Xinjiang La Chapelle Fashion : UPDATE ANNOUNCEMENT ON THE PROGRESS OF THE JUDICIAL AUCTION OF THE A SHARES HELD BY THE CONCERT PARTY OF SUBSTANTIAL SHAREHOLDER

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新 疆 拉 夏 貝 爾 服 飾 股 份 有 限 公 司

Xinjiang La Chapelle Fashion Co., Ltd.

(formerly known as "Shanghai La Chapelle Fashion Co., Ltd. （上海拉夏貝爾服飾股份有限公司）")

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 06116)

UPDATE ANNOUNCEMENT ON THE PROGRESS OF THE JUDICIAL AUCTION

OF THE A SHARES HELD BY THE CONCERT PARTY OF SUBSTANTIAL

SHAREHOLDER

This announcement is made by Xinjiang La Chapelle Fashion Co., Ltd. (the "Company") pursuant to Rule 13.09(2) and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the announcements of the Company dated 12 July 2020, 16 July 2020, 17 August 2020, 24 September 2020, 10 November 2020, 31 January 2021, 1 March 2021, 7 March 2021, 22 March 2021, 23 March 2021, 25 March 2021, 28 March 2021 and 16 April 2021 in relation to (a) the A shares of the Company (the "A Shares") held by (i) Mr. Xing Jiaxing ("Mr. Xing"), the de facto controller and the then controlling shareholder of the Company and (ii) Shanghai Hexia Investment Co., Ltd. ("Shanghai Hexia"), the party acting in concert with Mr. Xing, being subject to a subordinated freezing

order, (b) the receipt by the Company of a notice of forced auction in respect of the A Shares held by Mr. Xing from the Shanghai Financial Court* (上海金融法院) (the "Shanghai Financial Court"), (c)

the successful auction on 5 March 2021 by the Shanghai Financial Court of the A Shares held by Mr. Xing on the judicial assistance execution platform (the "Judicial Execution Platform") of the Shanghai Stock Exchange ("SSE"), (d) the receipt of execution rulings from Shanghai Wensheng and Shanghai Qijin in respect of 61,600,000 of the A Shares bid by them, (e) the receipt of another execution ruling from Mr. Xing in respect of 80,000,000 of the A Shares bid by three other successful bidders who failed to complete their corresponding transaction, (f) the completion of transfers in respect of 61,600,000 of the A Shares, (g) the successful auction (the "Auction") on 26 March 2021 by the Shanghai Financial Court of the A Shares held by Shanghai Hexia on the Judicial Execution Platform, (h) the receipt by the Company of a notice of forced auction in respect of the 80,000,000 A Shares held by Mr. Xing from the Shanghai Financial Court, and (i) the successful auction on 16 April 2021 by the Shanghai Financial Court of the 80,000,000 A Shares held by Mr. Xing on the Judicial Execution Platform (the "Announcements"). Unless otherwise defined, capitalised terms used herein shall have the same meanings as those defined in the Announcements.

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1. RECEIPT OF EXECUTION RULING
   On 21 April 2021, the Company received the execution ruling No. (2020) Hu 74 Zhi 216 No. 2* ((2020）滬74執216號之二《執行裁定書》) (the "Execution Ruling") from Shanghai Qijin, the successful bidder of the Auction, and learned that the Shanghai Financial Court had handed down a ruling on the Auction in respect of the 45,200,000 A Shares held by Shanghai Hexia.

1. BACKGROUND
   As disclosed in the announcement of the Company dated 1 March 2021 in relation to the receipt of a notice of forced auction of the 45,200,000 A shares held by Shanghai Hexia, since Shanghai Hexia, the party acting in concert with Mr. Xing, did not perform certain obligations under the Notarised Documents of Creditor's Rights arising from share pledge repurchase transactions in relation to the A Shares held by Shanghai Hexia, the Shanghai Financial Court auctioned the 45,200,000 A Shares (all being restricted shares) on the Judicial Execution Platform on 26 March 2021, representing 8.25% of the total issued share capital of the Company. According to the auction results displayed on the Judicial Execution Platform, all of the 45,200,000 A Shares were successfully bid.

1. THE MAIN CONTENTS OF THE EXECUTION RULING The Execution Ruling provides that:
   "1. The 45,200,000 A Shares of the Company (stock code: 603157, stock category: restricted shares) held by Shanghai Hexia, being the subject of enforcement, shall belong to Shanghai Qijin, and the ownership of such A Shares shall be transferred to Shanghai Qijin upon service of this ruling on Shanghai Qijin.
2. 1. 15,000,000 of the A Shares held by Shanghai Hexia shall be transferred to Shanghai Qijin (stock account number: B8838***54).
   2. 15,000,000 of the A Shares held by Shanghai Hexia shall be transferred to Shanghai Qijin (stock account number: B8838***09).
   3. 15,200,000 of the A Shares held by Shanghai Hexia shall be transferred to Shanghai Qijin (stock account number: B8838***93).
   4. The judicial freezing order and the pledge in respect of the above-mentioned A Shares shall be lifted, and all subordinated freezing orders shall become invalid automatically.

This ruling shall have legal effect upon service."

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IV. CONSEQUENCES AND SUBSEQUENT MATTERS INVOLVED

1. After the change in shareholding:
2. 1. Shanghai Wensheng holds 21,600,000 A Shares, representing 3.94% of the total issued share capital of the Company.
   2. Shanghai Qijin holds 85,200,000 A Shares, representing 15.56% of the total issued share capital of the Company.
   3. As disclosed in the announcement of the Company dated 7 March 2021, Shanghai Wensheng indirectly holds 100% of Shanghai Qijin; therefore, Shanghai Wensheng and Shanghai Qijin collectively hold 106,800,000 A Shares, representing 19.50% of the total issued share capital of the Company. As a result, Shanghai Wensheng and its concert party, Shanghai Qijin, have collectively become the largest substantial shareholders of the Company;
   4. Mr. Xing and Shanghai Hexia collectively hold 80,278,815 A Shares, representing 14.66% of the total issued share capital of the Company. As a result, Mr. Xing and its concert party, Shanghai Hexia, have collectively become the second largest substantial shareholders of the Company, Mr. Xing is no longer a de facto controller of the Company under the SSE Listing Rules, and Shanghai Hexia is no longer a substantial shareholder of the Company; and
   5. there is no single shareholder of the Company or a group of shareholders of the Company who holds more than 50% of the Company's shares or is entitled to exercise or control the exercise of 30% or more of the voting rights at the general meetings of the Company or who is in a position to control the composition of a majority of the board of directors of the Company. If this situation continues, the Company will not have a controlling shareholder (as defined under the Listing Rules) or a de facto controller (as defined under the SSE Listing Rules).
3. The share disposal process will still involve the completion of share transfers through registration. The Company will proactively urge all relevant persons who are under disclosure obligations to prepare the required documents as soon as possible in accordance with the relevant laws and regulations and file the same within three business days from the date on which they received the Execution Ruling.

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1. IMPACT ON THE COMPANY AND RISK WARNINGS
2. 1. On 16 April 2021, the Shanghai Financial Court successfully auctioned the 80,000,000 A Shares held by Mr. Xing on the Judicial Execution Platform. According to the bidding results, Haitong
      Securities Asset Management No. 1 FOF Single Asset Management Plan, which belongs to the Series Supporting Private Enterprises on behalf of the Securities Industry* (證券行業支持民企 系列) and which is managed by Haitong Securities Asset Management Co., Ltd.* (上海海通證 券資產管理有限公司), successfully bid all of the 80,000,000 A Shares. If the auction of all of the 80,000,000 A Shares is completed, Mr. Xing will cease to be a substantial shareholder of the Company. This share disposal process will still involve various aspects such as the payment of the difference between the relevant transaction price and the deposit, the court's issuance of execution rulings, and completion of share transfers through registration. Therefore, the final results of this action remain uncertain.
   2. The Auction will not affect the normal production and operation of the Company, will not adversely affect the Company's principal business and its ability to continue as a going concern, and will not render the Company's shareholding distribution unqualified for listing under the SSE Listing Rules.
   3. The share disposal process will still involve the completion of share transfers through registration. The Company will closely monitor the subsequent progress of this Auction, and perform its information disclosure obligations in a timely manner in accordance with relevant rules and regulations.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By Order of the Board

Xinjiang La Chapelle Fashion Co., Ltd.

Mr. Wu Jinying

Chairman

Shanghai, the People's Republic of China

21 April 2021

As of the date of this announcement, the executive directors of the Company are Mr. Wu Jinying, Ms. Zhang Ying and Ms. Zhang Danling; the non-executive director of the Company is Mr. Yin Xinzai; the independent non-executive directors of the Company are Mr. Xing Jiangze, Ms. Wong Sze Wing and Mr. Zhu Xiaozhe.

• For identification purposes only

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