Hanhua Financial : Overseas Regulatory Announcement and Supplemental Announceme...

Hanhua Financial Holding Co., Ltd.

Announcement in respect of warning letter received by former non-executive director

and major shareholder

All directors of the Company or officer with equivalent responsibilites warrant that there is no false and misleading statement or material omission herein, and are responsible for the truthfulness, accuracy and completeness of the contents herein.

1. General information on warning letter received by the Company's former non-executive director

Hanhua Financial Holding Co., Ltd. (the "Company") was recently informed that, the Shanghai Regulatory Bureau of the China Securities Regulatory Commission (the "Shanghai Securities Regulatory Bureau") implemented an administrative supervision measure of issuing warning letter to Duan Xiaohua, a director of Shanghai Fenghua (Group) Co., Ltd. ("Fenghua Shares") and Loncin Holdings Co., Ltd. ("Loncin"). Fenghua Shares is a company incorporated in the PRC, whose shares are currently listed on the Shanghai Stock Exchange (stock code: 600615). Mr. Duan Xiaohua was a non-executive director of the Company, and ceased to be the Company's director as of the date of this announcement. Loncin was a major shareholder of the Company, holding 432,188,780 domestic shares, represented approximately 9.40% issued shares of the Company as of the year-end of 2018.

According to the Decision of the Administrative Supervision Measures No. [2019] No. 54 issued by the Shanghai Securities Regulatory Bureau on 23 May 2019, at the relevant time, Fenghua Shares subscribed for RMB480 million non-public debt financing certificate in Chongqing Xinzhao Investment Co., Ltd. ("Chongqing Xinzhao", a related party of Fenghua Shares' controlling shareholder). Shanghai Securities Regulatory Bureau ruled that the funds was ultimately provided for Fenghua Shares' controlling shareholder and its related party's usage, and ruled that it constituted occupation of non-operating funds by controlling shareholder and its related party, and that Fenghua Shares' controlling shareholder and its related party breached "Notice on Regulating the Capital Exchanges between Listed Companies and Related Parties and the Issues Concerning the External Guarantee of Listed Companies (CSRC Order [2003] No.56)" and "Guidelines for the Governance of Listed Companies (CSRC Order [2002] No.1)".

Fenghua Shares violated the relevant provisions of the Administrative Measures on Information Disclosure of Listed Companies (CSRC Order No. 40) and the Content and Format Guidelines for Information Disclosure of Companies Offering Public Offerings No. 3 - Contents and Formats of Semi-annual Reports (CSRC Announcement [2017] No. 18).

As a director of Fenghua Shares and as Loncin's (controlling shareholder's) assistant to president and chief financial officer, Mr. Duan did not perform his duties diligently, and after he had been aware of the above matter, he did not report to the board of directors of Fenghua Shares in a timely manner and did not cooperate with Fenghua Shares to fulfil its information disclosure obligations, which violated Articles 3 and 40 of the Measures for the Administration of Information Disclosure of Listed Companies. According to Articles 58 and 59 of such Measures, the Shanghai Securities Regulatory Bureau decided to implement an administrative supervision measure on Mr. Duan by issuing the warning letter to him.

Shanghai Securities Regulatory Bureau also implemented administrative supervision measures by issuing a warning letter to Fenghua Shares' controlling shareholder, Loncin. Mr. Tu Jianhua, non- executive Director, holds 2% equity interests in Locin. Mr. Tu holds 98% equity interest in Loncin's controlling shareholder, Loncin Group Co., Ltd., at the same time.

2. Analysis of the incident's impact on the issuer' production and operation

This incident of Mr. Duan Xiaohua, non-executive director of the Company, and Loncin, major shareholder respectively receiving warning letter from Shanghai Securities Regulatory Bureau will not have any material adverse impact on the issuer's production and operation, financial condition, and ability to repay its debts.

Announced by

Hanhua Financial Holding Co., Ltd.

29 May 2019