THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, other licensed corporation, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in the Company, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Each of The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

==> picture [79 x 36] intentionally omitted <==

HONGKONG CHINESE LIMITED 香港華人有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 655)

RIGHTS ISSUE OF 471,390,178 RIGHTS SHARES AT HK$1.00 EACH IN THE PROPORTION OF

SEVEN RIGHTS SHARES FOR EVERY TWENTY SHARES HELD WITH BONUS WARRANTS ON THE BASIS OF THREE WARRANTS FOR EVERY SEVEN RIGHTS SHARES TO THE QUALIFYING SHAREHOLDERS ONLY AND INCREASE IN AUTHORISED SHARE CAPITAL

Financial adviser to Hongkong Chinese Limited and lead manager to the Rights Issue

SOMERLEY LIMITED

Underwriters to the Rights Issue

SOMERLEY LIMITED

==> picture [67 x 41] intentionally omitted <==

==> picture [87 x 8] intentionally omitted <==

----- Start of picture text -----

Lippo Securities Limited
----- End of picture text -----

To qualify for the Rights Issue, all transfer of Shares accompanied by the relevant share certificates and transfer forms must be lodged for registration with the Company’s Branch Share Registrars in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 30th May, 2008.

Shareholders should note that the Shares are expected to be dealt in on an ex-rights basis from 29th May, 2008. The Rights Shares in their nil-paid form are expected to be dealt in from 11th June, 2008 to 18th June, 2008 (both dates inclusive).

The Rights Issue is subject to the satisfaction of the conditions as described under the paragraph headed “Rights Issue – Conditions precedent to the Rights Issue”. In particular, the Underwriting Agreement contains provisions allowing the Underwriters to terminate the Underwriting Agreement on the occurrence of force majeure events (as described in the paragraph headed “Underwriting Agreement – Termination of the Underwriting Agreement”) by giving written notice to the Company at any time prior to 4:00 p.m. on the second business day following the Final Acceptance Date, i.e. 25th June, 2008. Accordingly, any dealings in the Shares before the Underwriting Agreement becomes unconditional and in the Rights Shares in their nil-paid form from 11th June, 2008 to 18th June, 2008 (both dates inclusive) will bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating selling or acquiring Shares and/or Right Shares in their nil-paid form from the date of this circular up to 27th June, 2008 will bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating any dealings in the Shares or Rights Shares in their nil-paid form are recommended to consult their own professional advisers.

A notice convening the SGM to be held at Granville Room, Lower Lobby, Conrad Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Thursday, 5th June, 2008 at 10:30 a.m. (or so soon thereafter as the annual general meeting of the Company convened for 10:00 a.m. on the same date shall have been concluded or adjourned) is set out on pages 33 to 35 of this circular. Whether or not you are able to attend the SGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude Shareholders from attending and voting in person at the SGM or any adjourned meeting should they so wish.

20th May, 2008

* For identification purpose only

	Page
Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Expected timetable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix – Summary of the terms of the Bonus Warrants. . . . . . . . . . . . . . . . . . . . . . .	24
Notice of the Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

The English text of this circular and the accompanying form of proxy shall prevail over the Chinese text.

– 1 –

EXPECTED TIMETABLE

Set out below is an indicative timetable for the Rights Issue. The timetable is subject to the results of the SGM and any other changes in accordance with the Underwriting Agreement. The Company will notify the Shareholders of any changes to the expected timetable as and when appropriate.

2008

Last day of dealings in the Shares on a cum-rights basis . . . . . . . . . . .Wednesday, 28th May First day of dealings in the Shares on an ex-rights basis . . . . . . . . . . . . Thursday, 29th May Latest time for lodging transfer of the Shares for entitlement to the Rights Issue . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Friday, 30th May Register of members of the Company closes . . . . . . . . . . . . . . . . . . . . . . .Monday, 2nd June to Thursday, 5th June (both dates inclusive) SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:30 a.m. [(Note 3)] on Thursday, 5th June Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 5th June Despatch of the Prospectus Documents to the Qualifying Shareholders and, for information only, Prospectus to the Excluded Shareholders . . . . . . . . . . . . . . . . . . . . . . Friday, 6th June Register of members of the Company re-opens . . . . . . . . . . . . . . . . . . . . . . . . Friday, 6th June First day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . Wednesday, 11th June Latest time for splitting nil-paid Rights Shares . . . . . . . . . . . . 4:30 p.m. on Friday, 13th June Last day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . .Wednesday, 18th June Latest time for acceptance of and payment for the Rights Shares and for application and payment for the excess Rights Shares . . . . . . . . . . . . . . . . 4:00 p.m. on Monday, 23rd June Underwriting Agreement becomes unconditional . . . . . . . . . 4:00 p.m. on Friday, 27th June Announcement of results of the Rights Issue expected to be made on the website of the Stock Exchange and the Company on or about . . . . . . . . . . . . . . Wednesday, 2nd July

– 2 –

EXPECTED TIMETABLE

2008

Refund cheques in respect of wholly or partially

unsuccessful applications for excess

Rights Shares expected to be posted on or about . . . . . . . . . . . . . . . . Wednesday, 2nd July

Share certificates for the Rights Shares and

warrant certificates for the Bonus Warrants

to be despatched on or about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 2nd July

Dealings in fully-paid Rights Shares and

the Bonus Warrants commence on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 4th July

Notes:

All times in this circular refer to Hong Kong times.
Effect of bad weather on the latest time for acceptance of and payment for the Rights Shares and for application and payment for the excess Rights Shares:
The latest time for acceptance of and payment for the Rights Shares will not take effect if there is a tropical cyclone warning signal number 8 or above or a “black” rainstorm warning. If such circumstance is:
(a) in force in Hong Kong at any local time before 12:00 noon but no longer in force after 12:00 noon on 23rd June, 2008, the latest time for acceptance of and payment for the Rights Shares and for application and payment for the excess Rights Share will be extended to 5:00 p.m. on the same business day; or
(b) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on 23rd June, 2008, the latest time for acceptance of and payment for the Rights Shares and for application and payment for the excess Rights Share will be rescheduled to 4:00 p.m. on the following business day which does not have either of those warnings in force at any time between 9:00 a.m. and 4:00 p.m..

If the latest time for acceptance of and payment for the Rights Shares and for application and payment for the excess Rights Share does not take effect on 23rd June, 2008, the dates mentioned above may be affected. An announcement will be made by the Company in such event.

Shareholders should note that the SGM will be held at 10:30 a.m. on 5th June, 2008 (or so soon thereafter as the annual general meeting of the Company convened for 10:00 a.m. on the same date shall have been concluded or adjourned).

– 3 –

EXPECTED TIMETABLE

WARNING OF THE RISKS OF DEALING IN SHARES AND NIL-PAID RIGHTS SHARES

The Rights Issue is subject to the satisfaction of the conditions as described under the paragraph headed “Rights Issue – Conditions precedent to the Rights Issue” in the Letter from the Board contained in this circular. In particular, the Underwriting Agreement contains provisions allowing the Underwriters to terminate the Underwriting Agreement on the occurrence of force majeure events (as described in the paragraph headed “Underwriting Agreement – Termination of the Underwriting Agreement” in the Letter from the Board contained in this circular) by giving written notice to the Company at any time prior to 4:00 p.m. on the second business day following the Final Acceptance Date, i.e. 25th June, 2008. Accordingly, any dealings in the Shares before the Underwriting Agreement becomes unconditional and in the Rights Shares in their nil-paid form from 11th June, 2008 to 18th June, 2008 (both dates inclusive) will bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating selling or acquiring Shares and/or Right Shares in their nil-paid form from the date of this circular up to 27th June, 2008 will bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating any dealings in the Shares or Rights Shares in their nil-paid form are recommended to consult their own professional advisers.

– 4 –

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

“AIAB”	American International Assurance Company
	(Bermuda) Limited, a company incorporated in
	Bermuda with limited liability;
“Board”	board of Directors;
“Bonus Warrant(s)”	bonus warrant(s) to be issued to successful applicants
	of the Rights Shares in the manner as set out in the
	paragraph headed “Rights Issue – Terms of the Rights
	Issue (including Bonus Warrants)” in the Letter from
	the Board contained in this circular;
“Bonus Warrants Subscription	the initial subscription price of HK$1.25 (subject to
Price”	adjustment) per Warrant Exercise Shares;
“business day”	any days (other than Saturday and Sunday) on which
	licensed banks in Hong Kong are open for business
	during their normal business hours;
“Capital Increase”	the proposed increase in the authorised share capital
	of the Company from HK$2,000,000,000 to
	HK$4,000,000,000 by the creation of 2,000,000,000 new
	Shares of HK$1.00 each;
“CCASS”	the Central Clearing and Settlement System established
	and operated by HKSCC;
“CCASS Operational Procedures”	the operational procedures of HKSCC in relation to
	CCASS, containing the practices, procedures and
	administrative requirements relating to the operations
	and functions of CCASS, as from time to time in force;
“Company”	Hongkong Chinese Limited (香港華人有限公司*), a
	company incorporated in Bermuda with limited
	liability, the shares of which are listed on the Stock
	Exchange;
“Completion”	completion of the Rights Issue;
“Deed of Undertaking”	a deed of undertaking dated 17th May, 2008 signed
	by Hennessy and Lippo in favour of the Company in
	relation to, among other things, the undertaking of
	Hennessy to subscribe for and to procure the
	subscription of Rights Shares to be provisionally
	allotted to it and/or its nominees, and to apply under
	the EAF for at least 35,000,000 excess Rights Shares;

* For identification purpose only

– 5 –

DEFINITIONS

“Directors”	directors of the Company;
“EAF(s)”	the excess application form(s) to be issued to the
	Qualifying Shareholders in respect of applications for
	excess Rights Shares (with entitlement to Bonus
	Warrant(s)) pursuant to the Rights Issue;
“Excluded Shareholders”	Overseas Shareholders to whom the Directors, having
	made enquiries regarding the legal restrictions under
	the laws of relevant jurisdiction or the requirements
	of the relevant regulatory body or stock exchange in
	that jurisdiction, consider it necessary or expedient
	not to offer the Rights Shares (with entitlement to
	Bonus Warrant(s)) on account either of legal
	restrictions under the laws of the relevant jurisdiction
	or the requirements of the relevant regulatory body or
	stock exchange in that jurisdiction;
“Final Acceptance Date”	the latest time for acceptance of the Rights Shares
	anticipated as at the Latest Practicable Date to be 4:00
	p.m. on 23rd June, 2008, subject to postponement in
	such circumstances and in such manner as may be
	provided in the Prospectus (if at all), or such other
	time and date as may be agreed between the Company
	and the Underwriters;
“General Rules of CCASS”	the general rules of CCASS, as may be amended from
	time to time;
“Group”	the Company and its subsidiaries;
“Hennessy”	Hennessy Holdings Limited, a company incorporated
	in the British Virgin Islands with limited liability and
	a wholly-owned subsidiary of Lippo and was
	interested in 692,262,956 Shares, representing
	approximately 51.4% of the issued share capital of the
	Company as at the Latest Practicable Date;
“Hennessy’s Excess Application”	the application by Hennessy under the EAF for at least
	35,000,000 excess Rights Shares;
“HKSCC”	Hong Kong Securities Clearing Company Limited;
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC;
“Latest Practicable Date”	17th May, 2008, being the latest practicable date prior
	to the printing of this circular for ascertaining certain
	information contained in this circular;
“Lead Manager”	Somerley;
“Lippo”	Lippo Limited力寶有限公司, a company incorporated
	in Hong Kong with limited liability, the shares of
	which are listed on the Stock Exchange;

– 6 –

DEFINITIONS

“Lippo Rights Issue”	the rights issue of Lippo, details of which are set out
	in an announcement of Lippo dated 17th May, 2008;
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange;
“Overseas Shareholders”	Shareholders whose names appear on the register of
	members of the Company on the Record Date and
	whose addresses as shown on such register are outside
	Hong Kong;
“PAL(s)”	the provisional allotment letter(s) to be issued to the
	Qualifying Shareholders in respect of their assured
	entitlements under the Rights Issue;
“Posting Date”	the date on which the Prospectus Documents are sent
	to Qualifying Shareholders and, for information only,
	the Prospectus to the Excluded Shareholders, which is
	expected to be on 6th June, 2008, or such other date as
	may be agreed between the Company and the
	Underwriters;
“PRC”	the People’s Republic of China and for the purpose of
	this circular only, excludes Hong Kong, the Macao
	Special Administrative Region and Taiwan;
“Prospectus”	a prospectus document relating to the Rights Issue
	prepared in accordance with the requirements of the
	Listing Rules;
“Prospectus Documents”	the Prospectus, the PAL and the EAF to be issued by
	the Company to the Qualifying Shareholders in
	relation to the Rights Issue;
“Qualifying Shareholders”	the Shareholders whose names appear on the register
	of members of the Company on the Record Date, other
	than the Excluded Shareholders;
“Record Date”	5th June, 2008, the record date for determining
	entitlements of the Shareholders to participate in the
	Rights Issue;
“Rights Issue”	the issue by way of rights of 471,390,178 Rights Shares
	at the Subscription Price on the basis of seven Rights
	Shares for every twenty existing Shares held on the
	Record Date including the issue of the Bonus Warrants
	to successful applicants of the Right Shares, in each
	case on the terms and subject to conditions to be set
	out in the Prospectus Documents;
“Rights Share(s)”	new Share(s) to be allotted and issued pursuant to the
	Rights Issue;

– 7 –

DEFINITIONS

“SGM”	the special general meeting of the Company to be held
	on 5th June, 2008 at 10:30 a.m. (or so soon thereafter
	as the annual general meeting of the Company
	convened for 10:00 a.m. on the same date shall have
	been concluded or adjourned) (including any
	adjournment(s) thereof) to consider and, if thought fit,
	approve, inter alia, the resolutions in relation to the
	Capital Increase and the creation and issue of the
	Bonus Warrants and the issue and allotment of the
	Warrant Exercise Shares;
“Share(s)”	ordinary share(s) of HK$1.00 each in the share capital
	of the Company;
“Shareholders”	holders of the Share(s);
“Somerley”	Somerley Limited, a licensed corporation to carry on
	Type 1 (dealing in securities), Type 4 (advising on
	securities), Type 6 (advising on corporate finance) and
	Type 9 (asset management) regulated activities under
	the Securities and Futures Ordinance (Cap. 571 of the
	Laws of Hong Kong);
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Subscription Price”	the subscription price of HK$1.00 per Rights Share;
“Underwriters”	Somerley; Taifook Securities Company Limited; AIAB
	and, for and on behalf of its clients, Lippo Securities
	Limited;
“Underwritten Rights Shares”	Rights Shares (in the nil-paid form), with an aggregate
	amount of 194,098,156, other than those undertaken
	to be subscribed and applied by Hennessy (or failing
	which, by Lippo) pursuant to the Deed of Undertaking;
“Underwriting Agreement”	the underwriting agreement dated 17th May, 2008
	entered into between the Company and the
	Underwriters in relation to the Rights Issue;
“Warrant Exercise Shares”	new Shares to be allotted and issued pursuant to the
	exercise of the Bonus Warrants;
“s.q.m.”	square metre(s);
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong;
	and
“%”	per cent.

– 8 –

LETTER FROM THE BOARD

==> picture [79 x 37] intentionally omitted <==

HONGKONG CHINESE LIMITED 香港華人有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 655)

Non-executive Directors: Dr. Mochtar Riady (Chairman) Mr. Leon Chan Nim Leung

Executive Directors: Mr. Stephen Riady (Chief Executive Officer) Mr. John Lee Luen Wai, J.P. Mr. Kor Kee Yee

Independent Non-executive Directors:

Mr. Albert Saychuan Cheok Mr. Victor Yung Ha Kuk Mr. Tsui King Fai

Registered Office: Clarendon House Church Street Hamilton HM 11 Bermuda

Principal Place of Business: 24th Floor, Tower One Lippo Centre 89 Queensway Hong Kong

20th May, 2008

To the Shareholders

Dear Sir or Madam,

RIGHTS ISSUE OF 471,390,178 RIGHTS SHARES AT HK$1.00 EACH IN THE PROPORTION OF

INTRODUCTION

On 17th May, 2008, the Company announced that it intends to raise approximately HK$471 million, before expenses, by way of a rights issue of 471,390,178 Rights Shares at the Subscription Price of HK$1.00 per Rights Share on the basis of seven Rights Shares for every twenty existing Shares held on the Record Date. Successful applicants of the Rights Shares will receive three Bonus Warrants for every seven Rights Shares taken up. The Bonus Warrants will entitle the holders to subscribe for new Shares at an initial subscription price of HK$1.25 per Share (subject to adjustment) upon exercise of the Bonus Warrant.

* For identification purpose only

– 9 –

LETTER FROM THE BOARD

To facilitate the implementation of the proposed Rights Issue and to enhance flexibility of the Company for future equity financing activities, an ordinary resolution will be proposed at the SGM which, if passed, will increase the authorised share capital of the Company from HK$2,000,000,000 to HK$4,000,000,000 by the creation of 2,000,000,000 new shares of HK$1.00 each in the Company.

The Capital Increase and the creation and issue of the Bonus Warrants and the issue and allotment of the Warrant Exercise Shares are subject to shareholders’ approval at the SGM.

The purpose of this circular is to provide you with information in respect of the Rights Issue and to convene the SGM to be held on 5th June, 2008 to consider and, if thought fit, approve, inter alia, the resolutions in relation to the Capital Increase and the creation and issue of the Bonus Warrants and the issue and allotment of the Warrant Exercise Shares.

RIGHTS ISSUE

The Rights Issue statistics (prepared on the basis of the Company’s existing 1,346,829,094 Shares in issue, without taking into account any Shares which may be issued between the Latest Practicable Date and the Record Date) are as follows:

Number of Shares : 1,346,829,094 Shares in issue as at the Latest Practicable Date Basis of Rights Issue : Seven Rights Shares for every twenty Shares held on the Record Date. Successful applicants of the Rights Shares will receive three Bonus Warrants for every seven Rights Shares taken up. Number of Rights Shares : 471,390,178 Rights Shares Number of Bonus Warrants : Up to 202,024,362 Bonus Warrants which upon full exercise will result in the issue of up to 202,024,362 Warrant Exercise Shares at an initial subscription price of HK$1.25 per Share (subject to adjustment in accordance with the terms of the Bonus Warrants)

As at the Latest Practicable Date, the Company had in issue share options entitling holders to subscribe for 13,468,000 Shares from 17th June, 2008 to 16th December, 2012. Apart from this, as at the Latest Practicable Date, the Company did not have any other share options or convertible securities outstanding entitling any person to subscribe for Shares prior to the Record Date.

– 10 –

LETTER FROM THE BOARD

The Underwritten Rights Shares will be fully underwritten by the Underwriters on the terms and subject to the conditions as set out in the Underwriting Agreement, details of which are described in the section headed “Underwriting Agreement” below.

Reasons for the Rights Issue and use of proceeds

The Company and its subsidiaries are principally engaged in investment holding, property investment and development, project management and financial services.

The Company’s mission is to maintain and expand its role as a leading property investor and developer in Asia, targeting the key markets of the PRC, Singapore and Hong Kong. The timing of the Company’s entry into Singapore in 2004 has proved opportune, with substantial gains reflected in the 2007 results. Going forward, the Board will dedicate more resources to the PRC where it currently sees opportunities for a wellcapitalised group in view of the current restraints on funding. In particular, the Board plans to push forward its development project (“BDA Project”) in 北京經濟技術開發區 (Beijing Economic-Technological Development Area) (“BDA”). The BDA Project is located in the BDA, the state-level economic-technological development area in Beijing and approximately 10 miles southeast of Beijing City Centre. With a total site area of approximately 51,200 s.q.m., the BDA Project is currently planned to comprise office buildings, apartments, hotels and shopping malls with a total gross floor area of not less than 170,000 s.q.m.. A number of Fortune 500 companies and multinational companies have presence in the neighbourhood. As announced on 28th April, 2008, the Group has just increased its interest from 68.6% to 85.7% in the BDA Project, increasing its commitment to approximately HK$280 million in total. As announced before, the Group intends to acquire the remaining interest of the BDA Project (currently 14.3% of the BDA Project) from its joint venture partner. Completion of the BDA Project is expected to be in 2011.

The Group and its associates and jointly controlled entities will also continue its luxury residential development projects in Singapore such as:

	Expected sellable
Project	floor area	Expected completion
Sentosa Marina Collection	30,000 s.q.m.	late 2011
Kim Seng Plaza	16,000 s.q.m.	early 2012
Aura Park	5,000 s.q.m.	mid 2012

The expected net proceeds from the Rights Issue, after deduction of expenses, of approximately HK$463 million are intended to be applied as to (i) approximately HK$350 million for the BDA Project; (ii) approximately HK$100 million for property development projects in Singapore; and (iii) the remaining balance as additional capital for different future potential property development projects and for working capital.

– 11 –

LETTER FROM THE BOARD

Qualifying Shareholders

The Company will provisionally allot the Rights Shares and send a Prospectus containing details of the Rights Issue to the Qualifying Shareholders and, for information only, to the Excluded Shareholders. PALs and EAFs will be sent to the Qualifying Shareholders only.

To qualify for the Rights Issue, Shareholders must be registered as a member of the Company on the Record Date. Shareholders having an address in Hong Kong on the register of members of the Company on the Record Date are qualified for the Rights Issue. Shareholders having addresses outside Hong Kong on the register of members of the Company on the Record Date are qualified for the Rights Issue only if the Board, after taking appropriate legal advice in the relevant jurisdictions, considers that the offer to these Shareholders would not be impractical or unlawful on account of any legal restriction under the laws of the relevant jurisdiction or any requirement of the relevant regulatory body or stock exchange in that jurisdiction and/or any relevant registration or filing requirements.

Any Qualifying Shareholder holding less than 20 Shares on the Record Date will not be entitled to subscribe for any Rights Shares (with entitlement to Bonus Warrants).

Excluded Shareholders

Currently, the Company has Shareholders whose addresses as shown on the register of members of the Company are located outside Hong Kong. If there are Overseas Shareholders at the close of business on the Record Date, the Overseas Shareholders may not be eligible to take part in the Rights Issue as explained below.

The Board will make enquiries pursuant to Rule 13.36(2)(a) of the Listing Rules as to the applicable securities legislation of the relevant overseas jurisdictions or the requirements of any relevant regulatory body or stock exchange for the issue of the Rights Shares (with entitlement to Bonus Warrants) to the Overseas Shareholders and the results of the enquiries will be included in the Prospectus. If, after making such enquiries, the Board is of the opinion that it would be necessary or expedient, on account either of the legal restrictions under the laws of the relevant jurisdiction or any requirement of the relevant regulatory body or stock exchange in that jurisdiction, not to offer Rights Shares (with entitlement to Bonus Warrants) to any of the Excluded Shareholders, the Rights Issue will not be extended to the Excluded Shareholders and no provisional allotment of nil-paid Rights Shares or allotment of fully-paid Rights Shares will be made to such Overseas Shareholders. The Company will send the Prospectus to the Excluded Shareholders for their information only but will not send PALs or EAFs to them. The basis of exclusion of the Excluded Shareholders, if any, from the Rights Issue will be disclosed in the Prospectus.

– 12 –

LETTER FROM THE BOARD

The Prospectus Documents are not intended to be registered or filed under the applicable securities legislation of any jurisdiction other than Hong Kong. Arrangements will be made for the Rights Shares which would otherwise have been provisionally allotted to the Excluded Shareholders to be sold in the market in their nil-paid form as soon as practicable after dealings in the nil-paid Rights Shares commence on the Stock Exchange and in any event before the last date for dealings in nil-paid Rights Shares, if a premium (net of expenses) can be obtained. Proceeds of each sale, less expenses and stamp duty, of HK$100 or more will be paid to the relevant Excluded Shareholder in Hong Kong dollars. The Company will retain individual amounts of less than HK$100 for the benefit of the Company.

Overseas Shareholders should note that they may be entitled to vote at the SGM, and may or may not be entitled to the Rights Issue (with entitlement to Bonus Warrants), subject to the results of enquiries made by the Directors pursuant to Rule 13.36(2)(a) of the Listing Rules. Accordingly, Overseas Shareholders should exercise caution when dealing in the Shares.

Closure of register of members

The register of members of the Company will be closed from 2nd June, 2008 to 5th June, 2008 (both dates inclusive), during which period no transfer of Shares will be registered, for the purpose of determining the eligibility of voting at the SGM and the entitlement to the Rights Issue. In order to be entitled to vote at the SGM or to qualify for the Rights Issue, a Shareholder must be registered as a member of the Company on the Record Date. Accordingly, to qualify for the Rights Issue, all transfer of Shares accompanied by the relevant share certificates and transfer forms must be lodged for registration with the Company’s Branch Share Registrars in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 30th May, 2008.

Terms of the Rights Issue (including Bonus Warrants)

The Rights Issue will be on the basis of seven Rights Shares for every twenty Shares held on the Record Date and successful applicants of the Rights Shares will receive three Bonus Warrants for every seven Rights Shares taken up.

Subscription Price for Rights Shares

The Rights Issue is on the basis of the Subscription Price of HK$1.00 per Rights Share, which is payable in full when a Qualifying Shareholder accepts the provisional allotment of Rights Shares or applies for excess Rights Shares or when a transferee of nil-paid Rights Shares subscribed for the relevant Rights Shares.

The Subscription Price represents:

(i) a discount of approximately 32% to the closing price of HK$1.48 per Share as quoted on the Stock Exchange on 16th May, 2008, being the last trading day before the date of the Underwriting Agreement;

– 13 –

LETTER FROM THE BOARD

(ii) a discount of approximately 22% to the theoretical ex-rights price of HK$1.29 per Share, which is calculated based on the closing price of HK$1.48 per Share on 16th May, 2008; and
(iii) a discount of approximately 71% to the audited consolidated net assets value (attributable to the Shareholders after final dividend) per Share as at 31st December, 2007 of approximately HK$3.43.

Bonus Warrants and Bonus Warrants Subscription Price

On the basis that 471,390,178 Rights Shares to be issued and that the Bonus Warrants will be issued in the proportion of three Bonus Warrants for every seven Rights Shares, up to 202,024,362 Bonus Warrants will be issued, entitling the holders thereof to subscribe for up to 202,024,362 Shares, at an initial Bonus Warrants Subscription Price of HK$1.25 (subject to adjustment) per Warrant Exercise Share. The subscription period is approximately three years from the date when dealings in the Bonus Warrants commence on the Stock Exchange (which is expected to be from 4th July, 2008) to 4th July, 2011 (both dates inclusive)). The Bonus Warrants Subscription Price of HK$1.25 represents:

(i) a discount of approximately 16% to the closing price of HK$1.48 per Share as quoted on the Stock Exchange on 16th May, 2008, being the last trading day before the date of the Underwriting Agreement;
(ii) a discount of approximately 3% to the theoretical ex-rights price of HK$1.29 per Share, which is calculated based on the closing price of HK$1.48 per Share on 16th May, 2008; and
(iii) a discount of approximately 64% to the audited consolidated net assets value (attributable to the Shareholders after final dividend) per share as at 31st December, 2007 of approximately HK$3.43.

Based on 202,024,362 Bonus Warrants to be issued, the total cash proceeds upon full exercise of the Bonus Warrants are expected to be approximately HK$253 million.

Further details on the terms of the Bonus Warrants are set out in the appendix of this circular.

Fractions of the Rights Shares and the Bonus Warrants

The Company will not (i) provisionally allot fractions of Rights Shares in nilpaid form; or (ii) allot fractions of Bonus Warrants. All fractions of Rights Shares and Bonus Warrants will be aggregated and sold in the market for the Company’s own benefit. Any unsold fractions of the Rights Shares may be made available for excess application.

The Subscription Price and the Bonus Warrants Subscription Price have been determined based on arm’s length negotiations among the Company and the Underwriters. The Directors consider the terms of the Rights Issue (including the terms of the Bonus Warrants) to be fair and reasonable and in the interest of the Company and the Shareholders as a whole.

– 14 –

LETTER FROM THE BOARD

Rights Shares and Warrant Exercise Shares

The Rights Shares, when issued, will represent:

(i) approximately 35% of the existing total issued share capital of the Company;
(ii) approximately 26% of the total issued share capital of the Company as enlarged by the Rights Shares; and
(iii) approximately 23% of the total issued share capital of the Company as enlarged by the Rights Shares and the Warrant Exercise Shares.

When fully paid, the Rights Shares will rank pari passu in all respects with the then existing Shares.

The Warrant Exercise Shares, when issued, will represent:

(i) approximately 11% of the total issued share capital of the Company as enlarged by the Rights Shares; and
(ii) approximately 10% of the total issued share capital of the Company as enlarged by the Rights Shares and the Warrant Exercise Shares.

When issued, the Warrant Exercise Shares will rank pari passu in all respects with the then existing Shares.

Application for excess Rights Shares

Qualifying Shareholders may apply for any unsold entitlements of the Excluded Shareholders and any Rights Shares provisionally allotted but not accepted by the Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares. Application can be made by completing the EAF and lodging the same with remittance for the excess Rights Shares. The Directors will allocate the excess Rights Shares at their discretion and on a fair and equitable basis and will give preference to topping up odd lots to whole board lots. Any further remaining excess Rights Shares (if any) will be allocated to all applicants on a sliding scale with reference to the excess Rights Shares applied by them (i.e. Qualifying Shareholders belonging to pre-determined categories consisting of applications for smaller number of Rights Shares are allocated with a higher percentage of successful application but will receive less number of Rights Shares; whereas Qualifying Shareholders belonging to pre-determined categories consisting of applications for larger number of Rights Shares are allocated with a smaller percentage of successful application but will receive higher number of Rights Shares), subject always to the rights of the Directors to reject any applications with an intention to abuse the general mechanism of the excess application for the excess Rights Shares.

Shareholders with the Shares held by a nominee company should note that the Board will regard the nominee company as a single Shareholder according to the register of members of the Company. Accordingly, the Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to beneficial owners individually. Shareholders with their Shares held by a nominee company are advised to consider whether they would like to arrange registration of the relevant Shares in the name of the beneficial owner(s) prior to the close of the register of members as mentioned above.

– 15 –

LETTER FROM THE BOARD

Application for listing

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Rights Shares in both nil-paid and fully-paid forms, the Bonus Warrants and the Warrant Exercise Shares. All necessary arrangements, including an application, will be made to HKSCC to enable the Bonus Warrants and the Warrant Exercise Shares to be accepted by HKSCC as eligible securities for deposit, clearance and settlement in CCASS. The nil-paid Rights Shares shall have the same board lot size as the Shares, i.e. 2,000 shares in one board lot. The Bonus Warrants shall have 8,000 warrants in one board lot.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares, Bonus Warrants and the Warrant Exercise Shares on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Rights Shares, the Bonus Warrants and the Warrant Exercise Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Rights Shares and the Bonus Warrants on the Stock Exchange or such other date as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

No part of the share capital of the Company is listed or dealt in on any stock exchange other than the Stock Exchange and no such listing or permission to deal is being or proposed to be sought. The Rights Shares, the Bonus Warrants and the Warrant Exercise Shares will not be listed or traded on any stock exchange other than the Stock Exchange and no such listing permission to deal is being or proposed to be sought.

Stamp duty and any other applicable fees and charges

Dealings in the Rights Shares in their nil-paid and fully-paid forms, the Bonus Warrants and the Warrant Exercise Shares will be subject to the payment of stamp duty, Stock Exchange trading fee, Securities and Futures Commission transaction levy and any other application fees and charges in Hong Kong.

Deed of Undertaking

Hennessy and Lippo have entered into the Deed of Undertaking in favour of the Company, pursuant to which, (i) Hennessy has undertaken to the Company that it will subscribe and procure the subscription of 242,292,022 Rights Shares (with entitlement to Bonus Warrants) that will be provisionally allotted to it under the Rights Issue and that it will apply under Hennessy’s Excess Application; and (ii) Lippo has guaranteed the due performance of Hennessy under the Deed of Undertaking, or failing which, Lippo undertakes to subscribe and procure the subscription of such Rights Shares that will be provisionally allotted to Hennessy under the Rights Issue and Hennessy’s Excess Application.

No preferential treatment will be given to Hennessy in the allocation of the excess Rights Shares, if any.

– 16 –

LETTER FROM THE BOARD

Conditions precedent to the Rights Issue

The Rights Issue is conditional upon the following:

(i) the delivery by or on behalf of the Company on or before the Posting Date of (a) one copy of each of the duly signed Prospectus Documents together with any requisite accompanying documents, to the Stock Exchange and the Registrar of Companies in Hong Kong for filing and registration in accordance with the provisions of the Hong Kong Companies Ordinance; and (b) one copy of the duly certified Prospectus Documents together with any requisite accompanying documents, to the Registrar of Companies in Bermuda for filing in accordance with the Companies Act 1981 of Bermuda (as amended);
(ii) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) listing of and permission to deal in (a) all the Rights Shares (in their nil-paid and fully-paid forms) before 9:00 a.m. on the date of commencement of dealing in the nil-paid Rights Shares on the Stock Exchange and not having withdrawn or revoked such listings and permission and (b) the Bonus Warrants and the Warrant Exercise Shares before 9:00 a.m. on the date of commencement of dealing in the Bonus Warrants and the Warrant Exercise Shares on the Stock Exchange and not having withdrawn or revoked such listings and permission;
(iii) the Bermuda Monetary Authority granting consent (if required) to the issue of the Rights Shares by no later than the Posting Date;
(iv) the passing of resolution(s) by the Shareholders at the SGM to approve (a) the creation and issue of the Bonus Warrants and the issue and allotment of the Warrant Exercise Shares (upon exercise of the subscription rights attaching to the Bonus Warrants) and (b) the Capital Increase;
(v) the posting of the Prospectus Documents to the Qualifying Shareholders and of the Prospectus, for information purposes only, to the Excluded Shareholders on the Posting Date;
(vi) compliance with and performance of all the undertakings and obligations of the Company under the terms of the Underwriting Agreement;
(vii) compliance with and performance by Hennessy and Lippo under the Deed of Undertaking;
(viii) the passing of a resolution by the shareholders of Lippo at an extraordinary general meeting to approve the Lippo Rights Issue to the qualifying shareholders of Lippo only and the creation and issue of bonus warrants and issue and allotment of the warrant exercise shares (upon exercise of the subscription rights attaching to the Lippo bonus warrants) under the Lippo Rights Issue;

– 17 –

LETTER FROM THE BOARD

(ix) the Lippo Rights Issue being unconditional in all respects (save in respect of any matter or condition relating to the Rights Issue); and
(x) the obligations of the Underwriters not being terminated by the Lead Manager (on behalf of the Underwriters) in accordance with the terms as set out in the Underwriting Agreement.

If the conditions precedent are not satisfied and/or waived by 27th June, 2008 (unless otherwise stated as above) or such later date or dates as the Lead Manager (on behalf of the Underwriters) may agree with the Company in writing, the Underwriting Agreement shall terminate (save in respect of any reasonable legal fees and other reasonable out-ofpocket expenses, if any, of the Underwriters, or any rights or obligations which may accrue under the Underwriting Agreement and/or the Deed of Undertaking prior to such termination) and no party will have any claim against the other party for costs, damages, compensation or otherwise.

UNDERWRITING AGREEMENT

Key terms and details of the Underwriting Agreement are as set out below:

Date : 17th May, 2008 Underwriters : Somerley; Taifook Securities Company Limited; AIAB, and for and on behalf of its clients, Lippo Securities Limited; Number of Underwritten : 194,098,156 Rights Shares Rights Shares (on the basis of the Shares in issue as at the Latest Practicable Date) Commission : 2.5% of the aggregate Subscription Price of all the Underwritten Rights Shares

The obligations of the Underwriters under the Underwriting Agreement are several but not joint and several.

To the best of the Directors’ knowledge and information and after making reasonable enquiries, each of the Underwriters and their respective ultimate beneficial owners are not connected persons (as defined in the Listing Rules) of the Company.

Underwriting

Subject to the fulfillment of the conditions contained in the Underwriting Agreement, the Underwriters have agreed to underwrite 194,098,156 Rights Shares and will receive underwriting commission of 2.5% on the aggregate Subscription Price of the Underwritten Rights Shares. Based on the number of Shares outstanding and the number of Shares held by Hennessy as at the Latest Practicable Date, such underwriting commission amounts to approximately HK$5 million. The Underwriters will also be entitled to receive three Bonus Warrants for every seven Rights Shares to be subscribed (if any) in accordance with the terms of the Rights Issue and pursuant to the Underwriting Agreement.

– 18 –

LETTER FROM THE BOARD

Conditions to the Underwriting Agreement

The Underwriting Agreement is conditional, among other things, on the following conditions being fulfilled:

(i) the Lippo Rights Issue becoming unconditional in all respects (save in respect of any matter or condition relating to the Rights Issue), not being terminated in accordance with its terms and any underwriting agreement entered or to be entered into by Lippo with any underwriter(s) in connection with the Lippo Rights Issue becoming unconditional (save in respect of any matter or condition relating to the Rights Issue) and not being terminated in accordance with its terms;
(ii) the passing of the ordinary resolutions by Shareholders at the SGM (or any adjournment(s) thereof), to approve (a) the Capital Increase, (b) the creation and issue of the Bonus Warrants and (c) to authorise the Directors to the issue and allotment of the Warrant Exercise Shares;
(iii) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment), and not having revoked, the listing of, and permission to deal in, (a) the Rights Shares in their nil-paid form and fully-paid form by not later than 9:00 a.m. on 11th June, 2008 and (b) the Bonus Warrants and the Warrant Exercise Shares not later than 9:00 a.m. on 4th July, 2008;
(iv) the delivery to the Stock Exchange and registration by the Registrar of Companies in Hong Kong not later than the Posting Date of one copy of each of the Prospectus Documents each duly certified by two of the Directors or by their agents authorised in writing as having been approved by resolution by the Board (and all documents required to be attached thereto, if any) in compliance with the Listing Rules and the Companies Ordinance (Cap. 32 of the Laws of Hong Kong);
(v) the obtaining of all requisite consents and approvals from the relevant regulatory authorities in connection with the Rights Issue and the issue of Bonus Warrants (if any) in Hong Kong or elsewhere;
(vi) the posting of the Prospectus Documents to the Qualifying Shareholders;
(vii) the delivery to the Underwriters of those documents listed in the Underwriting Agreement, when specified therein;
(viii) the filing of one duly certified (by or on behalf of each Director) copy of the Prospectus Documents with the Registrar of Companies in Bermuda;
(ix) the representations and warranties mentioned in the Underwriting Agreement remaining true and accurate in all material aspects at all times on or before 4:00 p.m. on the second business day following the Final Acceptance Date; and
(x) fulfilment of the obligations of Hennessy and of Lippo under the Deed of Undertaking.

– 19 –

LETTER FROM THE BOARD

The Underwriters may grant extension for the fulfillment or waive any of the conditions mentioned above (save and except that conditions (ii), (iii), (iv), (v), (vi) and (vii) cannot be waived). In the event of the conditions precedent mentioned above not being fulfilled or waived on or before the respective times and/or dates aforesaid (or such later date or dates as may be agreed between the Company and the Lead Manager (on behalf of the Underwriters)) or if the Underwriting Agreement shall be rescinded, all obligations and liabilities of the parties thereunder will forthwith cease and determine.

Termination of the Underwriting Agreement

The Underwriting Agreement may be terminated by notice in writing given by the Lead Manager (on behalf of the Underwriters) to the Company at any time prior to 4:00 p.m. on the second business day following the Final Acceptance Date, i.e. 25th June, 2008 on the occurrence of the following force majeure events:

(i) the success of the Rights Issue or the taking up of the Rights Shares may be adversely and materially affected by:
(a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may materially adversely affect the business or the financial or trading position of the Group as a whole; or
(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date of the Underwriting Agreement) of a political, military, financial, economic, currency or other nature (whether or not unique with any of the foregoing), or any local, national or international outbreak or escalation of hostilities or armed conflict, or any event or change affecting local securities market or the occurrence of any combination of circumstances which is reasonably likely to materially adversely affects the business or the financial or trading position of the Group as a whole or is reasonably likely to materially adversely prejudices the success of the Rights Issue or the taking up of the Rights Shares (with entitlement to Bonus Warrants) by the Shareholders or investors in general; or
(c) there is any material adverse change in the business or in the financial or trading position of the Group as a whole; or
(d) any breach of the warranties of the Company set out in the Underwriting Agreement; or
(ii) any material change in market conditions or combination of market conditions and other circumstances in Hong Kong or elsewhere (including without limitation suspension or material restriction on trading in securities in general or the Company in particular) occurs which may adversely and materially affect the success of the Rights Issue or the taking up of the Rights Shares (with entitlement to Bonus Warrants) by the Shareholders or investors in general.

– 20 –

LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE

Set out below is the shareholding structure of the Company:

Hennessy Directors Underwriters_(Note)_ Sub-total Public Shareholders Total number of issued shares	As at the Latest Practicable Date Shares % 692,262,956 51.4 50,400 0.0 – 0.0 692,313,356 51.4 654,515,738 48.6 1,346,829,094 100.0	Immediately upon Completion assuming all Qualifying Shareholders take up their respective entitlements under the Rights Issue but before the exercise of the Bonus Warrants Shares % 934,554,978 51.4 68,040 0.0 – 0.0 934,623,018 51.4 883,596,254 48.6 1,818,219,272 100.0	Immediately upon Completion assuming all Qualifying Shareholders take up their respective entitlements under the Rights Issue and after the exercise of the Bonus Warrants Shares % 1,038,394,416 51.4 75,600 0.0 – 0.0 1,038,470,016 51.4 981,773,618 48.6 2,020,243,634 100.0	Immediately upon Completion assuming only Hennessy takes up its entitlement under the Rights Issue and the Hennessy’s Excess Application but before the exercise of the Bonus Warrants Shares % 969,554,978 53.3 50,400 0.0 194,098,156 10.7 1,163,703,534 64.0 654,515,738 36.0 1,818,219,272 100.0	Immediately upon Completion assuming only Hennessy takes up its entitlement under the Rights Issue and the Hennessy’s Excess Application and after the exercise of the Bonus Warrants Shares % 1,088,394,416 53.9 50,400 0.0 277,283,080 13.7 1,365,727,896 67.6 654,515,738 32.4 2,020,243,634 100.0

Note: As there are more than one Underwriters and each of the Underwriters will underwrite, on a several basis, not more that 50% of the Underwritten Rights Shares, no single Underwriter will take up more than 10% of the then issued share capital of the Company in any event.

WARNING OF THE RISKS OF DEALING IN SHARES AND NIL-PAID RIGHTS SHARES

The Rights Issue is subject to the satisfaction of the conditions as described under the paragraph headed “Rights Issue – Conditions precedent to the Rights Issue” above. In particular, the Underwriting Agreement contains provisions allowing the Underwriters to terminate the Underwriting Agreement on the occurrence of force majeure events (as described in the paragraph headed “Underwriting Agreement – Termination of the Underwriting Agreement”) by giving written notice to the Company at any time prior to 4:00 p.m. on the second business day following the Final Acceptance Date, i.e. 25th June, 2008. Accordingly, any dealings in the Shares before the Underwriting Agreement becomes unconditional and in the Rights Shares in their nil-paid form from 11th June, 2008 to 18th June, 2008 (both dates inclusive) will bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating selling or acquiring Shares and/or Right Shares in their nil-paid form from the date of this circular up to 27th June, 2008 will bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating any dealings in the Shares or Rights Shares in their nil-paid form are recommended to consult their own professional advisers.

– 21 –

LETTER FROM THE BOARD

SGM

To facilitate the implementation of the proposed Rights Issue and to enhance flexibility of the Company for future equity financing activities, the Directors propose that a resolution be passed at the SGM to, among other things, increase the authorised share capital of the Company from HK$2,000,000,000 to HK$4,000,000,000 by the creation of 2,000,000,000 new Shares of HK$1.00 each.

The Capital Increase and the creation and issue of the Bonus Warrants and the issue and allotment of the Warrant Exercise Shares are subject to Shareholders’ approval at the SGM. A notice of the SGM is included in this circular.

On the basis that there is no Shareholder having an interest in the Capital Increase and the creation and issue of the Bonus Warrants and the issue and allotment of the Warrant Exercise Shares which is different from other Shareholders, no Shareholders are required to abstain from voting in the SGM.

A form of proxy for use at the SGM is enclosed. Whether or not you are able to attend the SGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s principal place of business at 24th Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding such meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjourned meeting should you so wish.

PROCEDURES FOR DEMANDING A POLL AT GENERAL MEETINGS

Under the Company’s Bye-laws, at any general meeting of the Shareholders a resolution shall be decided on a show of hands unless voting by way of a poll is required by the rules of the Stock Exchange or a poll is (before or on the declaration of the result of the show of hands) demanded by:

(a) the chairman of the meeting; or
(b) at least three Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or
(c) a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or
(d) a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

– 22 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors (including the independent non-executive Directors) believe that the proposed Capital Increase, the creation and issue of the Bonus Warrants and the issue and allotment of the Warrant Exercise Shares are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolutions to be proposed at the SGM.

Yours faithfully, By Order of the Board HONGKONG CHINESE LIMITED John Lee Luen Wai Director

– 23 –

APPENDIX

SUMMARY OF THE TERMS OF THE BONUS WARRANTS

The Bonus Warrants are proposed to be created and constituted by an instrument by way of deed poll to be executed by the Company (the “ Instrument ”) and will be issued in registered form and will form one class and rank pari passu in all respects with each other.

The Bonus Warrants represent direct obligations of the Company to the registered holders for the time being of the Bonus Warrants (the “ Warrantholders ”). The principal terms and conditions of the Bonus Warrants will be set out in the certificates for the Bonus Warrants (the “ Warrant Certificates ”). The Warrantholders shall be entitled to the benefit of, be bound by, and be deemed to have notice of all the provisions of the Instrument, a copy of which will be available for inspection during normal business hours at the registered office of the Company or such other place as may be notified to the Warrantholders from time to time. The principal provisions of the Instrument are summarised below.

1. Subscription

(a) The Warrantholder shall have rights (the “ Subscription Rights ”) to subscribe in cash for fully-paid Shares but not in respect of any fraction of a Share at a price (subject to the adjustments referred to below) of HK$1.25 per Share (the “ Subscription Price ”). Each Warrantholder is entitled to exercise the Subscription Rights to subscribe for Shares, in whole or in part, in integral multiples of the Subscription Price, of such amount stated on the Warrant Certificate upon exercise of the Subscription Rights represented thereby (the “ Exercise Moneys ”) for fully-paid Shares at the Subscription Price per Share. The Subscription Rights attaching to the Bonus Warrants held by a Warrantholder may be exercised, in respect of all or part of the Bonus Warrants so held, at any time between the date when dealings in the Bonus Warrants on the Stock Exchange commence (which is expected to be 4th July, 2008) until the third anniversary thereof (which is expected to be 4th July, 2011) (both dates inclusive) (the “ Subscription Period ” and the date on which any of the Subscription Rights is duly exercised is called a “ Subscription Date ”). Any Subscription Rights which have not been exercised during or before the end of the Subscription Period will thereafter lapse and the relevant Warrants will cease to be valid for any purpose.
(b) The entitlement of the Warrantholders to their Warrants will be evidenced by the Warrant Certificates, each of which will contain a subscription form. In order to exercise in whole or in part the Subscription Rights represented by the Warrant Certificate, the Warrantholder must complete and sign the subscription form (which shall be irrevocable) and deliver the same together with the Warrant Certificate to the warrant registrar of the Company for the time being (the “ Registrar ”), together with a remittance for the Exercise Moneys (or, in the case of a partial exercise, the relevant portion of the Exercise Moneys). In each case, compliance must also be made with any exchange control, fiscal or other laws or regulations for the time being applicable.

– 24 –

APPENDIX

SUMMARY OF THE TERMS OF THE BONUS WARRANTS

(c) No fraction of a Share will be allotted and any balance representing fraction of the Subscription Price paid on the exercise of Subscription Rights will be retained by the Company for its own benefit, provided that if the Subscription Rights comprised in two or more Warrant Certificates are exercised by a Warrantholder on the same Subscription Date then, for the purpose of determining whether any (and if so what) fraction of a Share arises, the Subscription Rights represented by such Warrant Certificates shall be aggregated.
(d) The Company undertakes in the Instrument that Shares falling to be issued upon the exercise of the Subscription Rights will be issued and allotted not later than ten (10) business days after the relevant Subscription Date and unless adjustment thereof has been made as provided in Clause 4 of the Instrument, will rank pari passu in all respects with the fully-paid Shares in issue on the relevant Subscription Date and accordingly shall entitle the holders thereof to participate in all dividends and/or other distributions declared, paid or made and/or offers of further securities made by the Company on or after the relevant Subscription Date and other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date (as defined in the Instrument) therefor is on or before the relevant Subscription Date and notice of the amount and record date therefor has been given to the Stock Exchange prior to the relevant Subscription Date.
(e) As soon as practicable after the relevant allotment of Shares (and not later than ten (10) business days after the relevant Subscription Date), there will be issued free of charge to the Warrantholder(s) to whom such allotment has been made upon his exercise of any Subscription Rights:
(i) a certificate (or certificates) for the relevant Shares in the name(s) of such Warrantholder(s);
(ii) (if applicable) a balancing Warrant Certificate in registered form in the name(s) of such Warrantholder(s) in respect of any Subscription Rights represented by the Warrant Certificate(s) and remaining unexercised; and
(iii) (if applicable) a certificate of any balance of fractions of Subscription Price paid on exercise of the Subscription Rights which is retained by the Company as mentioned in sub-paragraph (c) above.

The certificate(s) for Shares arising on the exercise of Subscription Rights, the balancing Warrant Certificate (if any) and the certificate mentioned in subparagraph (e)(iii) above (if any) will be sent by post at the risk of such Warrantholder(s) to the address of such Warrantholder(s) or (in the case of a joint holding) to that one of them whose name stands first on the register of Warrantholders. If the Company agrees, such certificates may by prior arrangement be retained by the Registrars to await collection by the relevant Warrantholder(s).

– 25 –

APPENDIX SUMMARY OF THE TERMS OF THE BONUS WARRANTS

2. Adjustment of Subscription Price and/or Subscription Rights

The Instrument contains detailed provisions relating to the adjustment of the Subscription Price and/or Subscription Rights. The following is a summary of, and is subject to, the detailed provisions of the Instrument:

(a) The Subscription Price shall (except as provided otherwise in sub-paragraphs (b), (c), (d), (e) and (g) below) be adjusted as provided in the Instrument in each of the following cases:
(i) an alteration of the nominal amount of the Shares by reason of any consolidation or sub-division;
(ii) an issue (other than in lieu of a cash dividend) by the Company of Shares credited as fully paid by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve fund);
(iii) Capital Distribution (as defined in the Instrument) being made by the Company, whether on a reduction or redemption of capital or otherwise (except pursuant to a purchase by the Company of Shares), to holders of Shares (in their capacity as such);
(iv) a grant by the Company to the holders of Shares (in their capacity as such) of rights to acquire cash assets of the Company or any of its Subsidiaries (as defined in the Instrument);
(v) an offer or grant being made by the Company to holders of Shares (in their capacity as such) of Shares by way of rights or of options or warrants to subscribe for Shares at a price which is less than 90 per cent. of the market price (calculated as provided in the Instrument);
(vi) an issue wholly for cash being made by the Company or any other company of securities convertible into or exchangeable for or carrying rights of subscription for new Shares, if in any case the Total Effective Consideration per Share (as defined in the Instrument) is less than 90 per cent. of the market price (calculated as provided in the Instrument), or the terms of any such issue being altered so that the said Total Effective Consideration per Share is less than 90 per cent. of the market price (calculated as provided in the Instrument);
(vii) an issue being made wholly for cash of Shares at a price less than 90 per cent. of the market price (calculated as provided in the Instrument); and

– 26 –

APPENDIX

SUMMARY OF THE TERMS OF THE BONUS WARRANTS

(viii) the purchase by the Company of Shares or securities convertible into Shares or any rights to acquire Shares (excluding any such purchases made on the Stock Exchange or any other stock exchange recognised for this purpose by the Securities and Futures Commission of Hong Kong or equivalent authority and the Stock Exchange) in circumstances where the Directors consider that it may be appropriate to make an adjustment to the Subscription Price.
(b) Except as mentioned in sub-paragraph (c) below, no such adjustment as is referred to in sub-paragraph (a) above shall be made in respect of:
(i) an issue of fully paid Shares upon the exercise of any conversion, exchange or subscription rights attaching to securities wholly or partly convertible into Shares or exchangeable for Shares or upon the exercise of any rights (including the Subscription Rights) to acquire Shares;
(ii) an issue by the Company of Shares or other securities of the Company or any of its subsidiaries or a grant of rights to acquire Shares pursuant to a Share Option Scheme (as defined in the Instrument);
(iii) an issue by the Company of Shares or by the Company or any of its subsidiaries of securities wholly or partly convertible into or exchangeable for carrying rights to acquire Shares, in any such case in consideration or part consideration for the acquisition of any other securities, assets or business;
(iv) an issue of fully paid Shares by way of capitalisation of all or part of the Subscription Right Reserve (as defined in the Instrument) to be established in certain circumstances pursuant to the terms and conditions contained in the Instrument (or any similar reserve which has been or may be established pursuant to the terms of any other securities wholly or partly convertible into or exchangeable for carrying rights to acquire Shares); or
(v) an issue of Shares in lieu of a cash dividend where an amount not less than the nominal amount of the Shares so issued is capitalised and the market value (calculated as provided in the Instrument) of such Shares is not more than 110 per cent. of the amount of dividend which holders of Shares could elect to or would otherwise receive in cash.
(c) Notwithstanding the provisions referred to in sub-paragraphs (a) and (b) above, in any circumstance where the Company shall consider that an adjustment to the Subscription Price provided for under the said provisions should not be made or should be calculated on a different basis or that an adjustment to the Subscription Price should be made notwithstanding that no such adjustment is required under the said provisions, the Company may appoint an approved merchant bank (as defined in the Instrument) or the Auditors (as defined in

– 27 –

APPENDIX SUMMARY OF THE TERMS OF THE BONUS WARRANTS

the Instrument) to consider whether for any reason whatever the adjustment to be made (or the absence of adjustment) would not or might not fairly and appropriately reflect the relative interests of the persons affected thereby and, if such approved merchant bank or the Auditors shall consider this to be the case, the adjustment shall be modified or nullified or an adjustment made instead of no adjustment in such manner (including, without limitation, making an adjustment calculated on a different basis) as shall be certified by such approved merchant bank or the Auditors to be in its opinion appropriate.

(d) Any modification or adjustment of any rights or rate of conversion, exchange or subscription attaching to any securities issued by the Company or any of its subsidiaries prior to the issue of the Bonus Warrants which by their terms are wholly or partly convertible into or exchangeable for or carry rights to subscribe for new fully paid-up Shares shall not affect the Subscription Price of the Bonus Warrants in any respect whatsoever.
(e) Any adjustment to the Subscription Price shall be made to the nearest one cent so that any amount under half a cent shall be rounded down and any amount of half a cent or more shall be rounded up. No adjustment shall be made to the Subscription Price in any case in which the amount by which the same would be reduced would be less than one cent and any adjustment which would otherwise then be required shall not be carried forward. No adjustment may be made (except on a consolidation of Shares into Shares) which would increase the Subscription Price.
(f) Every adjustment to the Subscription Price will be certified to be fair and appropriate by the Auditors or an approved merchant bank and notice of each adjustment (giving the relevant particulars) will be given to the Warrantholders. Any such certificates of the Auditors or approved merchant bank will be available for inspection at the principal place of business for the time being of the Company, where copies may be obtained.
(g) No adjustments or modifications to the Subscription Price shall become effective unless and until the event(s) triggering such adjustments or modifications shall have become unconditional and effective.

3. Registered Warrants

The Bonus Warrants will be issued in registered form. The Company shall be entitled to treat the registered holder(s) of any Warrants as the absolute owner(s) thereof and accordingly shall not, except as ordered by a court of competent jurisdiction or as required by law, be bound to recognise any equitable or other claim to or interest in such Warrants on the part of any other person, whether or not the Company has express or other notice thereof.

– 28 –

APPENDIX

SUMMARY OF THE TERMS OF THE BONUS WARRANTS

4. Transfer, transmission and registration

The Bonus Warrants will be transferable, in whole amounts or integral multiples of the Subscription Price for the time being in force, by instrument of transfer in any usual or common form or in any other form which may be approved by the Directors. The Company shall maintain a register of Warrantholders accordingly. Transfers of Warrants must be executed by both the transferor and the transferee. Where the transferor or the transferee is HKSCC Nominees Limited (or such other company as may be approved by the Directors for that purpose), the transfer may be executed under the hand of an authorised person or by machine imprinted signatures. The provisions of the Company’s Bye-laws relating to the registration, transmission and transfer of Shares shall, mutatis mutandis, apply to the registration, transmission and transfer of the Bonus Warrants.

Persons who hold the Bonus Warrants and have not registered the Bonus Warrants in their own names and wish to exercise the Bonus Warrants should note that they may incur additional costs and expenses in connection with any expedited re-registration of the Bonus Warrants prior to the transfer or exercise of the Bonus Warrants, in particular during the period commencing ten (10) business days, or any period from time to time fixed by the Listing Rules or other rules or regulations of other relevant regulatory authorities for standard securities registration service, prior to and including the last day of the Subscription Period.

5. Closure of register of Warrantholders

The Register (as defined in the Instrument) may be closed from time to time, subject to the same restrictions, mutatis mutandis, as apply to the closure of the register of members of the Company under the Company’s Bye-laws and the Companies Act 1981 of Bermuda (as amended from time to time). Any exercise of Subscription Rights during the period for which the register of Warrantholders is closed shall be deemed to be and shall be effective upon the first day upon which the register of Warrantholders reopens and such date shall be deemed to be the relevant Subscription Date for all purposes in respect of such exercise of Subscription Rights.

6. Purchase and cancellation

The Company or any of its subsidiaries may at any time purchase Warrants:

(a) in the open market or by tender (available to all Warrantholders alike) at any price; or
(b) by private treaty at a price, exclusive of expenses, not exceeding 110 per cent. of the closing price on the Stock Exchange per Warrant for one or more board lots of Warrants prior to the date of purchase of the Bonus Warrants on the Stock Exchange, but not otherwise.

All Warrants purchased as aforesaid shall be cancelled forthwith and may not be reissued or re-sold.

– 29 –

APPENDIX

SUMMARY OF THE TERMS OF THE BONUS WARRANTS

7. Meetings of Warrantholders and modification of rights

(a) The Instrument contains provisions for convening meetings of Warrantholders to consider any matter affecting the interests of Warrantholders, including the modification by Special Resolution (as defined in the Instrument) of the provisions of the Instrument and/or of the terms and conditions endorsed on the Warrant Certificates. A Special Resolution duly passed at any such meeting of Warrantholders shall be binding on the Warrantholders, whether present or not.
(b) All or any of the rights for the time being attached to the Bonus Warrants (including any of the provisions of the Instrument) may from time to time (whether or not the Company is being wound up) be altered or abrogated (including, but without prejudice to that generality by waiving compliance with, or by waiving or authorising any past or proposed breach of, any of the provisions of the terms and conditions endorsed on the Warrant Certificates and/or the Instrument) with the prior sanction of a Special Resolution and may be effected only by deed poll executed by the Company and expressed to be supplemental to the Instrument.

8. Quorum

A quorum of a meeting of Warrantholders will be two or more persons holding Warrants and/or being proxies.

9. Replacement of Warrant certificates

If a Warrant Certificate is mutilated, defaced, lost or destroyed, it may, at the discretion of the Company, be replaced at the office of the Registrars on payment of such costs as may be incurred in connection therewith and on such terms as to evidence, indemnity and/or security as the Company may require and on payment of such fee not exceeding HK$2.50 (or such higher fee as may from time to time be permitted by the Stock Exchange) as the Company may determine. Mutilated or defaced Warrant Certificates must be surrendered before replacements will be issued.

10. Protection of Subscription Rights

The Instrument contains certain undertakings by and restrictions on the Company designed to protect the Subscription Rights.

11. Call

If at any time during the Subscription Period the aggregate of the value of the Subscription Rights represented by the Warrants for the time being outstanding is equal to or less than 10 per cent. of the aggregate value of the Subscription Rights attached to all the Bonus Warrants issued under the Instrument, then the Company may, on giving not less than three months’ notice, require Warrantholders either to exercise their Subscription

– 30 –

APPENDIX

SUMMARY OF THE TERMS OF THE BONUS WARRANTS

Rights or to allow them to lapse. On expiry of such notice, all unexercised Warrants will be automatically cancelled without compensation to Warrantholders.

12. Further issues

The Company shall be at liberty to issue further warrants or other securities convertible into, exchangeable for or carrying rights to subscribe for Shares in such manner and on such terms as it sees fit.

13. Undertakings by the Company

The Company undertakes in the Instrument, amongst other things, that:

(a) upon the exercise of any Subscription Rights it will within ten (10) business days after the relevant Subscription Date allot and issue the number of Shares for which subscription is made;
(b) all Shares so allotted shall rank pari passu in all respect with the fully paid Shares in issue on the relevant Subscription Date and shall accordingly entitle the holders to participate in full in all dividends or other distributions paid or made on the Shares after the relevant Subscription Date other than any dividend or other distribution previously declared, or recommended or resolved to be paid or made if the record date therefor shall be on or before the relevant Subscription Date and notice of the amount and record date for which shall have been given to the Stock Exchange prior to the relevant Subscription Date;
(c) subject to certain specified events referred to in the Instrument, it will use its best endeavours to ensure that all Shares allotted on exercise of Subscription Rights shall be admitted to listing on the Stock Exchange;
(d) it will send to each Warrantholder (or, in the case of joint Warrantholders, to the Warrantholder whose name stands first in the Register in respect of the Warrant held by such joint Warrantholders) at the same time as the same are sent to the holders of Shares, its audited accounts and all other notices, reports and communications despatched by it to the holders of the Shares generally; and
(e) it will pay all Hong Kong stamp duties, registration fees or similar charges in respect of the execution of the Instrument, the creation and initial issue of the Bonus Warrants in registered form, the exercise of the Subscription Rights and the issue of Shares upon exercise of the Subscription Rights.

– 31 –

APPENDIX

SUMMARY OF THE TERMS OF THE BONUS WARRANTS

14. Overseas Warrantholders

None of the Subscription Rights attaching to the Bonus Warrants may be exercised by any person and/or Warrantholder whose registered address is in or who is a national of or is resident in any territory other than Hong Kong where, the allotment of Shares to such Warrantholder upon exercise of any Subscription Rights would or may in the absence of compliance with registration or any other special formalities in such territory, be unlawful, impractical or inexpedient (to be determined at the discretion of the Directors) taking into account the laws and regulations of such territory or Hong Kong and each exercise of Subscription Rights by any other Warrantholder resident outside Hong Kong shall constitute a confirmation that all necessary governmental or other consents or approvals have been obtained or formalities observed by the person so exercising.

15. Winding up of the Company

(a) In the event a notice is given by the Company to its shareholders to convene a shareholders’ meeting for the purpose of considering and, if thought fit, approving a resolution to wind-up the Company voluntarily, every Warrantholder shall be entitled by irrevocable surrender of his Warrant Certificate(s) to the Company with the Subscription Form(s) duly completed, together with payment of the Exercise Moneys or the relative portion thereof (such Subscription Form(s) and Exercise Moneys to be received by the Company not less than two (2) business days prior to the proposed shareholders’ meeting) to be allotted and issued, as soon as possible and in any event no later than the day immediately prior to the date of the proposed shareholder’s meeting, the Shares which fall to be issued pursuant to the exercise of the relevant Subscription Rights.
(b) If an effective resolution is passed during the Subscription Period for the voluntary winding-up of the Company for the purpose of reconstruction or amalgamation pursuant to a scheme of arrangement to which the Warrantholders, or some persons designated by them for such purpose by Special Resolution, shall be a party or in conjunction with which a proposal is made to the Warrantholders and is approved by Special Resolution, the terms of such scheme of arrangement or (as the case may be) proposal shall be binding on all the Warrantholders.

Subject to the foregoing, if the Company is wound up, all Subscription Rights which have not been exercised at the date of the passing of such resolution shall lapse and each Warrant Certificate shall cease to be valid for any purpose.

16. Governing Laws

The Instrument and the Bonus Warrants are governed by and shall be construed in accordance with the laws of Hong Kong.

– 32 –

NOTICE OF THE SPECIAL GENERAL MEETING

==> picture [79 x 37] intentionally omitted <==

HONGKONG CHINESE LIMITED 香港華人有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 655)

NOTICE IS HEREBY GIVEN that the Special General Meeting of Hongkong Chinese Limited (the “Company”) will be held at Granville Room, Lower Lobby, Conrad Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Thursday, 5th June, 2008 at 10:30 a.m. (or so soon thereafter as the annual general meeting of the Company convened for 10:00 a.m. on the same date shall have been concluded or adjourned) for the purpose of considering and, if thought fit, passing the following resolutions (with or without modification) as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

(1) “THAT:
(a) the authorised ordinary share capital of the Company be increased from HK$2,000,000,000 divided into 2,000,000,000 shares of par value of HK$1.00 each to HK$4,000,000,000 divided into 4,000,000,000 shares of par value of HK$1.00 each, by the addition of HK$2,000,000,000 divided into 2,000,000,000 new shares of par value of HK$1.00 each (the “Proposed Increase in Authorised Share Capital”); and
(b) any one or more of the Directors be and is/are hereby authorised for and on behalf of the Company to execute all such documents, instruments and agreements and to do all such acts or things deemed by him/them to be incidental to, ancillary to or in connection with the matters contemplated in and for completion of the Proposed Increase in Authorised Share Capital.”
(2) “THAT conditional upon the ordinary resolution numbered 1 set out in the notice convening this meeting at which such resolution is proposed being passed and having become unconditional:
(a) the creation and issue of bonus warrants (“Warrants”) substantially in accordance with the terms and conditions as set out in the circular dated 20th May, 2008 (the “Circular”) despatched by the Company to the Shareholders (a copy of which has been produced to the meeting marked “A” and signed by the Chairman of the meeting for the purpose of identification) which entitle the holder thereof to subscribe for Shares at

* For identification purpose only

– 33 –

NOTICE OF THE SPECIAL GENERAL MEETING

an initial subscription price of HK$1.25 per Share (subject to adjustment), by way of bonus on the basis of three Warrants for every seven Rights Shares allotted and issued pursuant to the Rights Issue and otherwise on the terms and conditions set out in the warrant instrument, a draft copy of which has been submitted to the meeting marked “B” and signed by the Chairman of the meeting for the purpose of identification, and summarised in appendix headed “Summary of the terms of the Bonus Warrants” in the Circular be and is hereby approved;

(b) the Directors of the Company be and are hereby authorised to issue the Warrants and to allot and issue shares which fall to be issued upon the exercise of the subscription rights attaching to the Warrants, and to do all such acts and execute all such documents with or without amendments as they may consider necessary, desirable or expedient to carry out or give effect to or otherwise in connection with or in relation to the issue of Warrants and the foregoing paragraph of this resolution; and
(c) for the purpose of this resolution:
(i) “Rights Issue” means the issue, by way of rights, of new shares of HK$1.00 each in the capital of the Company on the basis of seven Rights Shares for every twenty shares of HK$1.00 each in the capital of the Company (the “Shares”) held, to holders (the “Shareholders”) of Shares whose names appear on the register of members of the Company on 5th June, 2008, other than those Shareholders with registered address outside the Hong Kong Special Administrative Region of the People’s Republic of China and whom the board of directors of the Company, after making relevant enquiries, considers their exclusion from the Rights Issue to be necessary or expedient on account either of the legal restrictions under the laws of the relevant place or any requirements of the relevant regulatory body or stock exchange in that place, substantially pursuant to and in accordance with the terms and conditions of the Rights Issue set out in the Circular; and
(ii) “Rights Share(s)” means new Share(s) to be allotted and issued pursuant to the Rights Issue.”

By Order of the Board HONGKONG CHINESE LIMITED Andrew Hau Secretary

Hong Kong, 20th May, 2008

– 34 –

NOTICE OF THE SPECIAL GENERAL MEETING

Registered Office: Clarendon House Church Street Hamilton HM 11 Bermuda

Principal Place of Business: 24th Floor Tower One Lippo Centre 89 Queensway Hong Kong

Note:

A member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote in his stead in accordance with the Bye-laws of the Company. A proxy need not be a member of the Company.
Where there are joint holders of any share, any one of such joint holder may vote, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at any meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.
To be valid, a form of proxy, together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, must be deposited at the principal place of business of the Company at 24th Floor, Tower One, Lippo Centre, 89 Queensway, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting or any adjourned meeting thereof should he so wishes.
The register of members of the Company will be closed from Monday, 2nd June, 2008 to Thursday, 5th June, 2008 (both dates inclusive) during which period no transfer of shares will be registered, for the purpose of determining the entitlements under the Rights Issue and eligibility to vote at the meeting. In order to be entitled to vote or to qualify for the Rights Issue, all transfers of shares accompanied by the relevant share certificates and transfer forms must be lodged with Tricor Tengis Limited, the Company’s Branch Share Registrars in Hong Kong, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Friday, 30th May, 2008.

– 35 –

AI assistant

3SBio Inc. — Capital/Financing Update 2008

49981_rns_2008-05-19_21bf34fa-049f-4bc8-abd5-9ab1f32405b1.pdf

HONGKONG CHINESE LIMITED 香港華人有限公司[*]

CONTENTS

RESPONSIBILITY STATEMENT

Dealings in fully-paid Rights Shares and

WARNING OF THE RISKS OF DEALING IN SHARES AND NIL-PAID RIGHTS SHARES

DEFINITIONS

DEFINITIONS

DEFINITIONS

HONGKONG CHINESE LIMITED 香港華人有限公司[*]

INTRODUCTION

RIGHTS ISSUE

Reasons for the Rights Issue and use of proceeds

Qualifying Shareholders

Excluded Shareholders

Closure of register of members

Terms of the Rights Issue (including Bonus Warrants)

Subscription Price for Rights Shares

Rights Shares and Warrant Exercise Shares

Application for excess Rights Shares

Application for listing

Stamp duty and any other applicable fees and charges

Deed of Undertaking

Conditions precedent to the Rights Issue

UNDERWRITING AGREEMENT

Underwriting

Conditions to the Underwriting Agreement

Termination of the Underwriting Agreement

SHAREHOLDING STRUCTURE

WARNING OF THE RISKS OF DEALING IN SHARES AND NIL-PAID RIGHTS SHARES

SGM

PROCEDURES FOR DEMANDING A POLL AT GENERAL MEETINGS

RECOMMENDATION

Yours faithfully, By Order of the Board HONGKONG CHINESE LIMITED John Lee Luen Wai Director

1. Subscription

2. Adjustment of Subscription Price and/or Subscription Rights

3. Registered Warrants

4. Transfer, transmission and registration

5. Closure of register of Warrantholders

6. Purchase and cancellation

7. Meetings of Warrantholders and modification of rights

8. Quorum

9. Replacement of Warrant certificates

10. Protection of Subscription Rights

11. Call

12. Further issues

13. Undertakings by the Company

14. Overseas Warrantholders

15. Winding up of the Company

16. Governing Laws

HONGKONG CHINESE LIMITED 香港華人有限公司[*]

ORDINARY RESOLUTIONS

More from 3SBio Inc.

3SBio Inc. Capital/Financing Update 2008