The Stock Exchange of Hong Kong

NEWS RELEASE

November 3, 1999

The Stock Exchange of Hong Kong hereby publicly censures Mr. So Sik for breaches of the Exchange Listing Rules, the Model Code for Securities Transactions by Directors of Listed Companies as set out in Appendix 10 of the Exchange Listing Rules (the "Model Code") and the Declaration and Undertaking with regard to Directors given by him to the Exchange in the form set out in Appendix 5B of the Exchange Listing Rules (the "Undertaking").

At a disciplinary hearing held on June 1, 1999 and subsequently at a disciplinary (review) hearing held on October 8, 1999, the Listing Committee of the Exchange conducted disciplinary hearings into the conduct of, among other persons, Mr. So Sik, vice-chairman and an executive director of the Company, in connection with certain dealings in the shares of the Company by Pelota Worldwide Limited, a company in which Mr. So Sik was interested, during the period from April 22 to 27, 1998.

The Company announced on April 30, 1998 a significant change in the shareholdings of Pelota and Sino Earn Holdings Limited, both substantial shareholders of the Company, as the result of a sale and purchase agreement entered into between Pelota and Sino Earn at approximately 10:00 p.m. on April 23, 1998 for the sale of 13.54% of the then issued share capital of the Company by Pelota to Sino Earn at a price of HK$2 per share. As a result of the signing of the Agreement, Pelota’s interest in the Company was reduced from 45.42% to 28.17% and Sino Earn’s interest increased from 19.95% to 33.77%.

Mr. So Sik did not inform all the other directors of the Company and the Company Secretary of the Agreement until April 27, 1998 and no announcement was made promptly in relation to the Agreement. The Agreement constituted price-sensitive information affecting the Company.

The Listing Committee had found that Mr. So Sik was in breach of the following provisions of the Exchange Listing Rules, the Model Code and the Undertaking:-

1. Rule A1 of the Model Code prohibiting him, as a director of the Company, from dealing in the securities of the Company when he was in possession of unpublished price-sensitive information in relation to those securities, namely the discussions leading to and the signing of the Agreement;
2. Rule 3.13 of the Exchange Listing Rules requiring him, as a director of the Company, to comply with the Model Code or the Company’s own code in no less exacting terms; and
3. the Undertaking whereby he undertook to comply to the best of his ability with the Exchange Listing Rules from time to time in force.

The Listing Committee was critical of the conduct of Mr. So Sik, for dealing or permitting the dealing in the securities of the Company while in possession of information which he should have realised to be unpublished and price-sensitive in relation to those securities.

Accordingly, Mr. So Sik is hereby publicly censured by the Listing Committee for the following:-

1. acting in breach of Rule A1 of the Model Code in that, as a director of the Company, he dealt in securities of the Company when he was in possession of unpublished price-sensitive information in relation to those securities;
2. acting in breach of Rule 3.13 of the Exchange Listing Rules in that, as a director of the Company, he failed to comply with the Model Code or the Company’s own code in no less exacting terms; and
3. acting in breach of the Undertaking in that he failed to comply to the best of his ability with the Exchange Listing Rules from time to time in force.

For the avoidance of doubt, the Exchange confirms that it is not in relation to this matter censuring the Company or any present or former members of its board of directors other than Mr. So Sik.

Corporate Communications Department

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