China Display Optoelectronics Technology Holdings Limited — Proxy Solicitation & Information Statement 2011

Apr 29, 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

This circular is addressed to the shareholders of the Company for information in connection with the SGM of the Company to be held on Friday, 20 May 2011. This circular is not and does not constitute an offer, nor is it calculated to invite offers for, shares in or other securities of the Company.

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

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SW KINGSWAY CAPITAL HOLDINGS LIMITED

滙富金融控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00188)

CONNECTED TRANSACTION SPECIFIC MANDATE TO ISSUE NEW SHARES

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 5 to 11 of this circular. A letter from the Independent Board Committee containing its recommendation is set out on pages 12 to 13 of this circular. A letter from First Shanghai Capital Limited, the Independent Financial Adviser, containing its advice and recommendation to the Independent Board Committee and the Independent Shareholders is set out on pages 14 to 26 of this circular.

A notice convening the SGM to be held at 5th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong, on Friday, 20 May 2011 at 10:00 a.m. is set out on pages 34 to 35 of this circular. A form of proxy for use in the SGM is enclosed. Whether or not you propose to attend the SGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and 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 you from attending and voting in person at the SGM and any adjournment thereof, should you so desire.

* For identification purposes only

29 April 2011

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Letter from First Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Appendix I – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Notice of Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	34

– i –

DEFINITIONS

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

• “Acquisition”

• the acquisition of the Sale Shares by the Purchaser from the Vendor subject to the terms of the Agreement

• “Agreement” the conditional sale and purchase agreement entered into between the Purchaser and the Vendor on 30 March 2011 relating to the sale and purchase of the Sale Shares

• “associates” has the same meaning ascribed to it under the Listing Rules

• “Board” the board of the Directors

• “Business Day”

• a day (excluding Saturday, Sunday and public holidays and days on which a tropical cyclone warning no. 8 or above or a “black rainstorm warning signal” is hoisted in Hong Kong at any time between 9:00am and 5:00pm) on which licensed banks in Hong Kong are open for general banking transactions in Hong Kong throughout their normal business hours

• “C$” Canadian dollars, the lawful currency of Canada

• “Company”

• SW Kingsway Capital Holdings Limited, a company incorporated in Bermuda with limited liability and whose Shares are listed on the main board of the Stock Exchange

• “Completion” completion of the Acquisition in accordance with the Agreement

• “Conditions”

• the conditions precedent set out under the heading of “Conditions of the Agreement” of this circular

• “connected person” has the same meaning ascribed to it under the Listing Rules

• “Consideration” HK$149 million for the sale and purchase of the Sale Shares and to be satisfied in the manner as set out in the Agreement

• “Consideration Shares” 364,640,884 new Shares to be allotted and issued by the Company and credited as fully paid to the Vendor upon Completion

– 1 –

DEFINITIONS

• “Director(s)” the director(s) of the Company “Dr. Jonathan Choi” Dr. Jonathan Koon Shum Choi, a substantial shareholder and chairman of the Company

• “First Shanghai” First Shanghai Capital Limited, a licensed corporation to carry out type 6 (advising on corporate finance) regulated activity under the SFO (Chapter 571 of Laws of Hong Kong), being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Acquisition

• “Group”

• the Company and its subsidiaries from time to time

• “HK$”

• Hong Kong dollar(s), the lawful currency of Hong Kong

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Independent Board Committee” an independent committee of the Board comprising all of the three Independent Non-executive Directors formed for the purpose of advising the Independent Shareholders on the Acquisition

• “Independent Shareholders” the Shareholders other than Dr. Jonathan Choi, Mr. Michael Choi and Ms. Janice Kwan and their respective associates

• “Issue Price”

• HK$0.2715 per Share, being the issue price for the Consideration Shares

• “Last Trading Date” 30 March 2011

• “Latest Practicable Date”

• 26 April 2011, being the latest practicable date prior to the printing of this Circular for ascertaining certain information in this Circular

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange

• “Mr. Michael Choi”

• Mr. Michael Koon Ming Choi, the chief executive officer and an executive director of the Company

• “Ms. Janice Kwan”

• Ms. Janice Wing Kum Kwan, an non-executive director of the Company

– 2 –

DEFINITIONS

• “Options” options to subscribe for Shares granted under the Share Option Scheme adopted by the Company on 10 November 2010

• “Purchaser” Best Advisory Investments Limited, an indirect wholly-owned subsidiary of the Company

• “Purchaser’s Warranties” the representations and warranties of the Purchaser contained in the Agreement

• “Sale Shares” 100 issued shares of US$1.00 each in the Target, representing 10% of the entire issued share capital of the Target

• “SFO” Securities and Futures Ordinance (Chapter 571 of Laws of Hong Kong)

• “SGM” the special general meeting of the Company to be convened and held for the purpose of considering the Acquisition or any adjournment thereof (as the case may be)

• “Share(s)” the ordinary share(s) of HK$0.10 each in the share capital of the Company

• “Shareholder(s)”

• the holder(s) of the Share(s)

• “Shareholders’ Agreement” the Shareholders Agreement entered into among shareholders of the Target on 22 December 2003, as amended on 11 January 2005, as further amended on 5 December 2005 and further amended on 14 June 2006 in respect of the Target

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “substantial shareholder” has the same meaning ascribed to it under the Listing Rules

• “Target”

• VinaCapital Group Limited, a company incorporated in the British Virgin Islands in which, 10% of its entire issued share capital is owned by the Vendor

• “Target Group” the Target, its subsidiaries and associates

• “Vendor”

• Ideal Trade Investments Limited, a company incorporated in the British Virgin Islands

– 3 –

DEFINITIONS

“Vendor’s	Warranties”	the representations, warranties and undertakings of the
		Vendor contained or referred to in the Agreement
“USD”		United States dollars, the lawful currency of the United
		States of America
“%”		percent

Unless the context requires otherwise, translations of USD into HK$ and vice versa are made in this circular, for illustration purpose only, at the rates of USD1.00 = HK$7.80. No representation is made that any amount in USD or HK$ could have been or could be converted at the above rate or at any other rate or at all. Certain amounts and percentage figures included in this circular have been subject to rounding adjustments.

– 4 –

LETTER FROM THE BOARD

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SW KINGSWAY CAPITAL HOLDINGS LIMITED 滙富金融控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00188)

Executive Directors: Jonathan Koon Shum Choi Mary Yuk Sin Lam Michael Koon Ming Choi

Non-executive Directors: Janice Wing Kum Kwan Lee G. Lam

Independent non-executive Directors: Robert Tsai To Sze Stanley Kam Chuen Ko Michael Wai Chung Wu

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place of Business in Hong Kong: 5th Floor Hutchison House 10 Harcourt Road Central Hong Kong

29 April 2011

To the Shareholders and, for information only, the holders of Options of the Company

Dear Sir or Madam,

CONNECTED TRANSACTION SPECIFIC MANDATE TO ISSUE NEW SHARES

INTRODUCTION

The Board announced on 30 March 2011 that the Purchaser, an indirect wholly-owned subsidiary of the Company, entered into a conditional Agreement with the Vendor, pursuant to which the Purchaser will acquire the Sale Shares for a consideration of HK$149 million. The Acquisition constitutes a connected transaction of the Company under the Listing Rules. The purpose of this circular is to provide the Shareholders with further information regarding the Acquisition, and to set out the letter of advice from First Shanghai to the Independent Board Committee and the Independent Shareholders.

* For identification purposes only

– 5 –

LETTER FROM THE BOARD

THE AGREEMENT

Date of the Agreement:

30 March 2011

Parties:

• (1) The Vendor

• (2) The Purchaser

The Vendor is wholly owned by Ms. Choi Siu Ping, who is the sister of Dr. Jonathan Choi and Mr. Michael Choi and the sister-in-law of Ms. Janice Kwan. The Purchaser is an indirect wholly-owned subsidiary of the Company and an investment holding company.

Sale and Purchase:

Pursuant to the Agreement, the Vendor will sell and the Purchaser will purchase the Sale Shares in accordance with the terms of the Agreement.

Assets to be acquired:

The Sale Shares, being 100 issued shares of US$1.00 in the Target, representing 10% of the entire issued share capital of the Target. The Sale Shares were acquired by the Vendor on or about 15 October 2004 for USD103,670 (equivalent to approximately HK$808,626)).

The Consideration:

The Consideration of HK$149 million, is to be satisfied on Completion as to HK$50 million by cash and as to HK$99 million by the issuance of 364,640,884 Consideration Shares credited as fully paid at the Issue Price to the Vendor on Completion.

The Consideration (including the Issue Price) was determined after arm’s length negotiations with reference to the consolidated net profits of the Target for the year ended 30 June 2010 and recent trading prices of the Share as quoted on the Stock Exchange. The Consideration represents a price to earnings ratio of approximately 16 times.

The 364,640,884 Consideration Shares represent (i) approximately 9.9% of the existing issued share capital of the Company and (ii) approximately 9.0% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares. Resolution(s) will be proposed to the Shareholders in the SGM for the approval of the specific mandate for the issue of the Consideration Shares.

– 6 –

LETTER FROM THE BOARD

The Issue Price represents:

• (i) a discount of approximately 4.74% to the closing price of HK$0.285 per Share as quoted on the Stock Exchange on the date of the Agreement;

• (ii) a discount of approximately 4.4% to the average closing price of approximately HK$0.284 per Share as quoted on the Stock Exchange for the last 5 trading days immediately preceding the Last Trading Date; and

• (iii) a discount of approximately 1.27% to the closing price of HK$0.275 per share as quoted on the Stock Exchange on the Latest Practicable Date.

Based on the Issue Price, the value of the Consideration Shares represents a sum of approximately HK$99 million. The Agreement does not contain any restrictions on the sale of the Consideration Shares after Completion.

Conditions of the Agreement:

Completion is conditional on:

• (a) the Purchaser being satisfied in its absolute discretion with the results of the due diligence review of the assets, liabilities, operations and affairs of the Target Group;

• (b) the Purchaser having obtained a legal opinion, (the form and substance of which shall to the reasonable satisfaction of the Purchaser having regards to the transactions contemplated in the Agreement) issued by a lawyer qualified to practice Vietnamese laws in relation to the transactions contemplated under the Agreement;

• (c) the Independent Shareholders having passed the relevant resolutions at a general meeting of the Company approving the Agreement, the issue and allotment of the Consideration Shares and any other transactions contemplated under the Agreement;

• (d) the Stock Exchange granting the listing of and permission to deal in the Consideration Shares;

• (e) all Vendor’s Warranties remaining true and accurate and not misleading in any material respect as if repeated at Completion and at all times between the date of the Agreement and Completion;

• (f) all the shareholders of the Target (other than the Vendor) having waived their pre-emptive rights on the Sale Shares pursuant to the Shareholders Agreement and the Purchaser entering into a deed of adherence to the Shareholders’ Agreement;

• (g) all necessary consents, approvals and authorizations having been obtained from any other third parties and all relevant authorities in Vietnam, Hong Kong, the British Virgin Islands and in any other applicable jurisdiction in connection with the transfer of the Sale Shares and other transactions contemplated thereunder and the implementation of the transactions contemplated hereunder; and

– 7 –

LETTER FROM THE BOARD

• (h) the independent financial adviser having advised the Independent Shareholders to vote in favour of the resolutions to approve the transactions contemplated under the Agreement.

If the conditions above have not been fulfilled (or waived (except for (c), (d), (f) and (g) above) by the Purchaser) on or before 1 September 2011 (or such other date as the Vendor and the Purchaser may agree in writing); or the Purchaser having informed the Vendor in writing that it is not satisfied with the results of the due diligence review of the assets, liabilities, operations and affairs of the Target Group, the Agreement shall terminate save whereupon the parties shall have no further claims against each other under the Agreement save for any claims from antecedent breach of the term hereof.

Completion:

Completion is to take place on or before the fifth Business Day after all conditions precedent to the Agreement have been satisfied or waived by the Purchaser (or such other time and date as the parties to the Agreement may agree).

INFORMATION ON THE TARGET

The Target, an investment holding company incorporated in the British Virgin Islands with limited liability, is a holding company for a financial services group conducting investment activities and providing investment management services in Vietnam.

The consolidated net profit before and after taxation of the Target as set out in the audited financial statements for the year ended 30 June 2009 was approximately USD10.7 million (equivalent to approximately HK$83.3 million) and USD10.6 million (equivalent to approximately HK$82.7 million), respectively. For the year ended 30 June 2010, both the audited consolidated net profit before and after taxation of the Target was approximately USD11.9 million (equivalent to approximately HK$93.0 million). The net assets of the Target as set out in its audited financial statements as at 30 June 2010 was approximately USD87.4 million (equivalent to approximately HK$681 million).

REASON FOR THE ACQUISITION

The Group is engaged in providing financial services in Hong Kong and making proprietary investments, including investments in various listed and unlisted assets for short to medium term capital gains.

The Company takes the view that the Acquisition provides an investment opportunity for the Group to capitalise on the growing prospects of the financial market in South-East Asia. The Board considers that the Acquisition will broaden the investment portfolio of the Company and therefore is beneficial to the Company and its shareholders as a whole.

The Directors are of the view that the Acquisition is made in the ordinary course of business of the Group and in the interest of the Group and the terms of Acquisition are in normal commercial terms, which are fair and reasonable and in the interests of the Shareholders as a whole.

– 8 –

LETTER FROM THE BOARD

EFFECT ON THE SHAREHOLDING STRUCTURE

Assuming there being no other changes in the share capital of the Company, the changes of the shareholding structure (i) as at the date the Latest Practicable Date; and (ii) immediately after Completion are set out below:

World Developments Limited (Note) Mrs. Lam Wong Yuk Sin Mary Mr. Wu Wai Chung Michael Mr. Ko Kam Chuen Stanley The Vendor Public Total	Existing shareholding as at the Latest Practicable Date No. of Shares approx. % 2,411,661,327 65.52% 7,500,000 0.20% 2,514,000 0.07% 1,200,000 0.03% 0 0% 1,258,168,579 34.18% 3,681,043,906 100%	Immediately after Completion No. of Shares approx. % 2,411,661,327 59.61% 7,500,000 0.19% 2,514,000 0.06% 1,200,000 0.03% 364,640,884 9.01% 1,258,168,579 31.10% 4,045,684,790 100%	Immediately after Completion No. of Shares approx. % 2,411,661,327 59.61% 7,500,000 0.19% 2,514,000 0.06% 1,200,000 0.03% 364,640,884 9.01% 1,258,168,579 31.10% 4,045,684,790 100%
			100%

Note:

World Developments Limited is a wholly owned subsidiary of Innovation Assets Limited whose entire issued share capital is beneficially owned by Sunwah International Limited (“SIL”). Sun Wah Capital Limited (“SWCL”) beneficially owns approximately 41% of the entire issued share capital of SIL. Dr. Jonathan Choi, Chairman of the Company, beneficially owns or has control of more than one-third of the issued share capital of SIL and SWCL respectively.

GENERAL

The Vendor is wholly-owned by Ms. Choi Siu Ping, who is the sister of Dr. Jonathan Choi and Mr. Michael Choi and the sister-in-law of Ms. Janice Kwan. In the circumstances, the Vendor is a connected person of the Company and the Acquisition constitutes a connected transaction for the Company under the Listing Rules. Given that the applicable percentage ratios are more than 5%, the Acquisition is subject to Independent Shareholders’ approval under Chapter 14A of the Listing Rules and Dr. Jonathan Choi, Mr. Michael Choi and Ms. Janice Kwan and their respective associates will abstain from voting in respect of the resolution(s) to approve the Agreement and the Acquisition at the SGM, which will be conducted by way of a poll.

Dr. Jonathan Choi, Mr. Michael Choi and Ms. Janice Kwan are regarded as materially interested in the Acquisition under the bye-laws of the Company and was abstained from voting on the relevant Board resolution approving the Acquisition.

– 9 –

LETTER FROM THE BOARD

SGM

Set out on pages 34 and 35 of this circular is a notice convening the SGM to be held at 5th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong on Friday, 20 May 2011 at 10:00 a.m. at which an ordinary resolution will be proposed to the Independent Shareholders to consider and, if thought fit, approve the Acquisition, the issue and allotment of the Consideration Shares and the transactions contemplated under the Agreement. The voting of Shareholders at the SGM will be taken by poll.

As at the Latest Practicable Date, World Developments Limited, in which Dr. Jonathan Choi beneficially owned 68.29% of the issued share capital of its sole shareholder, Sunwah International Limited, was interested in 2,411,661,327 Shares. World Developments Limited will abstain from voting at the SGM. To the extent that the Company is aware having made all reasonable enquiries, as at the date of the Latest Practicable Date, there is (i) no voting trust or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon World Developments Limited; and (ii) no obligation or entitlement of World Developments Limited as at the Latest Practicable Date, whereby it had or may have temporarily or permanently passed control over the exercise of the voting right in respect of its shareholding in the Company to a third party, either generally or on a case-by-case basis.

So far as is known to the Directors, as at the Latest Practicable Date, there was no discrepancy between beneficial shareholding interest in the Company of World Development Limited as disclosed in this circular and the number of Shares in respect of which it will control or will be entitled to exercise control over the voting rights at the SGM.

A form of proxy for use at the SGM is enclosed. Whether or not you propose to attend the SGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and 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 you from attending and voting in person at the SGM and any adjournment thereof, should you so desire.

RECOMMENDATION

The Directors consider that the terms of the Acquisition are on normal commercial terms, fair and reasonable and in the interests of the Shareholders as a whole. Accordingly, the Directors recommend that all the Independent Shareholders should vote in favour of the proposed ordinary resolutions set out in the notice of the SGM to approve the Acquisition.

– 10 –

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

The Independent Board Committee, comprising all of the three independent non-executive Directors, has been established to advise the Independent Shareholders on the terms of the Agreement and the transactions contemplated thereunder. Your attention is drawn to its letter of recommendation set out on pages 12 to 13 of this circular.

First Shanghai has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in the same regard. Your attention is drawn to their letter of recommendation set out on pages 14 to 26 of this circular.

Your attention is also drawn to the additional information set out in appendices to this circular.

Yours faithfully, For and on behalf of SW Kingsway Capital Holdings Limited Michael Koon Ming Choi Chief Executive Officer

– 11 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation from the Independent Board Committee which has been prepared for the purpose of inclusion in this circular:

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SW KINGSWAY CAPITAL HOLDINGS LIMITED 滙富金融控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00188)

29 April 2011

• To the Shareholders and, for information only, the holders of Options of the Company

Dear Sir or Madam,

CONNECTED TRANSACTION

SPECIFIC MANDATE TO ISSUE NEW SHARES

INTRODUCTION

We refer to the circular of the Company dated 29 April 2011 (the “Circular”), of which this letter forms part. Unless specified otherwise, capitalised terms used herein shall have the same meanings as those defined in the Circular.

We have been appointed by the Board to advise you on the terms of the Agreement and the transactions contemplated thereunder. First Shanghai has been appointed as the independent financial adviser to advise you and us in this regard. Details of their advice, together with the principal factors and reasons they have taken into consideration in giving such advice, are set out on pages 14 to 26 of this Circular. Your attention is also drawn to the letter from the Board in the Circular and the additional information set out in the appendices thereto.

RECOMMENDATION

Having considered the terms of the Agreement and the transactions contemplated thereunder and taking into account the independent advice of First Shanghai and the relevant information contained in the letter from the Board, we are of the opinion that the Agreement and the transactions contemplated thereunder, are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

* For identification purposes only

– 12 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend that you vote in favour of the ordinary resolution to be proposed at the SGM to approve the Agreement and the transactions contemplated thereunder.

Yours faithfully For and on behalf of Independent Board Committee

Robert Tsai To Sze

Stanley Kam Chuen Ko

Michael Wai Chung Wu

– 13 –

LETTER FROM FIRST SHANGHAI

The following is the full text of a letter received from First Shanghai setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition for inclusion in this circular.

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19th Floor, Wing On House 71 Des Voeux Road Central Hong Kong

29 April 2011

To the Independent Board Committee and the Independent Shareholders

SW Kingsway Capital Holdings Limited 5th Floor, Hutchison House 10 Harcourt Road Central Hong Kong

Dear Sirs,

CONNECTED TRANSACTION SPECIFIC MANDATE TO ISSUE NEW SHARES

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in connection with the Acquisition contemplated under the Agreement, details of which are contained in the circular to the Shareholders dated 29 April 2011 (the “Circular”), of which this letter forms part. Unless the context otherwise requires, capitalised terms used in this letter shall have the same meanings as defined in the Circular.

As set out in the Circular, the Purchaser, an indirect wholly-owned subsidiary of the Company and an investment holding company, entered into the Agreement with the Vendor in respect of the purchase of the Sales Shares at a consideration of HK$149 million, representing 10% of the entire issued share capital of the Target. The Vendor is wholly owned by Ms. Choi Siu Ping, who is the sister of Dr. Jonathan Choi and Mr. Michael Choi and the sister-in-law of Ms. Janice Kwan, and is thus a connected person of the Company as defined under the Listing Rules. As the applicable percentage ratios are more than 5%, the Acquisition contemplated under the Agreement constitutes a connected transaction for the Company and is subject to the reporting, announcement and Independent Shareholders

– 14 –

LETTER FROM FIRST SHANGHAI

approval under Chapter 14A of the Listing Rules. Dr. Jonathan Choi, Mr. Michael Choi and Ms. Janice Kwan and their respective associates will abstain from voting on the resolution(s) approving the Acquisition to be proposed at the SGM.

An Independent Board Committee, comprising all of the three independent non-executive Directors, namely Mr. Robert Tsai To Sze, Mr. Stanley Kam Chuen Ko and Mr. Michael Wai Chung Wu, has been established to advise the Independent Shareholders on whether the terms of the Agreement are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. We, First Shanghai, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

In putting forth our opinion and recommendation, we have relied on the accuracy of the information and representations included in the Circular and provided to us by the Directors and the Group, and have assumed that all such information and representations made or referred to in the Circular and provided to us by the Directors and the Group were true at the time they were made and continued to be true up to the time of the holding of the SGM. We have also assumed that all statements of belief, opinion and intention made in the Circular were reasonably made after due enquiry. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and the Group and have been advised that no material facts have been withheld or omitted from the information provided and referred to in the Circular. We have sought confirmation from the Directors that no material facts or information have been omitted from the information supplied and/or opinions expressed. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not conducted any independent investigation into the business and affairs of the Group and the Target, nor have we carried out any independent verification of the information supplied. We consider that we have obtained all information and documents of the Group and the Target relevant to an assessment of the fairness and reasonableness of the terms of the Acquisition; and have reviewed the fairness, reasonableness and completeness of any assumptions or projections relevant to the Acquisition. Based on the foregoing, we confirm that we have taken the reasonable steps, which are applicable to the Acquisition, as referred to and required under Rule 13.80 of the Listing Rules in forming our opinion.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation in respect of the Acquisition contemplated under the Agreement, we have taken into consideration the following principal factors and reasons:

1. Background and reasons for the Acquisition

Information on the Group

The Group is engaged in providing financial services in Hong Kong and making proprietary investments, including investment in various listed and unlisted asset to look for short to medium capital gains.

– 15 –

LETTER FROM FIRST SHANGHAI

The following table is a summary of the Group’s latest financial results for the six months ended 31 December 2009 and 31 December 2010 as extracted from the latest published interim report of the Group (the “Interim Report”):

Turnover Profit before tax Profit attributable to owners of the Company Total assets Total liabilities Net assets	Six months ended 31 December 2009 2010 HK$’000 HK$’000 (unaudited) (unaudited) 90,483 110,498 37,285 46,800 37,407 46,784 As at 30 June 2010 As at 31 December 2010 HK$’000 HK$’000 (audited) (unaudited) 857,932 825,729 302,858 136,870 555,074 688,859	Six months ended 31 December 2009 2010 HK$’000 HK$’000 (unaudited) (unaudited) 90,483 110,498 37,285 46,800 37,407 46,784 As at 30 June 2010 As at 31 December 2010 HK$’000 HK$’000 (audited) (unaudited) 857,932 825,729 302,858 136,870 555,074 688,859
		As at 31 December 2010 HK$’000 (unaudited) 825,729 136,870 688,859

For the six months ended 31 December 2010, turnover of the Group increased by approximately 22.1% from approximately HK$90.5 million for the six months ended 31 December 2009 to approximately HK$110.5 million. Profit attributable to owners of the Company increased from approximately HK$37.4 million for the six months ended 31 December 2009 to approximately HK$46.8 million for the six months ended 31 December 2010, representing an increase of approximately 25.1%. As stated in the Interim Report, such improvement in the financial performance of the Group was mainly attributable to the recovery of the Hong Kong stock market and that the fund raised from initial public offerings and the average daily market turnover of the Stock Exchange increased by approximately 74% and 12% respectively for the six months ended 31 December 2010 when compared with the corresponding period in 2009.

– 16 –

LETTER FROM FIRST SHANGHAI

The following table is a summary of the Group’s revenue by operating segments for the six months ended 31 December 2010 as extracted from the Interim Report:

		**Six months **	**ended 31 December **	2010
			Corporate
			finance and
	Investment		capital
	in securities	Brokerage	market	Others	Total
Segment revenue (HK$’000)	61,166	35,594	13,330	408	110,498
Percent of total revenue (%)	55.4	32.2	12.1	0.3	100

As indicated from the above table, the largest business segment of the Group was investment in securities, representing approximately 55.4% of the Group’s turnover during the review period. Brokerage was also a significant business segment, representing approximately 32.2% of the Group’s turnover. In addition, the Group generated turnover from corporate finance and capital markets and other segments during the review period, representing approximately 12.1% and 0.3% of the Group’s total revenue respectively. As stated in the Interim Report, the Group plans to lower the volatility of their investments through diversification of investment channels and products.

Information on the Target

The Target was established in 2003 and is a holding company for a financial services group which principally engaged in conducting investment activities and providing investment management services in Vietnam. The Target, through its subsidiaries, manages three closed-end funds listed on Alternative Investment Market of the London Stock Exchange and two other unlisted funds. The investment focus of the three listed funds referred to above are diverse in nature and include diversified fund, real estate fund and infrastructure fund, with combined net asset value of approximately USD1.7 billion as at 31 December 2010.

The following table is a summary of the Target’s consolidated financial results for the year ended 30 June 2009 and 30 June 2010:

	For the year ended	For the year ended
	**30 **	June
	2009		2010
	USD million	_USD _	million
	(audited)	(audited)
Turnover	40.3		41.8
Profit before tax	10.7		11.9
Profit attributable to owners of the Target	10.6		11.9

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LETTER FROM FIRST SHANGHAI

	**As **	at 30 June	As at 30 June
		2009	2010
	USD million		USD million
		(audited)	(audited)
Total assets		102.4	105.9
Total liabilities		15.8	18.5
Net assets		86.6	87.4

As indicated from the table above, turnover of the Target increased by approximately 3.7% from approximately USD40.3 million for the year ended 30 June 2009 to approximately USD41.8 million for the year ended 30 June 2010. In addition, profit attributable to owners of the Target increased by approximately 12.3% from approximately USD10.6 million to approximately USD11.9 million during the same period.

The following table is a summary of the Target’s revenue by operating segments as extracted from the consolidated financial statements of the Target for the year ended 30 June 2010:

	For the year ended 30 June 2010	For the year ended 30 June 2010	For the year ended 30 June 2010
	Assets	Corporate
	Management	Advisory	Total
Segment revenue (USD million)	34.7	7.1	41.8
Percent of total revenue (%)	83.1	16.9	100.0

According to the above table, the core business of the Target was assets management, representing approximately 83.1% of the Target’s total revenue for the year ended 30 June 2010. The asset management fees are segregated into management fees based on net asset value of the fund and performance fees. The Target also generated revenue from corporate advisory services, which represented approximately 16.9% of the Target’s total revenue for the same review period.

Economic outlook of Vietnam

The economy of Vietnam has experienced rapid growth in the recent years. According to World Bank, the Gross Domestic Products in Vietnam increased from approximately USD54.2 billion in 2005 to approximately USD90.1 billion in 2009, representing a cumulative average growth rate (“CAGR”) of approximately 10.7%. The foreign direct investment in Vietnam also experienced rapid growth during the same review period, increasing from approximately USD2 billion in 2005 to approximately USD7.6 billion in 2009, representing CAGR of approximately 31.3%. The Directors considered that the economic prospects in South-East Asia, in particular Vietnam, are promising and that the Acquisition will enable the Group to directly capitalise on the growing economic prospects in the region.

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LETTER FROM FIRST SHANGHAI

Reasons for the Acquisition

The Group is engaged in providing financial services in Hong Kong and making proprietary investments, including investment in various listed and unlisted asset to look for short to medium capital gains.

The Company takes the view that the Acquisition provides an investment opportunity for the Group to capitalise on the growing prospects of the financial market in the South-East Asia. The Board considers that the Acquisition will further diversify the investment portfolio of the Company and therefore is beneficial to the Company and its shareholders as a whole.

Having considered that (i) the Group’s business nature which involves proprietary investments in listed and unlisted assets; (ii) the positive and growing economic prospect of Vietnam as mentioned above; and (iii) the Group’s intention to lower the volatility of their investments through portfolio diversification, we concur with the Directors’ view that the Acquisition is conducted in the ordinary course of business of the Group and in the interest of the Group and the terms of Acquisition are in normal commercial terms, which are fair and reasonable and in the interests of the Shareholders as a whole.

2. Principal terms of the Agreement

Assets to be acquired

Pursuant to the Agreement, the Purchaser agreed to purchase and the Vendor agreed to sell the Sale Shares, representing 10% of the entire issued share capital of the Target, at a total consideration of HK$149 million, on the terms and subject to the conditions as set out in the Agreement. Upon completion of the Acquisition, the Group will be interested in 10% equity interest in the Target.

Basis of consideration

The Consideration is HK$149 million, of which HK$50 million shall be satisfied by cash and HK$99 million shall be satisfied by way of the issue and allotment of 364,640,884 Consideration Shares credited as fully paid at the issue price of HK$0.2715 per Consideration Share to the Vendor on Completion.

As set out in the letter from the Board, the Consideration for the Acquisition was arrived at after arm’s length negotiations between the parties taking into account the consolidated net profits of the Target for the year ended 30 June 2010 and recent trading prices of the Share as quoted on the Stock Exchange. The Consideration represents a price to earnings ratio of approximately 16 times.

The Target is principally engaged in conducting investment activities and providing investment management services in Vietnam. In order to assess the fairness and reasonableness of the Consideration, we conducted trading comparable analysis, which is one of the widely-used benchmarking methods, on listed asset management

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LETTER FROM FIRST SHANGHAI

companies with respect to their price to earnings ratio (“P/E Ratio(s)”). We noted that there is only one such company, namely Value Partners Group Limited (“Value Partners”), listed on the Main Board of the Stock Exchange.

In such regard, we have extended our scope of analysis and, to our best efforts, conducted a search of all asset management companies listed on stock exchanges of the Asia Pacific region. We have identified 13 such companies, together with Value Partners, (the “Comparable Companies”), which is an exhaustive list of companies to our best knowledge.

Set out below is a table comparing the P/E Ratio represented by the Consideration against those of the Comparable Companies based on their closing prices at the Latest Practicable Date:

	Stock	Market	Market
Company	exchange	capitalisation		P/E Ratio
			(HK$
		million)		(times)
		(note 1)		(note 2)
Listed on the Stock Exchange
Value Partners	Hong Kong		13,531	20.72
Listed on stock exchanges of Asia
Pacific Region
Sparx Group Company Limited	Japan		1,740	45.97
Sun Capital Management Corporation	Japan		140	79.95
MFC Asset Management Public
Company Limited	Thailand		653	13.16
Arif Habib Investments Limited	Pakistan		145	12.92
JS Investments Limited	Pakistan		97	12.17
Platinum Asset Management Limited	Australia		22,238	19.44
BT Investment Management Limited	Australia		3,597	19.71
Magellan Financial Group Limited	Australia		2,293	71.71
K2 Asset Management Holdings	Australia		1,819	14.69
Hunter Hall International Limited	Australia		1,313	13.48
HFA Holdings Limited	Australia		1,373	34.94
Treasury Group Limited	Australia		897	9.19
Everest Financial Group Limited	Australia		32	1.21
		Max		79.95
		Min		1.21
		Mean		26.38
		Median		17.07
Consideration (note 3)				16.0

Consideration (note 3)

Source: Bloomberg and financial reports of Comparable Companies

– 20 –

LETTER FROM FIRST SHANGHAI

Notes:

• (1) Market capitalisation as at the Latest Practicable Date translated from local currencies to HK$ based on the prevailing exchange rates at the Latest Practicable Date.

• (2) P/E Ratio is calculated based on the market capitalisation as at the Latest Practicable Date divided by the profit attributable to owners of the company as disclosed in the latest published annual financial statements of the Comparable Companies.

• (3) The P/E Ratio represented by the Consideration is calculated based on the Consideration of HK$149.0 million divided by 10% of consolidated net profit after tax of Target Group for the year ended 30 June 2010 of approximately USD1.19 million (equivalent to approximately HK9.3 million).

As indicated in the table above, the P/E Ratios of the Comparables Companies range from approximately 1.21 times to 79.95 times with mean and median of approximately 26.38 times and 17.07 times respectively. We noted that the P/E Ratio represented by the Consideration is approximately 16.0 times which is within the range of the P/E Ratios and below the mean and median represented by the Comparable Companies. It should be noted that the Comparable Companies may not be directly comparable to the Target and different stock markets may have different ratings for companies engaged in the same industry. Nevertheless, given that there is only one asset management company listed on the Main Board, we believe that the Comparable Companies, being asset management companies listed on stock exchanges of the Asia Pacific region, serve as a reasonable benchmark in assessing the fairness of the Consideration.

Based on the above, we consider that the Consideration for the Acquisition is fair and reasonable.

Issue price of the Consideration Shares

As mentioned above, part of the Consideration shall be satisfied by the issue and allotment of 364,640,884 Consideration Shares to the Vendor at HK$0.2715 per Consideration Share upon Completion. The Issue Price represents:

• (i) a discount of approximately 1.27% to the closing price of HK$0.275 per Share as quoted on the Stock Exchange on the Latest Practicable Date;

• (ii) a discount of approximately 4.74% to the closing price of HK$0.285 per Share as quoted on the Stock Exchange on the Last Trading Date;

• (iii) a discount of approximately 4.4% to the average closing prices as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day of approximately HK$0.284 per Share;

• (iv) a discount of approximately 2.34% to the average closing prices as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day of approximately HK$0.278 per Share; and

• (v) a premium of approximately 45.11% over the unaudited net asset value attributable to owners of the Company per Share of approximately HK$0.1871 as at 31 December 2010.

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LETTER FROM FIRST SHANGHAI

To assess the fairness and reasonableness of the Issue Price per Consideration Share, we have reviewed all transactions involving the issuance of consideration shares as announced by companies listed on the Main Board of the Stock Exchange in the first quarter of 2011 (the “Issuance Comparables”). Given that the Issuance Comparables were transacted recently and are subject to market conditions and investment sentiments similar to the Acquisition, we are of the view that the Issuance Comparables are representative and applicable for our reference purpose. Set out below is a table comparing the respective premium/ (discount) of the respective issue prices represented by the Issuance Comparables:

				Premium/ (Discount)
			Premium/ (Discount)	of the issue price
			of the issue price	over/(to) closing
			over/(to) closing	price on last 5
			price on last trading	consecutive trading
			day prior to/on the	days prior to/on the
Date of			date of the relevant	date of the relevant
announcement	Company name	Stock Code	announcements	announcement
28-Mar	Cheong Ming	1196	(1.40)	0.00
	Investment Ltd.
21-Mar	Sustainable Forest	723	14.90	22.60
	Holdings Ltd.
11-Mar	Qin Jia Yuan Media	2366	13.18	11.20
	Services Company
	Ltd.
7-Mar	K.P.I Company Ltd.	605	(11.10)	(10.50)
25-Feb	The Hong Kong	145	(19.20)	(20.50)
	Building and Loan
	Agency Ltd.
23-Feb	CVM Minerals Ltd.	705	(4.48)	(10.86)
18-Feb	Imagi International	585	(11.40)	(9.79)
	Holdings Ltd.
11-Feb	Sino-Tech	724	2.91	(3.08)
	International
	Holdings Ltd.
8-Feb	China Solar Energy	155	(5.91)	0.00
	Holdings Ltd.
1-Feb	China Daye	661	(15.30)	(15.50)
	Non-Ferrous Metals
	Mining Ltd.
1-Feb	CT Holdings	1008	(29.78)	(28.16)
	(International) Ltd.
24-Jan	Tech Pro Technology	3823	(0.50)	5.71
	Development Ltd.
13-Jan	Prosperity	803	1.01	0.60
	International
	Holdings (H.K.)
	Ltd.
12-Jan	RCG Holdings Ltd.	802	(7.67)	(7.14)

– 22 –

LETTER FROM FIRST SHANGHAI

				Premium/ (Discount)
			Premium/ (Discount)	of the issue price
			of the issue price	over/(to) closing
			over/(to) closing	price on last 5
			price on last trading	consecutive trading
			day prior to/on the	days prior to/on the
Date of			date of the relevant	date of the relevant
announcement	Company name	Stock Code	announcements	announcement
6-Jan	Celestial Asia	1049	(0.27)	0.53
	Securities Holdings
	Ltd.
5-Jan	Jutal Offshore Oil	3303	(5.69)	0.52
	Services Ltd.
		Maximum	14.90	22.60
		Minimum	(29.78)	(28.16)
		Average	(5.04)	(4.02)
		Median	(5.09)	(1.54)
		The Issue Price	(4.74)	(4.4)

Source: Website of the Stock Exchange (http://www.hkex.com.hk)

As indicated from above table, the issue prices of the Issuance Comparables ranged from (i) a discount of approximately 29.8% to a premium of approximately 14.9% to the respective closing prices of their shares on the last trading days; and (ii) a discount of approximately 28.2% to a premium of approximately 22.6% to the respective average closing prices of their shares on the last five consecutive trading days prior to the date of the relevant announcements, respectively (the “Market Ranges”).

We also noted that the issue prices of the Issuance Comparables were on average at (i) a discount of approximately 5.04% to the closing prices of the shares of the respective companies in the last trading day prior to/on the date of the relevant announcements; and (ii) a discount of approximately 4.02% to the average closing price of the shares in the last five trading days prior to the respective transactions being announced, respectively (the “Market Averages”).

Therefore, having considered that the respective discounts represented from the Issue Price (i) falls within the Market Ranges; and (ii) are close to the Market Averages; we are of the view that the moderate discounts represented by the Issue Price is fair and reasonable.

Settlement of the Consideration

As stated in the section headed “Basis of Consideration”, approximately 66.4% of the Consideration shall be settled by the issue and allotment of the Consideration Shares and the remaining approximately 33.6% of the Consideration shall be settled by HK$50 million cash.

– 23 –

LETTER FROM FIRST SHANGHAI

We have discussed with the Company and understand that the settlement term was arrived between the Vendor and the Company after arm’s length negotiation. We concur with the Directors’ view that the settlement of the Consideration with the combination of cash and the Consideration Shares could lessen the impact to the liquidity position of the Group and such settlement method is fair and reasonable.

3. Potential dilution to shareholding of the public Shareholders

The table below sets out the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) upon full issue and allotment of 364,640,884 Consideration Shares (assuming no other Shares are issued or repurchased by the Company):

World Developments Limited (Note) Ms. Lam Wong Yuk Sin Mary Mr. Wu Wai Chung Michael Mr. Ko Kam Chuen Stanley Sub-total The Vendor Public Shareholders Total	Issued Shares as at the Latest Practicable Date No. of Shares % 2,411,661,327 65.52 7,500,000 0.20 2,514,000 0.07 1,200,000 0.03 2,422,875,327 65.82 – – 1,258,168,579 34.18 3,681,043,906 100.00	Issued Shares upon the Completion No. of Shares % 2,411,661,327 59.61 7,500,000 0.19 2,514,000 0.06 1,200,000 0.03 2,422,875,327 59.89 364,640,884 9.01 1,258,168,579 31.10 4,045,684,790 100.00	Issued Shares upon the Completion No. of Shares % 2,411,661,327 59.61 7,500,000 0.19 2,514,000 0.06 1,200,000 0.03 2,422,875,327 59.89 364,640,884 9.01 1,258,168,579 31.10 4,045,684,790 100.00
			59.89 9.01 31.10
			100.00

Note: World Developments Limited is a wholly owned subsidiary of Innovation Assets Limited whose entire issued share capital is beneficially owned by Sunwah International Limited (“SIL”). Sun Wah Capital Limited (“SWCL”) beneficially owns approximately 41% of the entire issued share capital of SIL. Dr. Jonathan Choi, Chairman of the Company, beneficially owns or has control of more than one-third of the issued share capital of SIL and SWCL respectively.

The table above illustrates that the shareholdings of the current public Shareholders would decrease from approximately 34.18% as at the Latest Practicable Date to approximately 31.10% upon the issue and allotment of 364,640,884 Consideration Shares under the Agreement (assuming no other Shares are issued or repurchased by the Company). Such potential dilution to the shareholdings of the current public Shareholders represents a dilution of approximately 3.08%.

Taking into account that (i) the fairness and reasonableness of the Issue Price as set out in the section headed “Issue Price of the Consideration Shares”; (ii) the benefits of the Acquisition attributable to the Group as mentioned in the section headed “Reasons for the Acquisition”; (iii) the issue of the Consideration Shares for settlement of part of the Consideration alleviates the impact to the Group’s cash resources; and (iv) the shareholding interests of all the Shareholders in the Company will be diluted in

– 24 –

LETTER FROM FIRST SHANGHAI

proportion to their respective shareholdings upon the issue and allotment of Consideration Shares to the Vendor, we are of the opinion that the potential dilution to the shareholdings of the public Shareholders as mentioned above is acceptable.

4. Financial effects of the Acquisition

Earnings

Upon Completion, the Company will hold 10% equity interest in the Target and the results of which will be equity accounted for under the long-term equity investment of non-current assets. In view of the profitable track record of the Target as mentioned in the section headed “Information on the Target”, we concur with the Directors’ view that the Acquisition is expected to contribute positively to the results of the Group upon Completion.

Net assets

As set out in the Interim Report, the Group has net assets attributable to owners of the Company of approximately HK$688.7 million as at 31 December 2010 as compared to approximately HK$555.1 million as at 30 June 2010. Except for the payment of HK$50.0 million cash consideration, the issue of the Consideration Shares pursuant to the Agreement is not expected to have any material effect on the Group’s net asset value.

Working capital

The Consideration will be partly satisfied by cash with the Group’s internal resources and partly satisfied by the issue and allotment of the Consideration Shares. The working capital of the Group would be reduced by HK$50 million, being the part of the Consideration satisfied by cash. The Directors considered that such amount, which represents approximately 16.3% of the cash and cash equivalents of the Group as at 31 December 2010, will not have material adverse impact on the working capital position of the Group.

– 25 –

LETTER FROM FIRST SHANGHAI

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that the Acquisition contemplated under the Agreement is fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Group and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Acquisition.

Yours faithfully, For and on behalf of First Shanghai Capital Limited Helen Zee Eric Lee Managing Director Deputy Managing Director

– 26 –

GENERAL INFORMATION

APPENDIX I

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors having made all reasonable inquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other facts the omission of which would make any statement herein or this circular misleading.

2. DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES

As the Latest Practicable Date, the Directors and the chief executive of the Company had the following interests and short positions in the shares, underlying shares and debenture of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 & 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) or were required, pursuant to section 352 of the SFO, to be entered in the register of the Company referred to therein or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange:

(i) Interest in long positions of Shares

		*Number of
		Shares in	*% of total
	Type of	the	issued
Name of director	interest	Company	shares
Dr Jonathan Choi**	Corporate	2,411,661,327	65.52%
Ms Mary Yuk Sin Lam	Personal	7,500,000	0.20%
Mr Michael Wai Chung Wu	Personal	2,514,000	0.07%
Mr Stanley Kam Chuen Ko	Personal	1,200,000	0.03%

• Excludes interest in options to acquire ordinary shares of the Company

• ** Dr Jonathan Choi is deemed to be interested in 2,411,661,327 Shares by virtue of the SFO. Such interests in shares is also set out under the section “Persons having notifiable interests” shown on page 31.

– 27 –

GENERAL INFORMATION

APPENDIX I

• (ii) Interest in long positions of common shares of Sunwah International Limited (“SIL”), the ultimate holding company of the Company

				*Total	*% of
				number of	total
	Personal	Corporate	Other	common	issued
Name of Director	interest	interest	interest	shares	shares
Dr Jonathan	10,653,096	51,044,214	–	61,697,310	68.3%
Choi**		(Note 1)
Ms Mary Yuk Sin	3,301,098	–	12,915,060	16,216,158	17.9%
Lam			(Note 2)
Mr Michael Choi	106,937	–	–	106,937	0.1%
Mr Stanley Kam	20,400	–	–	20,400	<0.1%
Chuen Ko

• Excludes interest in share options and convertible debentures to acquire common shares of SIL which are disclosed in sections (v) and (vi), respectively.

• ** By virtue of his interest in SIL, Dr Jonathan Choi is deemed to be interested in the shares of the subsidiaries (including the Company as disclosed in section (i) above) of SIL under the SFO.

Notes:

• (1) Of these, 36,966,159 shares are held by Sun Wah Capital Limited. Dr Jonathan Choi is deemed to be interested in these shares as he is entitled to exercise or control the exercise of one third or more of the voting power at general meetings of Sun Wah Capital Limited.

The remaining 14,078,055 shares are held by Scarlet Red Limited. Dr Jonathan Choi is deemed to be interested in these shares as he is entitled to exercise or control the exercise of one third or more of the voting power at general meetings of Scarlet Red Limited.

• (2) Of these, 10,515,060 shares are held by Dynasty International Holdings Limited which is a wholly owned subsidiary of Global Fame Limited. Global Fame Limited is wholly owned by The WKC Lam Family Trust which is a discretionary trust with Ms Mary Yuk Sin Lam’s two children as the beneficiaries. Ms Lam is a trustee of The WKC Lam Family Trust.

Of these, 2,400,000 shares are held by Abundant World Limited. Abundant World Limited is wholly owned by The Mary Lam Family Trust which is a discretionary trust with Ms Mary Yuk Sin Lam and her two children as the beneficiaries.

– 28 –

GENERAL INFORMATION

APPENDIX I

• (iii) Interest in long positions of ordinary shares of HK Weaver Group Limited, a fellow subsidiary of the Company

		Number of	% of total
	Type of	ordinary	issued
Name of director	interest	shares	shares
Ms Mary Yuk Sin Lam	Personal	28,518	2.2%
Ms Mary Yuk Sin Lam	Other	59,620	4.6%
Mr Michael Wai Chung Wu	Personal	39,474	3.0%

(iv) Interest in options to acquire ordinary shares of the Company

The interests in the underlying Shares arise from unlisted Options (physically settled equity derivatives) granted to the Directors of the Company under the Share Option Scheme of the Company adopted on 10 November 2010 details of which are provided below:

					% which the
					aggregate long
					position in
					underlying Shares
					represents to the
				Aggregate	total ordinary
				long	share capital of
				position in	the Company in
Name of	Exercise	Date of	Exercise	underlying	issue at the Latest
Director	Period	grant	price	Shares	Practicable Date
					%
Dr Jonathan Choi	11/01/2011 to	11/01/2011	0.345	30,000,000	0.81%
	10/01/2014
Mr Michael Choi	11/01/2011 to	11/01/2011	0.345	30,000,000	0.81%
	10/01/2014
Ms Mary Yuk	11/01/2011 to	11/01/2011	0.345	10,000,000	0.27%
Sin Lam	10/01/2014

– 29 –

GENERAL INFORMATION

APPENDIX I

(v) Interest in options to acquire common shares of SIL

The interests in the underlying common shares of SIL arise from unlisted options (physically settled equity derivatives) granted to the Directors of the Company under SIL’s share option scheme details of which are provided below:

					% which the
					aggregate long
					position in
					underlying Shares
					represents to the
				Aggregate	total ordinary
				long	share capital of
				position in	SIL in issue at the
Name of	Exercise	Date of	Exercise	underlying	Latest Practicable
Director	Period	grant	price	Shares	Date
					%
Dr Jonathan Choi	15/12/2010 to	15/12/2010	C$0.55	3,000,000	3.32
	15/12/2015
Mr Michael Choi	15/12/2010 to	15/12/2010	C$0.55	3,000,000	3.32
	15/12/2015
Ms Mary Yuk	15/12/2010 to	15/12/2010	C$0.55	200,000	0.22
Sin Lam	15/12/2015

(vi) Interest in convertible unsecured debentures to acquire common shares of SIL

		Principal	Number of
	Type of	amount of	underlying
Name of directors	interests	debentures	shares	Note
Dr Jonathan Choi*	Corporate	C$4,500,000	8,181,818	(a)
Mr Michael Choi**	Corporate	C$1,500,000	2,727,273	(a)

• The debentures are held by Sun Wah Capital Limited (“SWCL”). Dr Jonathan Choi is deemed to be interested in these debentures as he is entitled to exercise or control the exercise of one third or more of the voting power at general meetings of SWCL. After the exercise of the share options and the conversion of the debentures, Dr Jonathan Choi is deemed beneficial control of a total of 72,879,128 shares.

• ** The debentures are held by Ideal Performance Limited, a company wholly owned by Mr Michael Choi who is deemed to be interested in these debentures. After the exercise of the share options and the conversion of the debentures, Mr Michael Choi is deemed beneficial control of a total of 5,834,210 shares.

Note:

• (a) The debentures bear interest at the rate of 1% per annum payable semi-annually and mature on 19 September 2013. The debentures are convertible into common shares of SIL at any time prior to the close of business on the earlier of maturity and the business day immediately preceding the date fixed for redemption at a conversion price of C$0.55 per share.

– 30 –

GENERAL INFORMATION

APPENDIX I

Save as disclosed above, as the Latest Practicable Date, none of the Directors and the chief executive of the Company held any interests and short positions in the shares, underlying shares of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 & 8 of Part XV of the SFO (including interest and short positions which they were taken or deemed to have under such provisions of the SFO) or were required, pursuant to section 352 of the SFO, to be entered in the register of the Company referred to therein or were required, pursuant to Part XV of the SFO or the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

3. PERSONS HAVING NOTIFIABLE INTERESTS

As at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, the following persons (other than a Director or the chief executive of the Company) had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

					% of total
	Country of	Number of ordinary shares			issued
Name of shareholders	incorporation	**in **	**the **	Company	shares	Note
				Deemed
		Direct interest		interest
World Developments	British Virgin	2,411,661,327		–	65.52%	(a)
Limited	Islands
Innovation Assets	British Virgin		–	2,411,661,327	65.52%	(a)
Limited	Islands
SIL	Bermuda		–	2,411,661,327	65.52%	(a)
Sun Wah Capital Limited	British Virgin		–	2,411,661,327	65.52%	(a)
	Islands
Ideal Trade Investments	British Virgin	364,640,884		–	9.9%	(b)
Limited	Islands
Choi Siu Ping	–		–	364,640,884	9.9%	(b)

Note:

• (a) These shares represent the same interest and are therefore duplicated amongst World Developments Limited, Innovation Assets Limited, SIL and SWCL. World Developments Limited is a wholly owned subsidiary of Innovation Assets Limited whose entire issued share capital is beneficially owned by SIL. SWCL beneficially owns approximately 41% of the entire issued share capital of SIL. Dr Jonathan Choi and his spouse, Ms Janice Kwan, beneficially owns or has control of more than one-third of the issued share capital of SIL and SWCL respectively and therefore is deemed (by virtue of the SFO) to be interested in these 2,411,661,327 shares.

• (b) These Shares represent the Consideration Shares to be issued to the Vendor upon Completion pursuant to the Agreement. Ms. Choi Siu Ping is the sole shareholder of the Vendor and therefore is deemed (by virtue of the SFO) to be interested in these 364,640,884 Shares.

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GENERAL INFORMATION

APPENDIX I

Save as disclosed above, as at the Latest Practicable Date, the register of substantial shareholders maintained under Section 336 of the SFO shows that the Company had not been notified of any substantial shareholders’ interests and short positions, being 5% or more of the Company’s issued share capital.

4. SERVICE CONTRACTS OF DIRECTORS

As at the Latest Practicable Date, none of the Directors had a service contract with the Company or any member of the Group which is not expired or is not determinable by the Company or any member of the Group within one year without payment of compensation, other than statutory compensation.

5. COMPETING INTERESTS OF DIRECTORS

As at the Latest Practicable Date, none of the Directors and his or her respective associate, had interests in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

6. DIRECTORS’ INTEREST IN CONTRACT

As at the date of this Circular, there was no contract or arrangement, as at the Latest Practicable Date, subsisting in which any Director is materially interested and which is significant in relation to the business of the Group.

7. DIRECTORS’ AND EXPERTS’ INTEREST IN ASSETS OF THE GROUP

As at the Latest Practicable Date, none of the Directors or the experts (as named in this section) has any interests, direct or indirect, in any assets which have been, since 30 June 2010, being the date to which the latest published audited financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

8. EXPERT AND CONSENT

The following are the qualifications of the experts who have given opinions or advice, which are contained in this circular:

Name	Qualification
First Shanghai Capital Limited	A corporation licensed under the SFO to carry out
	Type 6 (advising on corporate finance) regulated
	activity under the SFO

First Shanghai has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and/or references to its name in the form and context in which it appears as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX I

As at the Latest Practicable Date, First Shanghai does not have any shareholding, directly or indirectly, in any member of the Group or any right or option (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

The letter and recommendation given by First Shanghai are given as of the date of this circular for incorporation herein.

As at the Latest Practicable Date, First Shanghai does not have any direct or indirect interests in any assets which had been since 30 June 2010, the date of which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by, or leased to, or proposed to be acquired or disposed of by, or leased to, any members of the Group.

9. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Board confirmed that there was no material adverse change in the financial or trading position of the Group since 30 June 2010 (being the date to which the latest published audited consolidated accounts of the Group were made up).

10. DOCUMENTS FOR INSPECTION

Copy of the Agreement will be available for inspection at 5th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong during the normal business hours on any weekday (Monday to Friday), except public holidays, for a period of 14 days commencing from the date of this circular.

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NOTICE OF SPECIAL GENERAL MEETING

==> picture [116 x 46] intentionally omitted <==

SW KINGSWAY CAPITAL HOLDINGS LIMITED 滙富金融控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00188)

NOTICE IS HEREBY GIVEN that a special general meeting (the “SGM”) of the shareholders of SW Kingsway Capital Holdings Limited (the “Company”) will be held at 5th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong on Friday, 20 May 2011 at 10:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution, with or without amendment, as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT conditional on The Stock Exchange of Hong Kong Limited granting listing of, and permission to deal in, the Consideration Shares (as defined below):

• (i) the conditional sale and purchase agreement dated 30 March 2011 (“Agreement”) entered into between Best Advisory Investments Limited (“Purchaser”), an indirect wholly-owned subsidiary of the Company and Ideal Trade Investments Limited (“Vendor”) in relation to the acquisition of 10% of the entire issued share capital of VinaCapital Group Limited (“Target”) for a consideration of HK$149 million to be satisfied (a) as to HK$50 million by cash; and (b) as to HK$99 million by the issuance of 364,640,884 new shares of the Company (“Consideration Shares”) credited as fully paid at the issue price of HK$0.2715 per share to the Vendor on completion of the Agreement, a copy of which has been produced at the meeting marked “A” and signed by the chairman of the meeting for identification purpose, and all the terms and conditions thereof and the transactions contemplated under the Agreement be and are hereby approved, confirmed and ratified;

• (ii) the allotment and issue of the Consideration Shares pursuant to the terms of the Agreement (details of which are set out in the circular of the Company dated 29 April 2011 (a copy of which is tabled at the meeting and marked “B” and initialled by the chairman of the meeting for identification purposes)) be and are hereby approved; and

• (iii) any director, or any two directors of the Company if the affixation of the common seal is necessary, be and is/are hereby authorised for and on behalf of the Company to execute all such other documents, instruments and agreements and to do all such acts or things deemed by him/her to be incidental to, ancillary to or in connection with the

* For identification purposes only

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NOTICE OF SPECIAL GENERAL MEETING

matters contemplated in or relating to the Agreement, the completion thereof and to effect the transactions contemplated in the Agreement as he/she may consider necessary, desirable or expedient.”

By Order of the Board SW Kingsway Capital Holdings Limited Vincent Wai Shun Lai Company Secretary

Hong Kong, dated 29 April 2011

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Notes:

• (1) A shareholder of the Company entitled to attend and vote at the SGM is entitled to appoint one or more proxies to attend and, in the event of a poll, vote on his/her behalf. A proxy needs not be a shareholder of the Company. If more than one proxy is so appointed, the appointment shall specify the number of shares in respect of which each such proxy is so appointed.

• (2) To be valid, the form of proxy together with the authorization letter or other authority (if any) under which is signed or a certified copy thereof, must be deposited at the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the SGM, or any adjournment thereof.

• (3) Completion and delivery of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the SGM if the shareholder of the Company so desires and in such event, the instrument appointing a proxy shall be deemed to be revoked.

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