Xinjiang La Chapelle Fashion : RECEIPT OF NOTICE OF FORCED AUCTION IN RESPECT OF THE A SHARES HELD BY SUBSTANTIAL SHAREHOLDER FROM SHANGHAI FINANCIAL COURT

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อᖛזࢀԎဧ؂ٰུ΅Ϟࠢʮ̡

Xinjiang La Chapelle Fashion Co., Ltd.

(formerly known as "Shanghai La Chapelle Fashion Co., Ltd.

€ɪऎזࢀԎဧ؂ٰུ΅Ϟࠢʮ̡")

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

(Stock code: 06116)

RECEIPT OF NOTICE OF FORCED AUCTION IN RESPECT OF THE A SHARES HELD BY SUBSTANTIAL SHAREHOLDER FROM

SHANGHAI FINANCIAL COURT

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 and 28 March 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* (ɪऎږፄج৫) (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, and (g) the successful auction on 26 March 2021 by the Shanghai Financial Court of the A Shares held by Shanghai Hexia 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.

I. BACKGROUND

Since 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, the Shanghai Financial Court auctioned all the 141,600,000 A Shares (all being restricted shares) on the Judicial Execution Platform on 5 March 2021, representing 25.85% of the total issued share capital of the Company. According to the auction results displayed on the Judicial Execution Platform, all of the 141,600,000 A Shares were successfully bid, 40,000,000 and 21,600,000 of which were ordered to be transferred to Shanghai Qijin and Shanghai Wensheng respectively. The transfers were completed on 25 March 2021. Separately, the Shanghai Financial Court held that, since some of the successful bidders failed to pay their corresponding transaction balance in full within the specified period, 80,000,000 of the 141,600,000 A Shares held by Mr. Xing have not been disposed of successfully. Therefore, the Court will re-commence the disposal process in respect of these 80,000,000 A Shares. For details, please refer to the Announcements.

II. NOTICE OF JUDICIAL DISPOSAL OF SHARES

On 26 March 2021, the Company received the Notice of Judicial Disposal of Shares (2020) Hu 74 Zhi No. 425* €( 2020လ74ੂ425໮̡جஈໄٰୃʮѓ') (the "Notice") from the Shanghai Financial Court, and learned that the judicial disposal of Mr. Xing's 80,000,000 A Shares (all being restricted shares) will be publicly conducted for the second time on the Judicial Execution Platform on 16 April 2021 (the "Auction").

The Notice provides that:

1. Disposal subject: 80,000,000 A Shares held by Mr. Xing (stock abbreviation: *STזࢀ, stock code: 603157, stock category: restricted shares), accounting for 14.61% of the total share capital of the Company. This disposal may result in changes in the de facto controller and major shareholder of the Company.

The initial unit price of such A Shares is 70% of the evaluated price of RMB1.81 per share on 17 November 2020, namely RMB1.27. Any bid not exceeding such initial unit price of disposal shall be invalid.

Special Notice: After inquiries with the securities registration and clearing organisation and the Company, the above-mentioned restricted shares are pre-IPO shares, and the original date of release of the restricted sales is 25 September 2020. Reasons for not releasing restricted sales: According to the explanation provided by the Company to the Shanghai Financial Court, pursuant to the Company's plan to stabilize the Company's share price and the undertaking made by the controlling shareholder Xing Jiaxing according to such plan, when the preconditions for activating the share price stabilisation measures are met, if the controlling shares violate the relevant obligations to stabilize the Company's share price, the Company will take measures such as not transferring the Company's shares and extending the lock-up period until it has completed the above measures in accordance with the share price stabilisationmeasures, details of which are set out in the "Listing Announcement on the Initial Public Offering of A Shares"* (࠯ϣʮක೯БAٰٰୃɪ̹ʮѓࣣ') of the Company dated 22 September 2017. Before participating in the bidding, bidders should seek information from the Company and securities regulators on the specific reasons for the restrictions on the sale of the above-mentioned shares to avoid related investment risks. The conditions for the release of the sales restriction shall be subject to the final decisions of the Company and regulators.

• 2. Bidders shall meet the qualifications for qualified investors for such disposal of shares, and shall abide by the relevant regulations on the reduction of shareholding of the Company upon completion of the transaction, and perform information disclosure obligations as required.

  Stock exchange participants and investors who own or rent trading units can log in to the Judicial Execution Platform through their configured accounts or submit bidding declarations through the offer channel designated by the relevant stock exchange. Investors who are eligible for offline subscription of new shares can log in to the Judicial Execution Platform (website:https://sf.uap.sse.com.cn/) through the configured account to apply for bidding. Other bidders may entrust participants of the relevant stock exchange to submit bidding declarations on their behalf.

• 3. The amount of shares of the Company already held by the bidder and the number of shares it bids shall not in aggregate exceed 30% of the number of issued shares of the Company. If the bidder's cumulative holding of the shares of the Company exceeds 30% due to participation in this bidding, it shall be handled in accordance with the relevant provisions of the Securities Law of the People's Republic of China* ( ʕശɛ͏΍ձ਷ᗇՎج').

• 4. The disposal will be conducted through split trades. The minimum bidding declaration quantity for each bid is 20,000,000 shares, and the deposit corresponding to the minimum bidding declaration quantity is RMB5,000,000. The amount of deposit paid by the bidder shall match the maximum bidding declaration quantity. The deposit shall be paid to the designated account (Account Name: Shanghai Financial Court, Bank: Agricultural Bank of China, Shanghai Hubei Road Branch, Account Number: 6228400037191697969) from 6 April 2021 to 15:30 on 13 April 2021. The payment shall be made by remittance, and the relevant information of the actual bidder (including the contact person and contact information, the name of the securities account, the number of the stock account, and the number of the bid declared) shall be indicated in the remarks column of the remittance. The Shanghai Financial Court will confirm the bidding qualification and the quantity of bidding declaration. The bid is invalid if the deposit is not paid or is not paid in full.

  After the results of the bidding are announced, the deposit already paid by the buyer of the subject will be automatically converted into a portion of the transaction amount. The deposit paid by the bidder who does not win the bid shall be returned to the original payment account within five business days in accordance with the original payment method. No interest shall accrue on the deposit.

The purchaser shall pay the difference (after deducting the deposit) of the transaction amount to the above designated account of the Shanghai Financial Court within five business days after receiving the notice from the Shanghai Financial Court. If the payment is overdue, the Shanghai Financial Court may re-dispose of the shares, the deposit paid will not be refunded, and the buyer may not participate in the bidding again.

• 5. The bidding time for bidders is from 9:30 to 11:30 and 13:00 to 15:30 on 16 April 2021.

  The bidding is automatically matched by the Judicial Execution Platform in accordance with the principle of "price first-quantity first-time first". After verification by the Shanghai Financial Court, the bidding results will be announced on the Judicial Execution Platform.

• 6. After the bid is completed and the buyer having paid all the remaining balance of the transaction, the Shanghai Financial Court will issue relevant legal documents in accordance with the bid price of the bidder to assist in the registration of transfer of shares in accordance with the relevant provisions of the laws and judicial interpretations.

  The specific matters of the judicial enforcement of the block trade of shares will be carried out in accordance with the "Operating Rules for the Judicial Assistance Execution Platform for Block Trade of Shares"* ( ɽٰ֚ୃ̡ج՘пੂБ̨̻዁Ъ஝ᇍ')."

III. RELEVANT RISK WARNINGS

• 1. As at the date of this announcement, Mr. Xing directly holds 80,274,425 A Shares, representing 14.66% of the total issued share capital of the Company. Shanghai Hexia, the party acting in concert with Mr. Xing, holds 45,204,390 A Shares, representing 8.25% of the total issued share capital of the Company. Mr. Xing and Shanghai Hexia collectively hold 125,478,815 A Shares, representing 22.91% of the total issued share capital of the Company. 80,000,000 A Shares held by Mr. Xing will be auctioned, representing 14.61% of the total issued share capital of the Company, and 99.66% of the A Shares of the Company directly held by Mr. Xing. If auction of all or a substantial portion of the 80,000,000 A Shares is completed, there may be a change of de facto controller of the Company under the SSE Listing Rules.

• 2. This judicial disposal is still in the auction publicity stage, and the follow-up may involve other aspects such as bidding, payment, execution of legal procedures by the court, equity change and transfer. The auction result remains uncertain.

• 3. Furthermore, the judicial disposal of the 45,200,000 A Shares of the Company held by Shanghai Hexia was publicly conducted on the Judicial Execution Platform on 26 March 2021. According to the "Notice of the Results of Disposal of Shares through Auction"*€ٰୃஈໄᘩርഐ؈ ஷࣣٝ') received from the Shanghai Financial Court, Shanghai Qijin successfully bid for all 45,200,000 A Shares. If auction of all or a substantial portion of the 45,200,000 A Shares is completed, there will be a change of de facto controller of the Company under the SSE Listing Rules. For details, please refer to the announcement of the Company of even date.

4. The Company will pay close attention to the subsequent progress of this Auction and the auction of the 45,200,000 A Shares held by Shanghai Hexia, and will perform its information disclosure obligations in a timely manner in accordance with relevant requirements.

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

28 March 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