The Stock Exchange of Hong Kong

NEWS RELEASE
March 16, 1999

The Listing Committee of The Stock Exchange of Hong Kong has recently concluded a disciplinary hearing into the conduct of OLS Group Limited, its executive director, Mr Siu Wing Fung Alfred and certain of its former executive directors, namely Ms Lau Po Wing Kam Theresa, Mr Chan Yiu Ming, Mr Lau Siu Fai, and Mr Siu Wing Yan Winston, in connection with, among other things, certain connected transactions, whereby the Company and its subsidiaries made a number of payments on behalf of its substantial shareholder, OLS Asia Holdings Limited, and/or its wholly owned subsidiaries during the period from July 1, 1997 to February 28, 1998. These payments which were made for various operating expenses and to enable OLS Asia Holdings Limited to pay a dividend, amounted to HK$46.3 million, representing 13.5% of the net tangible assets of the Company as at June 30, 1997. The Company and the Relevant Parties have admitted breach of the connected transaction rules under Chapter 14 of the Exchange Listing Rules.

The Listing Committee has also concluded a disciplinary hearing into the conduct of the Relevant Parties in connection with their authorising the publication of two announcements of the Company dated March 7 and 15, 1998 which were purportedly made "By order of the Board". It however transpired that the Announcements were made without prior consultation with the independent non-executive directors of the Company.

The Listing Committee has concluded that the Connected Transactions are in breach of Rule 14.26(6)(a) and 14.29(1) of the Exchange Listing Rules, and that the Relevant Parties have breached the Exchange Listing Rules in authorising the publication of the Announcements which were misleading to the shareholders of the Company and the investing public.

The Listing Committee has also found that by virtue of the said breaches of the Exchange Listing Rules, the Relevant Parties breached their respective Declaration and Undertaking with regard to Directors (Form B) as set out in Appendix 5 to the Exchange Listing Rules, whereby they undertook to comply to the best of their abilities with the Exchange Listing Rules from time to time in force, and to use their best endeavours to procure that the Company of which they are/were directors would so comply; and further in failing to fulfil their fiduciary duties and duties of skill, care and diligence to a standard at least commensurate with the standard established by Hong Kong law, each of the Relevant Parties thereby failed to comply with Rule 3.08 of the Exchange Listing Rules, in particular sub-section (f) thereof.

Accordingly, each of Mr Siu Wing Fung Alfred, Ms Lau Po Wing Kam Theresa, Mr Chan Yiu Ming, Mr Lau Siu Fai, and Mr Siu Wing Yan Winston, is hereby publicly censured by the Listing Committee for the breach of their respective Undertaking and Rule 3.08, in particular, sub-section (f) thereof.

For the avoidance of doubt the Exchange confirms that it is not in relation to this matter publicly censuring the Company or its non-executive directors.

Corporate Communications Department

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