ST Thermal Power and its controlling shareholder were filed for alleged violations of laws and regulations, and the major asset restructuring including PBAT has been terminated.

On May 24, ST Thermal Power announced that recently, the company and its controlling shareholder Dalian Thermal Power Group Co.
, Ltd.
respectively received the "Notice of Filing a Case" issued by the China Securities Regulatory Commission.
"Securities Law of the People's Republic of China" and "Administrative Punishment Law of the People's Republic of China" and other laws and regulations, the China Securities Regulatory Commission has decided to file a case against the company and its controlling shareholder
.

Before that, on the evening of April 28, ST Thermoelectricity disclosed its 2021 annual report
.
In view of the capital occupation of Dalian Thermal Power Group, ST Thermal Power's 2021 internal control audit agency Zhongshen Zhonghuan Certified Public Accountants (special general partnership) issued an audit report with a negative opinion on the company's 2021 internal control
.
This matter constitutes the situation stipulated in Article 9.
8.
1 (3) of the "Shanghai Stock Exchange Listing Rules", and ST Thermal Power has been issued other risk warnings by the Shanghai Stock Exchange
.

On May 19, Dalian Securities Regulatory Bureau decided to order ST Thermoelectricity and related responsible persons and controlling shareholders to take corrective measures
.
In addition, in view of the fact that ST Thermal Power's controlling shareholder has occupied the company's funds for non-operational purposes and damaged the company's independence, the Shanghai Stock Exchange immediately criticized ST Thermal Power, Dalian Thermal Power Group Co.
, Ltd.
and relevant responsible persons
.

Accompanying it, the major asset reorganization of ST Thermoelectricity, which was highly expected by the outside world, also came to an end
.

On April 14, 2022, ST Thermoelectric and Dalian Thermal Power Group Co.
, Ltd.
, Hengli Petrochemical, and Hengli Chemical Fiber signed the "Significant Assets Restructuring Intention Agreement"
.
It is agreed that the company intends to carry out major asset restructuring, including the company's placement of all assets and liabilities to Dalian Thermal Power Group Co.
, Ltd.
and its designated entities, and the purchase of 100 Kanghui New Materials held by Hengli Petrochemical and Hengli Chemical Fiber through the issuance of shares.
% of the equity
.

From the perspective of the share capital structure of Kanghui New Materials, Hengli Petrochemical and Hengli Chemical Fiber hold 59.
51% and 40.
49% of the shares respectively
.
Hengli Petrochemical is the controlling shareholder of Kanghui New Materials, and Hengli Petrochemical holds a total of 100% equity of Hengli Chemical Fiber
.

Kanghui New Materials has an annual production capacity of 240,000 tons of PBT engineering plastics in Yingkou base.
It is the largest PBT manufacturer in China, mainly used in auto parts, polymer alloys, optical cable protective sleeves, electronic appliances and other industrial fields; with an annual output of 385,000 tons ton of BOPET functional film production capacity, applied to BOPET optical equipment, release protection, electronic appliances, automotive decoration, construction, packaging and other high value-added links; has the largest annual output of 33,000 tons of a single set based on independent technology in China PBAT production capacity is used in green and environmental protection applications such as food-grade shopping bags, tableware and straws of PBS/PBAT
.

According to ST Thermoelectric's announcement on the evening of April 28, after the company's self-examination, the company's funds were occupied by the controlling shareholder in 2021.
Zhongshen Zhonghuan Certified Public Accountants (special general partnership) issued a negative internal control audit report, although the controlling shareholder All principal and interest have been repaid, and the company is taking active and effective measures to make rectifications.
However, in view of the aforementioned circumstances that may lead to certain uncertainties in this transaction, the company and all parties have carefully studied and decided to terminate the major asset restructuring
.