Qingling Motors : INSIDE INFORMATION - LITIGATION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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

(Stock Code: 1122)

INSIDE INFORMATION

LITIGATION

This announcement is made by Qingling Motors Co. Ltd (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09 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 announcement of inside information of the Company dated 29 August 2019 (the "Announcement"). Unless otherwise defined, terms defined in this announcement shall have the same meanings as those defined in the Announcement.

After the Appeal Judgment came into effect, Company Y applied to the Shenzhen Court for enforcement of the Appeal Judgment. On 12 December 2019, the Company received the enforcement order dated 4 November (the "Enforcement Order") from the Shenzhen Court. Details of the Enforcement Order are as follows: the properties of the Customer, relevant guarantors (guarantor A, guarantor B, guarantee company A and guarantee company B) and the Company in the amount of approximately RMB138 million shall be seized, frozen or transferred and in particular, the Company shall assume the supplementary compensation liability.

Based on the rulings under the Enforcement Order, the bank balances of the Company that has been frozen since 16 August 2015 shall be increased from RMB79,999,000 to approximately RMB138 million. For the abovementioned increased frozen amount, the Company is discussing with the auditors on whether it is required to make further provision therefor. Upon finalisation, the Company will make announcement(s) when required.

As disclosed in the Announcement, the Company has applied to the Supreme People's Court of the PRC for retrial and is still waiting for the court's decision on whether the application will be accepted.

The Company will make further announcement(s) to inform the Company's shareholders and potential investors of the significant progress of the 2015 Litigation as and when appropriate in accordance with the requirements of the Listing Rules.

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Based on the opinion of the PRC legal adviser and the information currently available, the Board expects that the 2015 Litigation will have no material impact on the overall financial or operating conditions of the Group.

Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

By Order of the Board

Qingling Motors Co. Ltd

LUO Yuguang

Chairman

Chongqing, the PRC, 20 December 2019

As at the date of this announcement, the Board comprises 11 Directors, of which Mr. LUO Yuguang, Mr. HAYASHI Shuichi, Mr. MAEGAKI Keiichiro, Mr. ADACHI Katsumi, Mr. LI Juxing, Mr. XU Song and Mr. LI Xiaodong are executive Directors and Mr. LONG Tao, Mr. SONG Xiaojiang, Mr. LIU Tianni and Mr. LIU Erh Fei are independent non-executive Directors.

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