Tianqi Lithium Corporation (Tianqi Lithium) has released its revised Articles of Association, detailing updated provisions on capital structure, shareholder rights, board composition, profit distribution and risk oversight mechanisms. Key points include:
1. Capital & Share Structure • Registered capital is set at RMB 1.71 billion, divided into 1.706 billion ordinary shares with a par value of RMB 1 each. • Share mix: 1.48 billion domestically listed A-shares (86.57%) and 229.17 million H-shares (13.43%). • The Company may repurchase up to 10% of total issued shares for purposes such as employee incentives, bond conversion or value protection; shares bought under certain circumstances must be transferred or cancelled within three years.
2. Shareholder Rights & Meetings • Both annual and extraordinary general meetings must be convened, with annual meetings held within six months after each fiscal year-end. • Shareholders (individually or jointly) holding at least 10% of shares can request an extraordinary meeting; those with 1% may submit proposals. • Resolutions on capital changes, mergers, major asset deals (>30% of total assets), material related-party transactions or guarantee exposures, and amendments to the Articles require a two-thirds majority vote (special resolution).
3. Board Structure & Special Committees • The board comprises six directors, with independent non-executive directors representing at least one-third (minimum three). Continuous service of any independent director is capped at six years. • Five specialised board committees are established—Audit & Risk, Strategy & Investment, Remuneration & Appraisal, Nomination & Governance, and ESG & Sustainability. • The Audit & Risk Committee (three independent directors, at least one accounting expert) assumes traditional board audit duties and the statutory supervisory role.
4. Senior Management & Control Mechanisms • The Company appoints a General Manager, Deputy General Managers, a Chief Financial Officer and a Board Secretary; appointments are subject to board approval. • Detailed fiduciary and diligence duties are prescribed for directors and executives, with specific liability clauses for misconduct or negligence. • Controlling shareholders and de facto controllers must avoid fund misappropriation, insider trading, and ensure the Company’s independence.
5. Profit Distribution Policy • Tianqi Lithium adopts a “residual-dividend” approach, prioritising cash payouts when conditions permit. • Cash dividends are mandatory once profit distribution conditions are met, with a minimum cash payout ratio of 20% of distributable profits during growth phases accompanied by significant capital expenditure. • Over any three-year period, cumulative cash dividends must equal at least 30% of the average distributable profits for the period. • If statutory and discretionary reserves combined fall below 50% of registered capital, no share capitalisation from reserves is permitted.
6. Capital Actions & Risk Controls • Clear thresholds trigger shareholder approval for guarantees (e.g., any single guarantee exceeding 10% of net assets, or any guarantee to shareholders/controlling entities). • Significant transactions outside normal course of business that exceed 30% of total assets, or cross defined asset, income or profit thresholds, require shareholder endorsement. • Any change in use of raised funds, major futures/derivative positions, or large securities investments also mandates shareholder approval.
7. Dissolution & Liquidation • Grounds for dissolution include term expiry, shareholder resolution, mergers/divisions, licence revocation, or operational deadlock. • Upon dissolution triggers, the board must form a liquidation committee within 15 days, notify creditors within 10 days, and make public announcements within 30 days. • Surplus assets, after settling debts and obligations, will be distributed to shareholders pro rata.
These amendments align Tianqi Lithium’s governance framework with the PRC Company Law, CSRC regulations and Hong Kong Listing Rules, offering greater transparency, strengthened shareholder protections and clearer capital management parameters.
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