According to Zhitong Finance App, Narnia Group (08607) issued an announcement regarding the sale of approximately 1.07% of the issued share capital of Zhejiang Changxing Rural Commercial Bank Co., Ltd. On March 28, 2024, Changxing Rural Commercial Bank sent a letter to the seller (an indirect wholly-owned subsidiary of the company), informing (among others) that the buyer was not eligible to register as a shareholder of Changxing Rural Commercial Bank due to the relevant rules and regulations of the China Financial Supervision and Administration. Therefore, on the date of this announcement, although the buyer paid all of the costs to the seller before August 2023, the seller is still a registered shareholder of Changxing Rural Commercial Bank and holds 7.565,800 shares in Changxing Rural Commercial Bank.

According to the company's Chinese legal adviser, according to the Interim Measures on the Equity Management of Commercial Banks, commercial banks must step up the examination of shareholders' qualifications and fulfill their reporting responsibilities relating to shareholders' qualifications. Changxing Rural Commercial Banks must comply with the regulatory requirements that microfinance companies are not eligible to hold shares. As a result, the buyer, as a microfinance company, was not eligible to become a shareholder of Changxing Rural Commercial Bank. The board of directors announced that after managerial discussions and careful consideration of all matters relating to the sale of shares, the seller and buyer decided not to carry out the share sale. On April 3, 2024 (after the end of the trading period), the seller and the buyer entered into a supplementary agreement to the share transfer agreement, according to which (among others)

(i) The seller agreed to fully refund the buyer the price of RMB 21.5 million and pay compensation of approximately RMB 470,000. The compensation was determined through joint negotiations between the seller and the buyer based on the buyer's (state-owned capital participating company)'s understanding of the regulatory requirements for preserving and adding value to state-owned assets, and considering that the buyer's largest shareholder is a state-owned capital holding company. As notified by the company's Chinese legal adviser, the compensation complies with the relevant provisions under the “Enterprise State-owned Assets Law”;

(ii) The buyer agreed to refund to the seller all dividend payments of approximately RMB 1 million for the year ended 31 December 2022 from Changxing Rural Commercial Bank; and

(iii) The buyer agreed that the seller could keep all of the proposed dividend payments received from Changxing Rural Commercial Bank for the year ended 31 December 2023.

The Board of Directors believes that the termination of the sale of shares will not have any significant adverse impact on the company's business operations and financial situation.

Trading of the company's shares continues to be suspended.