China Brilliant Global Limited — Proxy Solicitation & Information Statement 2000

Jun 29, 2000

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The Stock Exchange of Hong Kong 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, for which the directors of Prosten Technology Holdings Limited collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to Prosten Technology Holdings Limited. The directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this circular is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

If you are in doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Prosten Technology Holdings Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

PROSTEN TECHNOLOGY HOLDINGS LIMITED �� ! " # $ % & ' *

(Incorporated in the Cayman Islands with limited liability)

GENERAL MANDATES TO REPURCHASE ITS OWN SHARES AND TO ISSUE NEW SHARES

A notice convening the annual general meeting of Prosten Technology Holdings Limited to be held at Coral Room, 3/F, Furama Hotel Hong Kong, One Connaught Road Central, Hong Kong on Friday, 28 July 2000 at 10:30 a.m., is set out in the 2000 annual report. Whether or not you propose to attend the meeting, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s Branch Share Registrar in Hong Kong , Tengis Limited at 4th Floor Hutchison House, 10 Harcourt Road, Central, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the meeting. Completion and return of the proxy form will not preclude shareholders from attending and voting in person at the meeting should they so wish.

This Circular will remain on the GEM Website on the “Latest Company Announcements” page for 7 days from the date of its posting.

30 June 2000

* For identification purpose only

DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions have the following meanings:

“AGM”	the Annual General Meeting of the Company to be held
	at Coral Room, 3/F, Furama Hotel Hong Kong, One
	Connaught Road Central, Hong Kong on Friday, 28 July
	2000 at 10:30 a.m.
“Buyback Mandate”	the general mandate to exercise the power of the
	Company to repurchase Shares up to a maximum of 10
	per cent. of the issued share capital of the Company as
	at the date of the resolution approving the Buyback
	Mandate
“Commission”	Securities and Futures Commission
“Company”	Prosten Technology Holdings Limited
“Directors”	directors of the Company
“GEM”	The Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	Rules Governing the Listing of Securities on The Growth
	Enterprise Market of the Stock Exchange
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Issue Mandate”	the general mandate to allot, issue and deal with Shares
	not exceeding 20 per cent. of the issued share capital of
	the Company as at the date of passing of the resolution
	approving the Issue Mandate
“Latest Practicable Date”	29 June 2000, being the latest practicable date prior to
	the printing of this circular
“Shareholders”	holders of Shares
“Share(s)”	share(s) of nominal value of HK$0.10 each in the share
	capital of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeover Code”	the Code on Takeovers and Mergers approved by the
	Commission as amended from time to time

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LETTER FROM THE BOARD

PROSTEN TECHNOLOGY HOLDINGS LIMITED �� ! " # $ % & ' *

(Incorporated in the Cayman Islands with limited liability)

Executive Directors: Yip Seng Mun (Chairman) Yip Heon Ping Yip Heon Wai Yip Heon Keung Chan Fu Kuen, Gladys Jonathan Wu

Principal place of business: Unit 906-910 Dah Sing Financial Centre 108 Gloucester Road Wanchai Hong Hong

Independent Non-Executive Directors:

James T. Siano Au Shing Kwok

30 June 2000

To the shareholders

Dear Sir or Madam,

GENERAL MANDATES TO REPURCHASE ITS OWN SHARES AND TO ISSUE NEW SHARES

INTRODUCTION

On 7 March 2000, all the Shareholders of the Company passed by the written resolutions to give general mandates to the Directors to issue and allot Shares and to exercise the powers of the Company to repurchase its own Shares in accordance with the GEM Listing Rules. These general mandates will lapse at the conclusion of the AGM. It is therefore proposed to renew the general mandates to issue and allot Shares and to repurchase Shares at the AGM.

The purpose of this Circular is to provide you with information regarding the proposed renewal of the general mandates to issue and allot Shares and to repurchase Shares and to seek your approval of the ordinary resolutions relating to these matters at the AGM.

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LETTER FROM THE BOARD

BUYBACK MANDATE

An ordinary resolution will be proposed at the AGM to grant to the Directors the Buyback Mandate, details of which are set out in ordinary resolution no. 4 in the notice of AGM. The Shares which may be repurchased pursuant to the Buyback Mandate is limited to a maximum of 10 per cent. of the issued share capital of the Company at the date of passing of the resolution approving the Buyback Mandate.

An explanatory statement as required under the GEM Listing Rules, giving certain information regarding the Buyback Mandate, is set out in the appendix hereto.

ISSUE MANDATE

An ordinary resolution will be proposed at the AGM to grant to the Directors the Issue Mandate. In addition, an ordinary resolution will also be proposed to authorise an extension of the Issue Mandate by adding to the aggregate number of Shares which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to the Issue Mandate the number of Shares purchased under the Buyback Mandate, if granted.

Details of the aforesaid two ordinary resolutions are set out in ordinary resolutions no.5 and no. 6 in the notice of AGM.

ANNUAL GENERAL MEETING

A notice convening the AGM at which ordinary resolutions will be proposed to approve the Buyback Mandate, the Issue Mandate and the extension of the Issue Mandate, set out in the 2000 annual report of the Company has been despatched to Shareholders.

RECOMMENDATION

The Directors believe that the Buyback Mandate, the Issue Mandate and the extension of the Issue Mandate are in the best interests of the Company as well as its shareholders. Accordingly, the Directors recommend that all Shareholders of the Company should vote in favour of all the resolutions set out in the notice of AGM.

Yours faithfully, On behalf of the Board

Yip Seng Mun

Chairman

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EXPLANATORY STATEMENT

APPENDIX

This appendix serves as an explanatory statement, as required by the GEM Listing Rules, to provide you with requisite information for your consideration of the Buyback Mandate.

1. PROVISIONS OF THE GEM LISTING RULES

The GEM Listing Rules permit a company with a primary listing on GEM to repurchase its own securities on GEM or on any other stock exchange recognised for this purpose by the Commission and the Stock Exchange subject to certain restrictions, the most important of which are summarised below:

(a) Shareholders’ approval

The GEM Listing Rules provide that all proposed repurchase of securities by a company with a primary listing on GEM must be approved in advance by an ordinary resolution of shareholders, either by way of general mandate or by specific approval of a particular transaction.

(b) Source of funds

Repurchase must be funded out of funds legally available for the purpose in accordance with the company’s constitutive documents and the laws of the jurisdiction in which the company is incorporated or otherwise established.

(c) Trading restrictions

The shares proposed to be repurchased by a company must be fully paid up. A maximum of 10 per cent. of the existing issued share capital may be repurchased on GEM. A company may not issue or announce an issue of new shares for a period of 30 days immediately following a repurchase whether on GEM or otherwise (other than an issue of securities pursuant to an exercise of warrants, share options or similar instruments requiring the company to issue securities which were outstanding prior to such repurchase) without the prior approval of the Stock Exchange. The GEM Listing Rules also prohibit a company from repurchasing its own securities on GEM if the repurchase would result in the number of listed securities which are in the hands of the public falling below the relevant prescribed minimum percentage as required by the Stock Exchange. A company may only purchase shares on GEM if (1) the purchase price is not higher than the latest (or current) independent bid price or the last independent sale (contract) price quoted or reported on the system (as defined in the Rules of the Stock Exchange), whichever is higher; and (2) the company has not made the opening bid nor any bid in the last 30 minutes before the close of normal trading hours as stipulated in the Rules of the Stock Exchange.

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EXPLANATORY STATEMENT

APPENDIX

The GEM Listing Rules further provide that a company shall not repurchase its own securities on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

(d) Status of repurchased securities

The GEM Listing Rules provide that the listing of all repurchased securities is automatically cancelled and the certificates for those securities must be cancelled and destroyed.

Under Cayman Islands law, a company’s repurchased shares shall be treated as cancelled and the amount of the company’s issued share capital shall be reduced by the aggregate nominal value of the repurchased shares accordingly but the authorised share capital of the company will not be reduced.

(e) Suspension of repurchases

The GEM Listing Rules require any securities buyback programme to be suspended after a price sensitive development has occurred or has been the subject of a decision until such time the price sensitive information is made publicly available. In particular, during the period of one month immediately preceding either the preliminary announcement of a company’s annual results or the publication of a company’s halfyearly report or quarterly report, a company may not purchase its own securities on GEM, unless the circumstances are exceptional. In addition, the Stock Exchange reserves the right to suspend a securities buyback programme on GEM if the Stock Exchange considers that a company has committed a breach of the GEM Listing Rules.

(f) Reporting requirements

Under the GEM Listing Rules, repurchases of securities on GEM or otherwise must be reported in the prescribed form to the Stock Exchange not later than 9:30 a.m. (Hong Kong time) on the following business day. In addition, a company’s annual report is required to disclose details regarding securities repurchases made during the year, including in respect of the number of securities repurchased each month, the purchase price per share or the highest and lowest price paid for such purchases, where relevant, and the aggregate prices paid and the reasons of the directors of the company for making such repurchases. A company shall procure that any broker appointed by the Company to effect the repurchase of securities shall disclose to the Stock Exchange such information with respect to the repurchase as the Stock Exchange may request.

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EXPLANATORY STATEMENT

APPENDIX

(g) Connected parties

The GEM Listing Rules prohibit a company from knowingly repurchasing securities on GEM from a “connected person”, that is, a director, chief executive, substantial shareholder or management shareholder of the company or any of its subsidiaries or any of their respective associates (as defined in the GEM Listing Rules) and a connected person is prohibited from knowingly selling his/her shares to the company.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 511,250,000 Shares.

Subject to the passing of the ordinary resolution no. 4 set out in the notice of AGM and on the basis that no further Shares are issued or repurchased prior to the AGM, the Company would be allowed under the Buyback Mandate to repurchase a maximum of 51,125,000 Shares.

3. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its Shareholders to have a general authority from Shareholders to enable the Directors to repurchase Shares on GEM. Such repurchase may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and its earnings per Share and will only be made when and to the extent that the Directors believe that such repurchases will benefit the Company and its Shareholders.

4. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may apply only funds legally available for such purpose in accordance with its Memorandum and Articles of Association, the GEM Listing Rules and the applicable laws of the Cayman Islands. The Company may not purchase Shares on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the Annual Report for the year ended 31 March 2000) in the event that the proposed repurchase of Shares was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Buyback Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

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EXPLANATORY STATEMENT

APPENDIX

5. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange in the three months since 28 March 2000 (date of listing) were as follows:

		Shares
	Highest		Lowest
	HK$		HK$
March 2000	5.10		3.30
April 2000	3.75		1.38
May 2000	2.15		1.40

6. GENERAL

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make share repurchases pursuant to the proposed ordinary resolution no. 4 set out in the notice of AGM in accordance with the GEM Listing Rules and the applicable laws of the Cayman Islands.

If as a result of the share repurchases, a shareholder’s proportionate interest in the voting rights of the Company increases, such interest will be treated as an acquisition for the purposes of the Takeover Code. As a result, a shareholder, or group of shareholders acting in concert, depending on the level of increase of shareholders’ interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeover Code.

As at the Latest Practicable Date, Greenford Company Limited, Century Technology Holding Limited, Bakersfield Global Corporation and First League Investments Limited were interested in 425,000,000 Shares, together representing approximately 83.13 per cent. of the issued share capital of the Company. Based on such shareholding, and in the event that the Directors exercised in full the Buyback Mandate, the interests of Greenford Company Limited, Century Technology Holding Limited, Bakersfield Global Corporation and First League Investments Limited in the issued share capital of the Company would be increased to approximately 92.37 pre cent. of the issued shared capital of the Company. The directors are not aware of any consequences which may arise under the Takeover Code as a consequence of any purchase made under the Buyback Mandate. However, the Company may not repurchase Shares which would result in the amount of Shares held by the public being reduced to less than 15 per cent.

None of the Directors nor, to the best of their knowledge, having made all reasonable enquiries, any of their associates (as defined in the GEM Listing Rules), has any present intention, if the Buyback Mandate is approved by the Shareholders of the Company, to sell any securities to the Company or its subsidiaries.

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EXPLANATORY STATEMENT

APPENDIX

No connected person (as defined in the GEM Listing Rules) has notified the Company that he has a present intention to sell Shares to the Company, or has undertaken not to do so, if the Buyback Mandate is approved by the Shareholders.

7. SHARES REPURCHASED BY THE COMPANY

The Company had not purchased any of the Shares (whether on GEM or otherwise) during the period from 28 March 2000 (date of listing) to the Latest Practicable Date.

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