Vala Inc. — Regulatory Filings 2021

Apr 29, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

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51 CREDIT CARD INC. 51 信用卡有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2051)

TERMINATION OF UNDERTAKINGS DUE TO PRC REGULATORY CHANGES

Reference is made to the section headed “CONTRACTUAL ARRANGEMENTS” of the Prospectus, in relation to, among other things, the Draft FIL published by the Ministry of Commerce in January 2015.

BACKGROUND

The Group and the Parties to the Voting Proxy Agreement

The Group is principally engaged in the operation of mobile applications and the provision of online information services. Since such businesses are subject to foreign investment restrictions under the law of the PRC, the Group entered into the Contractual Arrangements which allows the financial performance and economic benefits of the businesses of the PRC Operating Entities to be included in the financial information of the Company as if the Company is the parent company of Enniu Network. Details of the Contractual Arrangements have been disclosed in the section headed “CONTRACTUAL ARRANGEMENTS” of the Prospectus and of the annual reports of the Company.

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During the application of the Listing, the Company entered into the Voting Proxy Agreement with the Parties to the Voting Proxy Agreement on 26 June 2018, pursuant to which, Rising Sun Limited (a company ultimately controlled by Mr. Sun) is entitled to exercise, in its sole discretion, all the voting powers associated with the Shares under the Voting Proxy Agreement on behalf of the Parties to the Voting Proxy Agreement on all matters submitted to a vote of Shareholders at any meeting of Shareholders.

Rising Sun Limited is wholly owned by Wukong Ltd. which is beneficially owned by Wukong Trust. Mr. Sun is the settlor and the beneficiary of Wukong Trust as well as the sole director of Rising Sun Limited. Accordingly, by virtue of the Voting Proxy Agreement and a limited partnership agreement, Mr. Sun (as the settlor of Wukong Trust), Wukong Ltd. and Rising Sun Limited are the Controlling Shareholders. Mr. Sun is a natural person of Chinese nationality.

The Draft FIL (as it then was)

In January 2015, the Ministry of Commerce published the Draft FIL aiming to, upon its potential enactment, replace the major existing laws and regulations governing foreign investment in the PRC. The Draft FIL, among other things, purported to introduce the principle of “actual control” in determining whether a company is considered a foreign invested enterprise or a foreign invested entity.

The Draft FIL specifically provided that entities established in the PRC but “controlled” by foreign investors will be treated as foreign invested enterprises, whereas an entity organized in a foreign jurisdiction but cleared by the authority in charge of foreign investment as “controlled” by PRC entities and/or citizens, would nonetheless be treated as a PRC domestic entity for investment in the “restricted category” on the “negative list” to be issued, subject to the examination of the relevant authority in charge of foreign investment.

The Draft FIL defined “actual control” as the power or position to control an enterprise through investment arrangements, structured contracts or other rights and decision-making arrangements. Further background of the relevant provisions of the Draft FIL are set out — in the section headed “CONTRACTUAL ARRANGEMENTS Development in the PRC — Legislation on Foreign Investment Draft new Foreign Investment Law” in the Prospectus.

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The Undertakings

During the time of the Company’s application for the Listing, the Company was advised by its PRC legal advisors that if the provisions of the Draft FIL became effective in its draft form and content, the Contractual Arrangements may be recognized as domestic investments.

To ensure the Contractual Arrangements are likely to continue to be in compliance with applicable PRC laws and the Stock Exchange requirements so that the Group can maintain control over the PRC Operating Entities and receive all economic benefits derived from them, each of the Parties to the Voting Proxy Agreement undertook to the Company that during the term of the Voting Proxy Agreement and so long as the Contractual Arrangements are in force, it shall use its best efforts to do and procure the Company and Rising Sun Limited to do all such possible acts that are necessary to give effect to the Contractual Arrangements and/or enable the continuation of business operations of the PRC Operating Entities as a result of any impact due to the promulgation and implementation of the new Foreign Investment Law and other future laws and regulations relating to foreign investment, and in particular the following:

• (a) not terminating the Voting Proxy Agreement without the prior written consent of the Company;

• (b) in the case of Mr. Sun, maintaining his Chinese nationality; and

• (c) in the event of any transfer or disposal by any of them of a shareholding that may result in the transferee(s) acquiring “control” over the Company (as defined in the Draft FIL or the new Foreign Investment Law (as enacted), as the case may be), it will (as may be relevant) (i) procure that the transferee(s) provide an undertaking on substantially the same terms and conditions as the one provided by itself; and (ii) demonstrate to the reasonable satisfaction of the Company and the Stock Exchange that the Contractual Arrangements will continue to be viewed as a domestic investment under the Draft FIL or the new Foreign Investment Law (as enacted), as the case may be.

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The Undertakings shall remain effective until the earlier of the occurrence of the following events:

• (a) Mr. Sun ceasing to be a Controlling Shareholder and actual controller of Enniu Network or the Company;

• (b) compliance with the relevant requirements under the new Foreign Investment Law or applicable foreign investment laws (together with, if any, all subsequent amendments or updates, as promulgated) as finally enacted is not required and the Stock Exchange has consented to this;

• (c) compliance with the Undertakings is no longer required, as advised by the Stock Exchange; or

• (d) the Stock Exchange and any applicable PRC regulatory departments have consented to such termination.

Further details and background relating to the Undertakings are set out in pages 220 to 221 of the Prospectus.

TERMINATION OF UNDERTAKINGS

The Undertakings provided that they shall remain effective until compliance with the relevant requirements under the new Foreign Investment Law or applicable foreign investment laws (together with, if any, all subsequent amendments or updates, as promulgated) as finally enacted is not required and the Stock Exchange has consented to this.

On 15 March 2019, the National People’s Congress of the PRC passed the Foreign Investment Law, which came into effect on 1 January 2020.

The Company has sought PRC legal advice in respect of the Foreign Investment Law. The PRC legal advisors of the Company is of the opinion that the Draft FIL did intend to regulate VIE Structures and expressly provided concepts such as “control” and “actual control”. However, the Foreign Investment Law, effective from 1 January 2020, did not adopt such requirements. The PRC legal advisor is also of the opinion that the Foreign Investment Law does not expressly regulate VIE Structures.

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Furthermore, the PRC legal advisor is of the opinion that there are currently no applicable laws and regulations in the PRC that expressly require foreign companies operating under VIE Structures to be controlled by the PRC investors; therefore, subject to the Stock Exchange’s consent, the Undertakings can be terminated.

The PRC legal advisor further advised that as the Undertakings are not part of the Contractual Arrangements, the termination of the Undertakings shall not affect the legality and validity of, and the confirmed operation of the Contractual Arrangements and the Contractual Arrangements are still legally binding on the contracting parties under the present PRC laws, regulations and rules.

In view of the above, the Company has sought consent from the Stock Exchange that the Undertakings is to be terminated. The Company is pleased to confirm that the Stock Exchange gave such written consent on 22 April 2021. Accordingly, on 29 April 2021, the Undertakings as incorporated in the Voting Proxy Agreement was terminated.

The Board confirms that it does not foresee any material adverse impact on the Group’s businesses and operations arising from the termination of the Undertakings.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions have the meanings ascribed to them below:

“Board” the board of Directors

“Chairman” the chairman of the Board “Company” 51 Credit Card Inc., a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the Stock Exchange

“Contractual collectively, the Exclusive Business Cooperation Agreement, Arrangements” the Exclusive Option Agreement, the Powers of Attorney and the Share Pledge Agreement, details of which are set out in the section headed “CONTRACTUAL ARRANGEMENTS” of the Prospectus

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• “Controlling Shareholders” has the meaning as described under the Listing Rules

• “Director(s)”

the director(s) of the Company

• “Draft FIL”

the Foreign Investment Law of the PRC (Draft for Comments)*（《中華人民共和國外國投資法（草案徵求 意見稿）》）proposed by the Ministry of Commerce on 19 January 2015

• “Enniu Network”

  • Hangzhou Enniu Network Technology Co., Ltd.*（杭州 恩牛網絡技術有限公司）, a company incorporated in the PRC on 2 August 2012, and a PRC Operating Entity of the Company

• “Foreign Investment Law”

  • the Foreign Investment Law of the PRC*（《中華人民共和國 外商投資法》）, as passed by the National People’s Congress of the PRC on 15 March 2019, which became effective on 1 January 2020

• “Group”

• the Company, its subsidiaries and the PRC Operating Entities (the financial results of which have been consolidated and accounted for as subsidiaries of the Company by virtue of the Contractual Arrangement) from time to time

“Hong Kong”

the Hong Kong Special Administrative Region of the PRC

“Listing”

the listing of the Shares on the Main Board of the Stock Exchange on 13 July 2018

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“Listing Rules”

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time “Ministry of Commerce” the Ministry of Commerce （商務部） of the PRC “Mr. Sun” Mr. Sun Haitao（孫海濤）, the founder of the Company, Chairman and executive Director, and one of the Controlling Shareholders “PRC” the People’s Republic of China “PRC Operating Entities” Enniu Network and its subsidiaries, the financial results of which have been consolidated and accounted for as if they were subsidiaries of the Company by virtue of the Contractual Arrangements

“Prospectus” the prospectus of the Company dated 29 June 2018 “Share(s)” ordinary share(s) of US$0.00001 each in the capital of the Company “Shareholder(s)” the shareholder(s) of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Undertakings” the undertakings given by the Parties to the Voting Proxy Agreement to the Company under the Voting Proxy Agreement, details of which are set out in the subsection headed “The Undertakings” of the section headed “BACKGROUND” in this announcement “VIE Structures” variable interest entity structures

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“Voting Proxy Agreement”

the voting proxy agreement dated 26 June 2018 entered into between the Company, Rising Sun Limited, 51 Stock Limited, 51 Award Limited, Tiantu Investments Limited, Action Chain International Limited, MSK XF Holding Ltd, LF Alpha Ltd and Achieve Success Technology Development Limited (other than the Company, each, a “Party to the Voting Proxy Agreement”, collectively, the “Parties to the Voting Proxy Agreement”)

“%”

per cent.

• For identification and translation purpose only.

By order of the Board 51 Credit Card Inc.

Sun Haitao

Chairman and Executive Director

29 April 2021

As at the date of this announcement, the executive Directors are Mr. Sun Haitao, Mr. Zheng Haiguo and Mr. Zhao Ke; the non-executive Directors are Ms. Zou Yunli and Mr. Yu Jin; and the independent non-executive Directors are Mr. Wong Ti, Mr. Ye Xiang and Mr. Xu Xuchu.

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