Gazette Case: Lanzhou Shenjun Logistics Co., Ltd. v. Lanzhou Minbai (Group) Co., Ltd.
In a listed company's split-share reform, where the controlling shareholder contributes equity assets without consideration, causing the company to form capital reserves that are then capitalized and allocated to tradable shareholders under a shareholders' resolution, the arrangement does not amount to a non-public issuance of new shares under the Securities Law. The resulting capital reserves belong to the company, and non-tradable shareholders cannot invoke equal-share principles to demand a proportional allotment of the added shares; targeted capitalization in split-share reform must be distinguished from securities issuance.
Holding
In a listed company's split-share reform, where the controlling shareholder contributes equity assets without consideration, causing the company to form capital reserves that are then capitalized and allocated to tradable shareholders under a shareholders' resolution, the arrangement does not amount to a non-public issuance of new shares under the Securities Law. The resulting capital reserves belong to the company, and non-tradable shareholders cannot invoke equal-share principles to demand a proportional allotment of the added shares; targeted capitalization in split-share reform must be distinguished from securities issuance.