Xinjiang La Chapelle Fashion : UPDATE ANNOUNCEMENT ON THE PROGRESS OF THE JUDICIAL AUCTION OF THE A SHARES HELD BY SUBSTANTIAL SHAREHOLDER

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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)

UPDATE ANNOUNCEMENT ON THE PROGRESS OF THE JUDICIAL AUCTION

OF THE A SHARES HELD BY SUBSTANTIAL SHAREHOLDER

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 and 23 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* (ɪऎږ ፄج৫) (the "Shanghai Financial Court"), (c) the successful auction on 5 March 2021 (the "Auction") by the Shanghai Financial Court of the A Shares held by Mr. Xing on the judicial assistance 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, and (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 (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 assistance execution platform of the SSE 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 assistanceexecution platform of the SSE, 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. 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. COMPLETION OF TRANSFERS

On 25 March 2021, the Company received the Notice of Assistance in Execution (2020) Hu 74 Zhi 425 No. 2* €( 2020လ74ੂ425໮ʘɚ՘пੂБஷٝ') and the Notice of Assistance in Execution (2020) Hu 74 Zhi 425 No. 3* €( 2020လ74ੂ425໮ʘɧ՘пੂБஷٝ') issued by the Shanghai Financial Court, and the Notice on Judicial Freezing and Judicial Transfer of Shares (2021) Si Dong No. 0325-1* (2021 ̡ࡖ0325-1໮ٰᛆ̡جࡖഐʿ̡جྌᔷஷٝ') issued by the Shanghai Branch of China Securities Depository and Clearing Corporation Limited* (ʕ਷ᗇՎ೮াഐၑϞࠢப΂ ʮ̡), and learned that the transfers of 40,000,000 and 21,600,000 A Shares of the Company (all being restricted shares) held by Mr. Xing to Shanghai Qijin and Shanghai Wensheng respectively have been completed. For details, please see the table below.

No.

TransferorTransfereePercentage of the A Shares Involved against No. of the Total Issued A Shares Share Capital of Involved the Company

Date of TransferNature of the A Shares

1

Mr. XingShanghai Wensheng

21,600,000 3.94%

25 March 2021

2

Mr. XingShanghai Qijin

40,000,000

• 7.30% 25 March 2021

  Restricted shares Restricted shares

  Total

  /

  /

  61,600,000

• 11.25% /

/

Before the change in shareholding:

(i) Mr. Xing directly held 141,874,425 A Shares, representing 25.91% of the total issued share capital of the Company;

• (ii) Shanghai Hexia, the party acting in concert with Mr. Xing, held 45,204,390 A Shares, representing 8.25% of the total issued share capital of the Company;

• (iii) Mr. Xing and Shanghai Hexia collectively held a total of 187,078,815 A Shares, representing 34.16% of the total issued share capital of the Company; and

(iv) each of Mr. Xing and Shanghai Hexia was a controlling shareholder (as defined under the

Listing Rules) of the Company, and Mr. Xing was a de facto controller (as defined under the SSE Listing Rules) of the Company.

After the change in shareholding:

(i) Mr. Xing directly holds 80,274,425 A Shares, representing 14.66% of the total issued share capital of the Company;

• (ii) Shanghai Hexia, the party acting in concert with Mr. Xing, holds 4,5204,390 A Shares, representing 8.25% of the total issued share capital of the Company;

• (iii) Mr. Xing and Shanghai Hexia collectively hold 125,478,815 A Shares, representing 22.91% of the total issued share capital of the Company;

• (iv) the change in shareholding of Mr. Xing has not resulted in a change of de facto controller of the Company under the SSE Listing Rules, while each of Mr. Xing and Shanghai Hexia has ceased to be a controlling shareholder of the Company under the Listing Rules;

• (v) Shanghai Wensheng holds 21,600,000 A Shares, representing 3.94% of the total issued share capital of the Company;

• (vi) Shanghai Qijin holds 40,000,000 A Shares, representing 7.30% of the total issued share capital of the Company; and

(vii)as disclosed in the announcement of the Company dated 7 March 2021, Shanghai Wensheng indirectly holds 100% of Shanghai Qijin; therefore, Shanghai Wensheng and Shanghai Qijin collectively hold 61,600,000 A Shares, representing 11.25% of the total issued share capital of the Company.

III. IMPACT ON THE COMPANY AND RISK WARNINGS

• 1. As at the date of this announcement, the transfers of 40,000,000 and 21,600,000 A Shares held by Mr. Xing to Shanghai Qijin and Shanghai Wensheng respectively have been completed, representing 11.25% of the total issued share capital of the Company. While the resulting change in shareholding of Mr. Xing has not resulted in a change of de facto controller of the Company under the SSE Listing Rules, each of Mr. Xing and Shanghai Hexia has ceased to be a controlling shareholder of the Company under the Listing Rules.

• 2. As at the date of this announcement, the Shanghai Financial Court has held that the 80,000,000 A Shares of the Company mentioned above shall be auctioned, sold off, or sold at their current price. The date and time of the re-disposal remain uncertain. Furthermore, the judicial disposal of the 45,200,000 A Shares of the Company held by Shanghai Hexia, the concert party of Mr. Xing, will be publicly conducted on the judicial assistance execution platform of the SSE for block trade of shares on 26 March 2021. If the auction of all or a substantial portion of the A

Shares held by Shanghai Hexia and the aforementioned 80,000,000 A Shares still held by Mr. Xing is completed, there may be a change of de facto controller of the Company under the SSE Listing Rules.

• 3. The change in shareholding will not affect the normal production and operation of the Company, will not adversely affect the Company's principal business and its ability to continue as a going concern, and will not render the Company's shareholding distribution unqualified for listing under the SSE Listing Rules.

• 4. The Company will closely monitor the subsequent progress of the Auction, and perform its information disclosure obligations in a timely manner in accordance with relevant rules and regulations.

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

25 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