Taihe Music: CSRC requires explanation on spin-off listing assessment and trust structure of equity incentives, among 7 items

NewTimeSpace News: On 11 September 2026, the International Cooperation Department of the CSRC published the supplementary material requirements for overseas issuance and listing filing for the period from 7 September 2026 to 11 September 2026, requiring Taihe Music Group to provide supplementary explanations on 7 items, with its PRC legal counsel required to conduct verification and issue clear legal opinions.

On domestic operating entities and shareholders, the Company is required to explain the paid-up status of the registered capital of its domestic operating entities, the pricing basis for historical capital increases and share transfers (with prices set out in a separate column), whether capital contributions were paid up and whether there was any failure to fulfil capital contribution obligations, withdrawal of capital contributions or defect in the form of contribution, and to issue a conclusive opinion on whether each equity change was legal and compliant; it must also explain whether the business scope and actual business of its domestic operating entities involve areas restricted or prohibited for foreign investment access and the basis for that assessment, and whether they will continue to comply with foreign investment access policies after the offering. The Company is also required to explain whether shareholding on trust existed in the corporate history of the issuer and its domestic operating entities, and to conduct look-through verification of the offshore entities above shareholders holding 5% or more in accordance with Guideline No. 2 to determine whether any entity prohibited by laws and regulations from holding shares exists.

On structure and incentives, the Company is required to explain the performance of regulatory procedures relating to foreign exchange administration, overseas investment, foreign investment and tax administration in connection with the establishment of the offshore structure and round-trip investment by the issuer and its domestic shareholders, and to issue a conclusive opinion on compliance with the regulations in force at the relevant time; it must explain the consideration for acquiring the domestic operating entities, the pricing basis, means and timing of payment, the fairness of the pricing and the performance of tax filing obligations by the transferors in the share transfer, and whether these comply with the Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors. As regards its equity incentive plan, the Company must issue a conclusive opinion on whether implementation is legal and compliant and whether there is any transfer of benefits, explain the fairness of grant prices, whether grantees who have left still holding incentive interests is consistent with prior contractual arrangements and whether there are disputes or potential disputes, and explain the articles or agreements of the equity incentive plan, the composition and positions of participants and their beneficial interests, the reasons for adopting a trust structure and the main contents of the trust contracts, including the trust arrangement, trust management powers, trust or asset management fees, the term of the contracts and conditions for amendment and termination, arrangements for dealing with trust assets, the timing of contract signing and other special terms, and to explain the basic information of the trust and the domestic entities as required.

On other matters, the Company is required to explain the specific circumstances of the administrative penalties repeatedly imposed on its domestic entity Chengdu Taihe by the Chengdu Municipal Culture, Radio, Television and Tourism Bureau and the rectification measures taken, whether such penalties constitute a material adverse effect on the offering or a material violation of laws and regulations, and to verify whether similar circumstances may arise in its other domestic operating entities; and to explain, as required, the nationality of its directors and senior management and the beneficial owners on a look-through basis and whether they hold any other permanent overseas right of residence. In addition, the Company is required to explain whether its Hong Kong listing constitutes a spin-off by a Nasdaq-listed and Hong Kong Stock Exchange-listed company of its subsidiary for a separate listing on another overseas market and, if so, the rationality, necessity and feasibility of the spin-off, whether the listed company and the subsidiary to be spun off are independent from each other in terms of assets, finances and personnel, whether the listed company can maintain its independence and sustainable operating capability after the spin-off, and whether the newly formed company is capable of standardised operations.

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