China Life Insurance Company: Validity Of The Partnership Agreement

The following excerpt is from the company's SEC filing.

The Partnership Agreement shall become effective after all partners and/or their agents have completed their internal procedures and signed on the Partnership Agreement.

Upon agreement by all partners of the Partnership and subject to satisfaction of certain conditions, the partners may make further capital contribution to the Partnership in an aggregate amount of RMB5 billion.

The Company, CLIC and P&C Company shall have the option to acquire the equity interest in, or make capital injection to, the project companies held by the Partnership, provided however that, upon completion of the acquisition or capital injection, the aggregate capital contribution made by the Company, CLIC and P&C Company in the project companies shall not be more than 20% of the capital contribution made by the Partnership.

If the Company makes further capital contribution to the Partnership, or exercises its option to acquire the equity interest in, or make capital injection to, the project companies held by the Partnership in accordance with the above provisions in the Partnership Agreement, the Company will comply with the applicable requirements of the Listing Rules as and when required.

The Company is one of the leading life insurance companies in the PRC. It offers individual and group life insurance, annuities, accident and health insurance products and services.

CLIC, the controlling shareholder of the Company, offers insurance policies to groups and individuals, which are managed by the Company under the policy management agreements.

P&C Company is principally engaged in insurance business and its scope of business includes: property and casualty insurance, liability insurance, credit and guarantee insurance, short-term health insurance and accidental injury insurance, re-insurance in connection with the above insurance businesses, insurance fund application business permitted under the PRC laws and regulations and other businesses approved by CIRC.

Jiading Venture Capital is principally engaged in investment management, investment consultation (other than investment consultation in the areas of finance and securities), and corporate management consultation.

International Automobile City is principally engaged in industrial investment, assets operation, assets management, public facilities construction, property management, and property development.

The Transaction will be conducive to securing a long-term and steady investment return in cash for the Company, improving its allocation of assets and liabilities and serving as an opportunity for the Company to build up its cooperation with Shanghai Municipal Government, so as to support the development of its insurance business.

The Directors (including the independent non-executive Directors) are of the view that the Transaction is conducted on normal commercial terms, is fair and reasonable and in the interests of the Company and its shareholders as a whole. Mr. Yang Mingsheng, Mr. Miao Jianmin, Mr. Wan Feng, Mr. Zhang Xiangxian and Mr. Wang Sidong hold positions in CLIC and/or P&C Company and have abstained from voting on the board resolution passed to approve the Transaction. Save as disclosed above, no other Director is regarded as having a material interest in the Transaction, and hence no other Director has abstained from voting on the board resolution to approve the Transaction.

CLIC, the controlling shareholder of the Company, currently holds approximately 68.37% of the issued share capital of the Company and is a connected person of the Company. P&C Company is held as to 60% and 40% by CLIC and the Company, respectively, and is therefore an associate of CLIC. Thus, P&C Company also constitutes a connected person of the Company. As such, the Transaction constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Given that one or more of the applicable percentage ratios in respect of the Transaction are more than 0.1% but less than 5%, the Transaction is subject to the reporting and announcement requirements but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

“China Credit Trust”    (China Credit Trust Co., Ltd.), a company established under the laws of the PRC with limited liability, which, to the best of the Directors’ knowledge, information and belief, after having made all reasonable enquiry, is a third party independent of the Company and its connected persons

“CLIC”    (China Life Insurance (Group) Company), a state-owned enterprise established under the laws of the PRC and the controlling shareholder of the Company

“International Automobile City”    (Shanghai International Automobile City (Group) Co., Ltd.), a company established under the laws of the PRC with limited liability, which, to the best of the Directors’ knowledge, information and belief, after having made all reasonable enquiry, is a third party independent of the Company and its connected persons

“Jiading Development”    (Shanghai Jiading Industrial Zone Development (Group) Co., Ltd.), a company established under the laws of the PRC with limited liability, which, to the best of the Directors’ knowledge, information and belief, after having made all reasonable enquiry, is a third party independent of the Company and its connected persons

“Jiading Venture Capital”    (Shanghai Jiading Venture Capital Management Co., Ltd.), a company established under the laws of the PRC with limited liability, which, to the best of the Directors’ knowledge, information and belief, after having made all reasonable enquiry, is a third party independent of the Company and its connected persons

“Limited Partner(s)”    the partner(s) in the Partnership with limited liability up to the amount of their capital contributions under the Partnership Agreement, being the Company, CLIC, P&C Company, Jiading Development, International Automobile City and China Credit Trust

“Managing Partner”    the partner who is responsible for the executive functions and investment operations of the Partnership under the Partnership Agreement, being Jiading Venture Capital

“P&C Company”    (China Life Property and Casualty Insurance Company Limited), a joint stock limited liability company incorporated under the laws of the PRC and a subsidiary of CLIC

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.

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Other recent filings from the company include the following:

China Life Insurance Company: Announcement Of Premium Income - April 16, 2014

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