henan Province, the PRC.

No Shareholder is required to abstain from voting in connection with the resolutions to be proposed at the EGM.

The proxy form for the EGM has been posted to you on 31 August 2017. Whether or not you are able to attend the EGM in person, you are requested to complete and return the applicable proxy form in accordance with the instructions printed thereon. In case of H Shareholders, the proxy form shall be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible; but in any event, not less than 24 hours before the time scheduled for holding the relevant meeting (or any adjournment thereof) or the time appointed for the taking of the poll. Completion and delivery of the proxy form will not preclude you from attending and voting in person at the relevant meeting or any adjournment thereof if you so desire.

VOTING

According to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by way of a poll. Therefore, the respective resolutions as stated in the notice of the EGM will be taken by way of a poll under the Article 124 of the Articles of Association.

During the poll, every Shareholder present in person or by proxy (or in case of Corporation, its duly authorised representative) at the EGM shall have one vote for each share registered in his/her name in the register of members. A Shareholder entitled to more than one vote needs not use all his/her votes or cast all the votes he/she uses in the same manner.

RECOMMENDATION

The Board considers that all resolutions to be proposed at the EGM are in the interests of the Company and the Shareholders as a whole. Therefore, the Board recommends the Shareholders to vote in favour of all resolutions to be proposed at the meetings.

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LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

Yours faithfully, On behalf of the Board Central China Securities Co., Ltd. JIAN Mingjun Chairman

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