China Petrochemical Development : Supplemental explanation with respect to stealing the Company's trade secret and breach of trust by the Company's former general manager Tsai Hsi-Jin et al.

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Provided by: CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

SEQ_NO 1 Date of announcement 2017/01/16 Time of announcement 00:00:56 Supplemental explanation with respect to stealing

Subject

Date of events

Statement

the Company's trade secret and breach of trust by the Company's former general manager Tsai Hsi-Jin et al.

2017/01/13 To which item it meets paragraph 49

1. Date of occurrence of the event:2017/01/13

2. Company name:China Petrochemical Development Corporation (CPDC), Taiwan, Republic of China (ROC)

3. Relationship to the Company (please enter "head office" or "subsidiaries"):head office

4. Reciprocal shareholding ratios:N/A 5.Cause of occurrence :

The Company received an indictment letter by the prosecutor from Miaoli District Prosecutor Office on January 13, 2017 . The facts regarding committed crime stated in said indictment provide that the Company's former

general manager Tsai Hsi-Jin planned to form another petrochemical company to sell petrochemical related products in Taiwan and Mainland China after

he left the Company in July 2012. In this connection, Tsai Hsi-Jin, Chen

Jin-Pei and other defendants who were still employed by the Company at the moment agreed to communicate through their personal emails knowing that they owed confidentiality obligation to the Company as they had entered into confidentiality documents with the Company. Based on the communication of intent to engage in commonly violating the Trade Secret Act and the intent

to pursue illegal self interests, they execute such criminal plan by improperly reproducing and utilizing the Company's trade secrets , confidential information or related resource.

This case was found and brought by the Company after the Company's internal audit. Miaoli District Prosecutor Office checked and confirmed such facts

after it instructed Miaoli investigation bureau under the Investigation Bureau of Ministry of Justice to search and seize related trade secrets of the Company . After the prosecutor of Miaoli District Prosecutor Office concluded the investigation, the Company's former general manager Tasi Hsi-Jin, former project manager Chen Jin-Pei, former assistant vice president of technology center Chang Ying-hsi, former specialist of

technology center Lin O Young, Yeh O Shan, former manager of safety and environmental protection center Hong O Teng, former factory director of

Tou-fen factory Liu Yao-Long, and He O Hua Company are indicted as public prosecution by the prosecutor for the possible violation of the Trade

Secret Act, offenses regarding breach of trust and disclosure of commercial and industrial secrets under the Criminal Code during the period from September 2012 to 2014 .

6.Countermeasures:

1. This case has been indicted and in the judic iary process.

2. The Company has re-investigated and reviewed thoroughly the internal management system in order to prevent the same event from recurring.

3. The Company will not tolerate anyone who damages the rights and interests of the Company or its shareholders and will definitely take legal action.

7.Any other matters that need to be specified:No

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