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(Original title: Haier Smart Home: There may be business competition between its subsidiary and its affiliated companies, and the independence of its executive who concurrently serves as the vice president of the actual controller is questionable)

"Jin Zhengyan" Southern Capital Center Ji Su/Author Sanshi Nanjiang Yingwei/Risk Control

Looking back at history, in June 2016,HaierHaier Smart Home Co., Ltd. (hereinafter referred to as "Haier Smart Home") has basically completed the acquisition of General Electric's home appliance business and assets. In 2018, Haier Smart Home signed a share purchase agreement to acquireHaier GroupHaier Smart Home not only sells its products abroad, but also realizes the "localization" of its brand through the overseas layout of R&D, manufacturing and sales.

In 2019, in order to further clarify the main business positioning of Haier Smart Home appliances, Haier Smart Home carried out asset replacement and included water appliances assets. To date, a subsidiary of Haier Smart Home is engaged in the production of water purification equipment, which may compete with the business of the company in which the related party holds a stake. In addition, Haier Smart Home executive Jie Juzhi may not only serve as vice president of the actual controller Haier Group, but also as general manager of the related party.

1. Haier Smart Home's subsidiaries and its affiliated companies may have business competition, and their addresses overlap.

Business competition may lead to conflicts of interest, affect the objectivity and fairness of corporate decision-making, and harm the interests of shareholders and other stakeholders. Haier Smart Home's subsidiaries may have business competition with the shareholding enterprises of related parties.

1.1 Before Strauss was acquired by Haier Smart Home, it was controlled by its related party Lenong IoT, which also controlled Xiaotianjiang

According to the Major Asset Acquisition and Related Transaction Report (Draft) (Revised Version) issued by Haier Smart Home on August 31, 2020, in September 2019, Haier Smart Home's holding subsidiary Haier Appliances Group Co., Ltd. (hereinafter referred to as "Haier Appliances") acquired 100% of the equity of Qingdao Haier Strauss Technology Co., Ltd. (formerly known as Qingdao RRS Health Industry Development Co., Ltd., hereinafter referred to as "Strauss") by acquisition.

According to data from the Market Supervision Bureau, on September 9, 2019, Strauss was wholly owned by Lenong Internet of Things Co., Ltd. (hereinafter referred to as "Lenong Internet of Things") and changed to Qingdao Haier Smart Home Appliances Co., Ltd. (hereinafter referred to as "Haier Smart Home Appliances"). From March 5, 2020, Strauss was wholly owned by Qingdao Haishi Water Equipment Co., Ltd.

According to data from the Market Supervision Bureau, as of the query date July 11, 2024, Lenong Internet of Things has been controlled by Qingdao Haiyishun Investment Co., Ltd. (hereinafter referred to as "Haiyishun Investment") since January 2015. Haiyishun Investment has been indirectly controlled by Haier Group since its establishment.

According to Haier Smart Home's 2023 annual report, Haier Group is the actual controller of Haier Smart Home.

That is, in September 2019, Haier Smart Home acquired Strauss from Lenong Internet of Things, a company indirectly controlled by its actual controller Haier Group.

According to data from the Market Supervision Bureau, as of the query date July 11, 2024, Qingdao Xiaotianjiang Intelligent Technology Co., Ltd. (formerly Qingdao Haier Health Technology Co., Ltd., hereinafter referred to as "Xiaotianjiang") has been 100% owned by Lenong Internet of Things since its establishment in 2016. Since the establishment of Qingdao Jinhaishun Water Purification Equipment Co., Ltd. (hereinafter referred to as "Jinhaishun Water Purification") in 2017, Xiaotianjiang has held 17% of Jinhaishun Water Purification's shares.

It can be seen that Xiaotian will be a company directly controlled by its affiliated party Lenong Internet of Things, and Jinhaishun Water Purification will be a company in which Xiaotian will have a stake.

1.2 Strauss is engaged in the production of water purification equipment. In 2021, Xiaotianjiang signed a strategic cooperation agreement on pipeline direct drinking water with Zhongke Yihe

According to the "Environmental Impact Report on Technological Transformation and Upgrading of Jimo Water Purification Production Line Project" (hereinafter referred to as the "EIA Report") prepared by Strauss in August 2023 as disclosed by Greennet's public information, Strauss is mainly engaged in the production of water purification equipment, and its industry is gas, liquid separation and purification equipment manufacturing.

According to the document Qinghuanshen (Jimo) [2023] No. 175, the Environmental Impact Statement of the Technical Transformation and Upgrading Project of the Jimo Water Purification Production Line submitted by Strauss was approved, and the approval date was November 28, 2023. The project is planned to be expanded at the factory area of ​​No. 157, Tianshan 2nd Road, Tongji Street Office, Jimo District, Qingdao City, Shandong Province.

In addition, the project "Haier Water Purification Smart Internet (Jimo) Industrial Park Project (Phase I)" built by Strauss in the plant area obtained environmental impact assessment approval on June 1, 2020. The project is constructed in two steps. The first step project passed the self-inspection of environmental protection for completion on August 15, 2022. The project has an annual production capacity of 1 million water purification equipment. The second step project has a designed annual production capacity of 1 million water purification equipment. It is under construction and has not yet been put into production.

According to data from the Market Supervision Administration, as of the query date July 11, 2024, Xiaotianjiang's business scope includes intelligent water system development, liquid separation and purification equipment sales, water quality pollutant monitoring and detection instrument sales, ecological environment monitoring and detection instrument manufacturing, etc.

Moreover, according to the WeChat public platform "Ririshun Lenong" whose certification subject is Lenong Internet of Things, on October 11, 2021, Xiaotian will successfully sign a strategic cooperation agreement on pipeline direct drinking water with Shandong Zhongke Yihe Real Estate Development Co., Ltd. (hereinafter referred to as "Zhongke Yihe") at Haier Group. Zhongke Yihe will introduce a water purification system, that is, Ririshun Water will directly deliver drinking water to households.

That is to say, Haier Smart Home acquired 100% of Strauss's equity from Lenong IoT in September 2019, and Strauss mainly produces water purification equipment. Xiaotian, which is controlled by Lenong IoT, will be engaged in the sales of liquid separation and purification equipment, and Xiaotian signed a strategic cooperation agreement on pipeline direct drinking water with Zhongke Yihe in 2021.

Not only that, Xiao Tianjiang’s shareholding company may overlap with Strauss’s address.

1.3 Jinhaishun Water Purification, a joint venture of Xiaotianjiang, may be involved in the production of water purification equipment, and its address overlaps with Strauss

According to data from the Market Supervision Bureau, from its establishment in 2016 to the query date July 11, 2024, the address of Jinhaishun Water Purification was No. 157, Tianshan 2nd Road, Tongji Sub-district Office, Jimo City, Qingdao City, Shandong Province.

In addition, as of the query date July 11, 2024, a quality management system certification (ISO9001) certificate owned by Jinhaishun Water Purification is still valid. The business scope covered by the certification includes the production of water purification equipment and the sales of membranes and membrane components. The address includes No. 157, Tianshan 2nd Road, Tongji Sub-district Office, Jimo City, Qingdao City, Shandong Province.

According to the environmental impact assessment report, Strauss holds a land use certificate located at No. 157 Tianshan 2nd Road, Jimo District, Qingdao City.

As mentioned above, the address of Strauss's construction project is located at No. 157, Tianshan 2nd Road, Tongji Sub-district Office, Jimo District, Qingdao City, Shandong Province, and the land use rights of this address are owned by Strauss. And the Market Supervision Administration shows that as of the query date July 11, 2024, Strauss's residence is No. 157, Tianshan 2nd Road, Tongji Sub-district Office, Jimo District, Qingdao City, Shandong Province.

Through the certified business scope of Jinhaishun Water Purification, a company in which Xiaotian will hold a stake, it can be known that Jinhaishun Water Purification may be engaged in the production of water purification equipment, and its address overlaps with that of Strauss. Strauss is engaged in the production of water purification equipment, and the two businesses may overlap or compete with each other.

The problem is not over.

2. Senior executives may work for both the actual controller and related parties at the same time, raising doubts about the independence of Haier Smart Home personnel

According to regulations, listed companies should maintain asset integrity, personnel independence, financial independence, institutional independence and business independence. However, Haier Smart Home executives may work for both the actual controller and related parties at the same time.

2.1 As of April 2024, Haier Smart Home executive Jie Juzhi also serves as vice president of Haier Group, the actual controller

According to Haier Smart Home's 2023 annual report, Xie Juzhi has served as Vice President of Haier Group since July 2012, and has been appointed CEO and Executive Director of Haier Appliances since March 27, 2019, and has been in charge of the smart home appliance industry since April 2021. As of March 27, 2024, the date of the annual report, Xie Juzhi is the Vice President of Haier Smart Home and one of the senior management of Haier Smart Home, with a term of office from June 28, 2022 to June 27, 2025.

According to the initial public offering of shares of RiRiShun signed on April 12, 2023,gemAccording to the listing prospectus, from July 2012 to the signing date, Xie Juzhi served as the vice president of Haier Group. At the same time, from June 2022 to the signing date, Xie Juzhi served as the vice president of Haier Group.

According to the content released on the official Weibo of the listed company Suntech Group Co., Ltd. (hereinafter referred to as "Suntech Shares") on March 17, 2024, on March 16, a strategic cooperation signing ceremony between Nahui New Energy, Baobi New Energy and Suntech Shares was held in Qingdao. At that time, Haier Group Vice President Xie Juzhi and Nahui Photovoltaic General Manager Ji Xiaojian attended the signing ceremony.

It is not difficult to see that as an executive of Haier Smart Home, Xie Juzhi may also serve as the vice president of Haier Smart Home.

2.2 Vice President Xie Juzhi worked for Haier Group and also served as the general manager of Haiyishun Investment, a related party.

From the above, we can see that Xiaotian will be a company directly controlled by Lenong Internet of Things, an affiliate of Haier Smart Home.

According to the data from the Market Supervision Administration, from August 10, 2017 to June 24, 2019, the executive director and general manager of Xiaotianjiang was named Jie Juzhi. From August 10, 2017 to the query date July 11, 2024, the executive director and general manager of Haiyishun Investment, the indirect controlling shareholder of Xiaotianjiang, was named Jie Juzhi.

It can be seen that Haier Smart Home's executive Xie Juzhi may serve as the general manager of Haiyishun Investment, the indirect controlling shareholder of the affiliated company Xiaotianjiang.

According to the "Notice on the prohibition of general managers and senior managers of listed companies from working part-time in controlling shareholder units", in order to ensure that listed companies and controlling shareholders are strictly separated in terms of personnel, assets and finances, the general manager of a listed company must be full-time and may not hold any other position except director in the group and other controlling shareholder units; general managers and senior managers must receive salaries from listed companies and may not have their salaries paid on their behalf by the controlling shareholder.

The above situation shows that Haier Smart Home executive Jie Juzhi may be the vice president of the actual controller Haier Group and the general manager of the related party Haiyishun Investment at the same time. Based on this situation, the independence of Haier Smart Home personnel may be questioned.