Articles of association of asset management corporation
The articles of association were formulated in accordance with the Company Law of the People's Republic of China and other concerned laws and regulations with the objective of regulated management and controlling activities of China Huarong Asset Management Corporation.
CHAPTER 1, GENERAL PROVISIONS
Article one: The name of the company is China Huarong Asset Management Corporation (abbreviated as CHAMC).
Article two: The address of the company is No. 10, Baiyun Road, Xicheng District, Beijing, China.
Article three: As a solely state-funded financial enterprise, CHAMC is endowed with the qualification of a legal person and shall be independently responsible for civil liability. CHAMC's main businesses include purchase, administration, disposition and recovery of the non-performing assets peeled off from Industrial and Commercial Bank of China (hereinafter referred to as ICBC) and CHAMC is expected to minimize the asset losses involved to the greatest extent.
Article four: CHAMC's registered capital amounts to RMB10 billion.
Article five: CHAMC's sources of operational fund include registered capital, operational capital from financial appropriation, commercial loans, borrowing from other financial institutions, refinancing from the People's Bank of China and operational proceeds.
Article six: CHAMC shall minimize the losses involved to the greatest extent by utilizing its special legal status and expertise advantages.
Article seven: CHAMC's financial activities shall be subject to the supervision of the People's Bank of China and the Ministry of Finance of P.R.C. while its securities business to the supervision of China Securities and Exchange Supervision Commission.
CHAPTER 2, SCOPE OF BUSINESS
Article eight: CHAMC shall engage in and handle the following lines of businesses:
1. Purchase and administration of the non-performing assets peeled off from ICBC;
2. Loan reclamation, asset exchange, transference and sale;
3. Debt and enterprise restructuring;
4. Debt-to-equity swap, periodic share holding and asset securitization;
5. Listing recommendation, bond and share issuance relating to the assets under
CHAMC's management;
6. Direct investment;
7. Bond issuance and commercial borrowing;
8. Borrowing from other financial institutions and refinancing from the People's Bank
of China;
9. Consultation in investment, financial and legal affairs;
10. Asset and project evaluation;
11. Enterprise auditing and liquidation;
12. Other businesses approved by the financial supervisory authorities.
Article nine: CHAMC, in accordance with the state's concerned regulations, shall endeavor to maximize the asset recovery and minimize the losses involved by way of selling its creditor's rights and share ownership to overseas investors.
Article ten: The scope of CHAMC's purchased non-performing assets shall be defined in accordance with the concerned regulations in the Notice of the People's Bank of China, the Ministry of Finance and China Securities and Exchange Supervision Commission on the Establishment of China Huarong Asset Management Corporation, China Great Wall Asset Management Corporation and China Oriental Asset Management Corporation, Issued by the General Office of the State Council (Guobanfa No. 66,1999). ICBC shall sponsor the evaluation and examination of the non-performing assets to peel off by inviting experts and intermediaries and submit the concerned results to the Ministry of Finance for its approval.
Article eleven: As for the non-performing assets purchased by CHAMC from ICBC, the obligors involved shall be in debt to CHAMC rather than ICBC. While CHAMC takes over and exercises the concerned creditor's rights peeled from ICBC, CHAMC shall go through the related procedures according to the laws. Meanwhile, CHAMC is authorized to conduct a restructuring reform of the non-performing assets in accordance with the concerned laws and regulations and these articles of association.
CHAPTER 3, FINANCIAL CONTRIBUTORS' RIGHTS AND OBLIGATIONS
Article twelve: Financial contributor's name: The Ministry of Finance of P.R.C.. Financial contribution's amount and form: RMB10 billion of financial appropriation.
Article thirteen: The financial contributor enjoys the following rights:
1. Examination and revision of CHAMC's articles of association;
2. Examination and approval of the report from the Board of Supervisors;
3. Decision making over the increase or decrease of the registered capital;
4. Decision making over such issues of significance as CHAMC's acquisition,
transformation, disintegration, securitization and dissolution.
5. Examination of CHAMC's operational and financial situation by way of checking
CHAMC's financial and accounting report;
6. Other rights which a financial contributor shall enjoy according to the stipulation
of concerned laws and regulations.
Article fourteen: The financial contributor shall shoulder the following obligations:
1. To abide by CHAMC's articles of association;
2. To pay exactly the amount as stipulated;
3. To refrain from violating CHAMC's interests;
4. Other obligations which a financial contributor shall shoulder according to
the stipulations of concerned laws and regulations.
CHAPTER 4, CHAMC'S PRESIDENCY
Article fifteen: CHAMC shall have one president and several executive vice-presidents. The president shall be the legal representative of CHAMC in charge of the daily management and control of CHAMC. When the president is unable to exercise his management, one vice-president shall be designated to carry out his responsibilities. CHAMC's president and vice-presidents shall be recommended by CHAMC's Board of Supervisors and appointed by the State Council following the qualification examination of the People's Bank of China. Whoever has violated Article 57 of the Company Law shall be unable to be appointed as CHAMC's president.
Article sixteen: The president shall exercise the following responsibilities:
1. To preside CHAMC's management and control;
2. To formulate and carry out CHAMC's management policies, development
plan and annual management plan;
3. To formulate CHAMC's internal management structure;
4. To formulate CHAMC's rules and regulations of significance;
5. To formulate CHAMC's financial budget and final account scheme of the
year;
6. To formulate CHAMC's scheme concerning staff's salary level, rewards and
punishments;
7. To engage and dismiss CHAMC's management staff except those
appointed by the State Council;
8. To conduct foreign business relations as the legal representative of
CHAMC within the scope approved by the supervisory authorities;
9. Other responsibilities endowed by the State Council and the concerned
laws and regulations.
Article seventeen: The president shall fulfill the following obligations:
1. To comply CHAMC's articles of association, to faithfully carry out his
responsibilities, to safeguard CHAMC's interests as the highest standard of
conduction, not to utilize his position and power to private advantages, not
to engage in any activities outside CHAMC which shall compete with
CHAMC or violate CHAMC's interests;
2. To carry out his responsibilities prudently, carefully and diligently;
3. Not to take bribes or other illegal income by the utilization of his position,
not to embezzle any property of CHAMC;
4. Not to embezzle CHAMC's capital or lend CHAMC's capital to anyone
else, not to provide loan guarantee for anyone else by way of CHAMC's
capital;
5. Not to set up accounts of CHAMC's capital in the name of himself or
anyone else;
6. Not to join the leading group of any other limited company or other
operational organizations;
7. To observe the prohibitive stipulations of the concerned laws and
regulations.
CHAPTER 5, BOARD OF SUPERVISORS
Article nineteen: CHAMC shall incorporate the Board of Supervisors, which shall supervise CHAMC's management and control and make regular report to the financial contributor and the concerned governmental offices.
Article twenty: The Board of Supervisors shall consist of eleven members with one chairman, including the representatives from the Ministry of Finance, the People's Bank of China, the National Auditing Office, Industrial and Commercial Bank of China, China Securities and Exchange Supervision Commission, outside experts, CHAMC's management level and its working staff. The chairman shall come from the Ministry of Finance and the vice-chairmen from the People's Bank of China and Industrial and Commercial Bank of China. All of them shall be appointed by the State Council. The representatives from the Ministry of Finance, the People's Bank of China, China Securities and Exchange Supervision Commission, the National Auditing Office, Industrial and Commercial Bank of China shall be designated and changed by the designating organizations. The representatives from CHAMC's working staff shall be elected and changed by all of its working staff. The representatives from the outside experts shall be recommended and approved by the Board of Supervisors and appointed or removed by the chairman of the Board.
Article twenty-first: The tenure of the supervisors shall be three years and the supervisors shall be able to be reelected or reappointed. CHAMC's president and financial manager shall not be elected as the supervisors. Whoever comes under the situation stipulated by the 57th provision of the Company Law shall not be elected or appointed as the supervisors.
Article twenty-two: The Board of Directors shall hold meetings once half a year. With the suggestion of the chairman of the Board or over 1/3 of the supervisors, impromptu meeting shall be held. The decision of the Board shall be invalid without the presence of over 2/3 of the supervisors and the consent of half of the supervisors present.
Article twenty-three: The Board of Supervisors shall carry out the following duties (during the absence of the Board of Directors):
1. To examine CHAMC's strategic decisions;
2. To give suggestions concerning CHAMC's articles of association;
3. To examine CHAMC's management policies, development scheme and
annual operational plan;
4. To examine CHAMC's financial statement;
5. To supervise and assess the managing performance of CHAMC's president
and give their suggestions concerning the rewards or removes of the
president of CHAMC;
6. To supervise the violation of laws, regulations or CHAMC's articles of
association by the president or the vice-presidents in their execution of
duties;
7. To initiate the meetings of high-level managing personnel and make
decisions over the significant issues in CHAMC's management and control;
8. To carry out other duties stipulated by concerned laws and regulations.
Article twenty-four: The supervisors shall abide by the following stipulations:
1. The supervisors shall faithfully carry out their duties and safeguard the interests
of CHAMC and be prohibited to utilize their position and power at CHAMC to
private advantages;
2. The supervisors shall not accept brides or other illegal incomes, or embezzle
the properties of CHAMC by way of their position;
3. The supervisors shall not release the secrets of CHAMC except with the
permission of laws and regulations;
4. The supervisors shall not violate other prohibitive stipulations of laws and
regulations.
CHAPTER 6, CHAMC'S MANAGEMENT AND CONTROLLING STRUCTURE
Article twenty-five: With the permission of the Ministry of Finance, CHAMC is authorized by the People's Bank of China to establish agencies in the regions with large business volume and concentrated location of non-performing assets in view of CHAMC's business development. Without the qualification of an independent person, these agencies shall conduct their businesses in accordance with the authorization of CHAMC. CHAMC entrusts ICBC with the daily management of the non-performing loans.
Article twenty-six: CHAMC shall be in Beijing and establish a series of executive divisions in accordance with the principle of "efficiency and effectiveness". Article twenty-seven: CHAMC shall be endowed with the functions of an investment bank in the design of its organizational structures.
CHAPTER 7, THE FINANCIAL, ACCOUNTING, PROFIT-ALLOCATION AND EMPLOYMENT SYSTEM
Article twenty-eight: CHAMC shall set up its own financial and accounting system in accordance with laws, regulations and the concerned rules of the Ministry of Finance; CHAMC shall make the annual accounting report at the end of each accounting year. Article twenty-nine: CHAMC shall conduct its profit allocation in accordance with the Company Law, other laws and regulations and the concerned rules of the Ministry of Finance.
Article thirty: As to all of CHAMC's working staff, including those from ICBC and those recruited publicly, CHAMC shall implement a contract system and initiate the concerned mechanism of control and incentive in accordance with the market situation.
CHAPTER 8, CHAMC'S DISSOLUTION & LIQUIDATION
Article thirty-one: With the approval of the Ministry of Finance, CHAMC shall be authorized by the People's Bank of China to dissolve under the following situations:
1. CHAMC's period of existence shall expire;
2. The financial contributor shall make the decision that CHAMC be dissolved;
3. CHAMC shall dissolve in view of its needs of acquisition, disintegration and
securitization;
4. CHAMC shall be ordered to dissolve for its violation of the concerned laws and
regulations;
5. CHAMC shall not continue its operation for some insurmountable causes.
Article thirty-two: When CHAMC dissolves, CHAMC shall be liquidated by the liquidation group in accordance with the Company Law and other concerned laws and regulations. After the liquidation, the liquidation report shall be confirmed by the concerned authorities and submitted to the registration authorities to terminate the existence of CHAMC.
CHAPTER 9, OTHER PROVISIONS
Article thirty-three: For the time being, CHAMC is expected to exist for ten years. If necessary, CHAMC shall be able to terminate ahead or extend its existence with the approval of the Ministry of Finance and the authorization of the People's Bank of China.
Article thirty-four: CHAMC shall be able to modify its articles of association when necessary or in accordance with the changes in its registration issues. However, subject to the approval of China Securities and Exchange Supervision Commission, the newly modified articles of association shall not be in violation of the concerned laws and regulations. The modified articles of association shall be documented at the registration authorities, which should be notified of the modified issues therein.
Article thirty-five: Whenever divergence emerges, the registration items at the registration authorities shall prevail.
Article thirty-six: These articles of association shall come into effect on the day of their approval by CHAMC.
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