Legal analysis: The China Securities Regulatory Commission has expanded the connotation of actual controller.

Based on the understanding and application of Article 12 of the "Measures for the Administration of Initial Public Offerings and Listing of Stocks" "There is no change in the actual controller" - Opinion No. 1 on the Application of Securities and Futures Laws" (China Securities Regulatory Commission Legal Words [2007] No. 15, hereinafter referred to as "Securities and Futures Law Application Opinion No. 1"), the China Securities Regulatory Commission defines corporate control rights as "the power that can have a significant impact on the resolutions of the shareholders' meeting or can actually control the company's actions, and its origin It is a direct or indirect equity investment relationship with the company." According to the above provisions, anyone who holds equity directly or indirectly can be defined as an actual controller. In practice, there are cases where the China Securities Regulatory Commission defines the controlling shareholder and the actual controller as the same person.

There are inconsistencies in the definition of actual controllers between the Shanghai and Shenzhen Stock Exchanges. The Shanghai Stock Exchange’s Stock Listing Rules remain consistent with the Company Law, defining actual controllers as persons who are not shareholders of the company. However, the "Stock Listing Rules" of the Shenzhen Stock Exchange define actual controllers as "referring to natural persons, legal persons or other organizations that can control and actually control the company's behavior through investment relationships, agreements or other arrangements."

To sum up, in practice, the actual controller refers to someone who, although he does not directly hold the company's shares, or the shares he directly holds does not meet the proportion required by the controlling shareholder, is able to actually control the company through investment relationships, agreements or other arrangements. Acting natural person, legal person or other organization.

Legal basis: "Measures for the Administration of Initial Public Offerings and Listings of Stocks"

Article 1 is intended to regulate the behavior of initial public offerings and listings of stocks and protect the legitimate rights and interests of investors and social welfare. *** interests, these measures are formulated in accordance with the Securities Law and the Company Law.

Article 12: The issuer’s main business and directors and senior managers have not undergone major changes in the past three years, and the actual controller has not changed.

Article 13: The issuer’s equity is clear, and there are no major ownership disputes over the issuer’s shares held by the controlling shareholder and shareholders controlled by the controlling shareholder and actual controller.