China e-Wallet Payment Group Limited — Proxy Solicitation & Information Statement 2013

Dec 30, 2013

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This document contains the notice of a Special General Meeting of Shareholders to be held at 3: 00 p.m. (Hong Kong Time) on 17 January 2014. If you are in any doubt as to what action you should take, you should immediately seek your own financial advice from your stockbroker, bank manager, solicitor or other independent professional adviser authorised under the Financial Services and Market Acts 2000 if you are taking advice in the United Kingdom. If you are in a territory outside the United Kingdom and you are in any doubt as to what action you should take, you should immediately seek your own financial advice from an appropriately authorised financial adviser. This document does not constitute an offer for sale of any Shares.

If you have sold or transferred all of your Shares or Depository Interests, please send this document, the Form of Proxy or Form of Direction (if you are a holder of Depository Interests) to the purchaser or transferee or to the stockbroker, bank, licensed securities dealer, or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. If you have sold or transferred part of your registered holding of Shares and/or Depository Interests, please contact immediately your stockbroker, licensed securities dealer, bank or other agent through whom the sale or transfer was effected.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, 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 document. The London Stock Exchange has not itself examined or approved the contents of this document.

Your attention is drawn to the letter from the Board and to the recommendation that Shareholders vote in favour of the Resolution to be proposed at the Special General Meeting.

RCG Holdings Limited

宏 霸 數 碼 集 團（ 控 股 ）有 限 公 司[*]

(a company incorporated in Bermuda with limited liability)

(Stock Codes: HKSE: 802; AIM: RCG)

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE AND ALLOT SHARES AND

NOTICE OF SPECIAL GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Amasse Capital

����������������

Notice of the Special General Meeting, to be held at Lot 1, Jalan Teknologi 3/5, Taman Sains Selangor 1, Kota Damansara, Petaling Jaya, Selangor, Malaysia at 3: 00 p.m. (Hong Kong Time) on 17 January 2014, is set out at the end of this document. Shareholders will also find enclosed a Form of Proxy or Form of Direction (if you are a holder of Depository Interests) for use at the Special General Meeting.

If you are a Shareholder and are not able to attend the Special General Meeting, you are requested to complete and return the enclosed Form of Proxy in accordance with the instructions printed thereon and any power of attorney or other authority (if any) under which it is signed, or a certified copy of that power of attorney, to Union Registrars Limited at 18/F., Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong, or, to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom as soon as possible but in any event not less than 48 hours before the time appointed for holding the Special General Meeting.

If you are not a registered Shareholder but hold your Shares in uncertificated form through Depository Interests, you are requested to complete and return the enclosed Form of Direction in accordance with the instructions printed thereon and any power of attorney or other authority (if any) under which it is signed, or a certified copy of that power of attorney, to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom as soon as possible but in any event not less than 72 hours before the time appointed for holding the Special General Meeting.

Completion and return of the Form of Proxy or Form of Direction will not preclude Shareholders or Depository Interest Holders from attending and voting in person at the Special General Meeting, or any adjournment thereof, should they so wish and in such event the Form of Proxy shall be deemed to be revoked.

*For purpose of identification only

31 December 2013

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18

– i –

DEFINITIONS

The following definitions apply throughout this document and the Form of Proxy and Form of Direction unless the context requires otherwise:

• ‘‘AIM’’ the AIM market operated by the LSE; ‘‘AIM Rules’’ the AIM Rules for Companies published by the LSE from time to time; ‘‘Amasse Capital’’ Amasse Capital Limited, a corporation licensed under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) to carry out type 6 (advising on corporate finance) regulated activities;

• ‘‘Annual General the annual general meeting of the Company held on 28 June 2013 at Meeting’’ which the Shareholders approved, among other matters, the Existing General Mandate;

• ‘‘Board’’ the board of Directors; ‘‘Bye-laws’’ the Bye-laws of the Company; ‘‘Capita Asset Services’’ Capita Asset Services Limited, being the company appointed to maintain the Jersey branch share register;

• ‘‘CCASS’’ the Central Clearing and Settlement System, operated by the Hong Kong Securities Clearing Company Limited;

• ‘‘China’’ or ‘‘PRC’’ the People’s Republic of China; ‘‘Companies Act’’ the Companies Act 1981 of Bermuda; ‘‘Company’’ or ‘‘RCG’’ RCG Holdings Limited, a company incorporated in Bermuda with limited liability and the issued Shares of which are listed on the Hong Kong Stock Exchange, admitted to trading on AIM and are also tradeable on the ISDX Secondary market;

• ‘‘Depository’’ Capita IRG Trustees Limited; ‘‘Depository Interests’’ or the depository interests representing entitlements to Shares on a one‘‘DIs’’ for-one basis;

• ‘‘Depository Interest holders of Depository Interests; Holders’’

• ‘‘Directors’’ the directors of the Company; ‘‘Existing General the general mandate granted by the Shareholders to the Directors at the Mandate’’ Annual General Meeting to allot, issue and deal with up to 20% of the aggregate nominal value of the Shares in issue on the date of the Annual General Meeting;

• ‘‘Form of Direction’’ the form of direction for use by Depository Interest Holders at the Special General Meeting;

– 1 –

DEFINITIONS

• ‘‘Form of Proxy’’ the form of proxy for use by Shareholders at the Special General Meeting;

• ‘‘General Mandate the general mandate proposed to be granted to the Directors at the Refreshment’’ Special General Meeting to allot, issue and otherwise deal with additional Shares not exceeding 20% of the share capital of the Company in issue on the date of the passing of the General Mandate Refreshment Resolution;

• ‘‘General Mandate the ordinary resolution to approve the General Mandate Refreshment Refreshment to be proposed at the Special General Meeting; Resolution’’

• ‘‘Group’’ the Company and its subsidiaries, is an international developer and solutions providers in the biometric, RFID and security industries and delivers high-performance, convenient security systems for enterprises and consumers. The Group’s business is divided generally into four categories: ‘‘Trading of security and Biometric Products’’, ‘‘Solutions, Projects and Services’’, ‘‘Internet and Mobile Applications and of Related Accessories’’ and ‘‘Commodities Trading’’;

‘‘HKSCC’’ the Hong Kong Securities Clearing Company Limited;

‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China;

• ‘‘Hong Kong Listing the Rules Governing the Listing of Securities on the HKSE; Rules’’

• ‘‘Hong Kong Stock the Stock Exchange of Hong Kong Limited; Exchange’’ or ‘‘HKSE’’

• ‘‘HKSE Share share certificates representing Shares listed on the HKSE; Certificates’’

• ‘‘HKT’’ Hong Kong Time;

• ‘‘Independent Board an independent committee of the Board, comprising all independent Committee’’ non-executive Directors, formed to advise the Independent Shareholders in respect of the General Mandate Refreshment;

• ‘‘Independent Financial Amasse Capital, being the independent financial adviser appointed to Adviser’’ advise the Independent Board Committee and the Independent Shareholders in respect of the General Mandate Refreshment;

• ‘‘Independent Shareholder(s) other than the Directors (excluding independent nonShareholder(s)’’ executive Directors) and their associates;

‘‘ISDX’’ ICAP Securities & Derivatives Exchange Limited, a recognised Investment Exchange under the Financial Services and Markets Act 2000 (formerly PLUS Stock Exchange/PLUS-SX);

– 2 –

DEFINITIONS

• ‘‘Latest Practicable Date’’ 23 December 2013, being the last practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular;

• ‘‘London Stock London Stock Exchange plc; Exchange’’ or ‘‘LSE’’

• ‘‘New General Mandate’’ the new general mandate proposed to be sought at the special general meeting to authorise the Directors to allot, issue and deal with up to 20% of the aggregate nominal value of the shares in issue on the date of passing the resolution approving such mandate;

• ‘‘Shareholders’’ holders of Shares and where the context requires, Depository Interest Holders;

• ‘‘Shares’’ ordinary shares with a nominal value of HK$0.01 each in the capital of the Company;

• ‘‘Special General the special general meeting of Shareholders to be convened at 3: 00 p.m. Meeting’’ (Hong Kong Time) on 17 January 2014 at Lot 1, Jalan Teknologi 3/5, Taman Sains Selangor 1, Kota Damansara, Petaling Jaya, Selangor, Malaysia (or any adjournment of it), notice of which is set out at the end of this document;

• ‘‘UK’’ the United Kingdom of Great Britain and Northern Ireland;

• ‘‘Union Registrars’’ Union Registrar Limited, being the company appointed to maintain the Hong Kong branch share register;

• ‘‘%’’ per cent.

– 3 –

LETTER FROM THE BOARD

RCG Holdings Limited

宏 霸 數 碼 集 團（ 控 股 ）有 限 公 司[*]

(a company incorporated in Bermuda with limited liability)

(Stock Codes: HKSE: 802; AIM: RCG)

Executive Directors: Li Jinglong Zhang Ligong Wang Zhongling

Independent Non-executive Directors: Pieter Lambert Diaz Wattimena Kwan King Wah Zeng Min

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

Principal place of business in Hong Kong: Room 626–629, Corporation Park, 11 On Lai Street, Siu Lee Yuen, Sha Tin, New Territories, Hong Kong

Principal Place of business outside Hong Kong: Lot 1, Jalan Teknologi 3/5 Taman Sains Selangor 1 Kota Damansara Petaling Jaya Selangor, Malaysia

31 December 2013

To Shareholders and Depository Interest Holders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE AND ALLOT SHARES AND

NOTICE OF SPECIAL GENERAL MEETING

1. INTRODUCTION

The General Mandate Refreshment is subject to the passing of the General Mandate Refreshment Resolution by the Independent Shareholders at the Special General Meeting to be held on 17 January 2014, notice of which is set out on pages 18 to 20 of this document.

*For purpose of identification only

– 4 –

LETTER FROM THE BOARD

The purpose of this document is to explain the background to and reasons for the General Mandate Refreshment, and why the Board considers the General Mandate Refreshment to be in the best interests of the Company and Shareholders as a whole.

2. CURRENT TRADING AND STRATEGY

The Company announced its unaudited financial results for the six months ended 30 June 2013 on 30 August 2013. During the period, RCG registered a net loss in its financials, but saw an increase in turnover, which was largely attributable to contributions from the Company’s Commodities Trading Segment. The Company reported total revenues of HK$421.1 million in the six months ending 30 June 2013, representing an increase of 4.6% compared to the same period in 2012.

The Group’s strategic direction for all business segments is centered around the following key areas:-

1) Re-aligning the core business

The Group is committed to stabilising its core businesses, and will ensuring the timely completion of existing projects by addressing key competency areas to turn the businesses around.

Efforts to enhance governance and controls within the Group are ongoing.

2) Maximizing potential across all core businesses

The Company continues to seek to ensure that its businesses are performing optionally and to strengthen their competitiveness by enhancing operational efficiencies. The core focus will be to inculcate a culture of thrift and cost-consciousness across the Group.

3) Review the portfolio mix of the business within the Group

The Group is continuously evaluating the performance and competitiveness of its existing businesses using relevant financial and strategic diagnostics. Key contributions and strategic fit of each business units are carefully weighted to ensure that the Group’s portfolio of businesses remained dynamic and strategically competitive by indentifying businesses that will expand, divest, incubate and/or acquire.

The Company expects to require additional capital to fund the employed strategies and to repay existing loans.

3. BACKGROUND TO AND REASONS FOR THE PROPOSED GENERAL MANDATE REFRESHMENT

At the Annual General Meeting, Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Existing General Mandate to issue not more than 139,235,299 Shares, being 20% of the aggregate nominal amount of the issued share capital of the Company of 696,176,496 Shares as at the date of passing of the resolution.

During the period from the grant of the Existing General Mandate to the Latest Practicable Date, 139,230,000 Shares from the Existing General Mandate had been issued by the Company. As at the Latest Practicable Date, the Company had an aggregate of 835,406,496 Shares in issue and

– 5 –

LETTER FROM THE BOARD

5,299 Shares remained unissued pursuant to the Existing General Mandate, representing approximately 0.006% of the existing issued share capital of the Company. Save for the proposed grant of the General Mandate Refreshment, there has been no refreshment of the Existing General Mandate since the Annual General Meeting.

The Board remains convinced that equity fundraising is the most efficient way of financing the Company’s Strategies as it broadens the Company’s shareholder base and also all forms of financing do this to continue pursuing its previously-stated objectives. Accordingly, the Board proposes to replace the Existing General Mandate with the General Mandate Refreshment giving the Directors discretion and flexibility to raise funds through the issue of new Shares. The Company does not currently have any plans to raise equity within any particular time frame. However the Company will not exclude the possibility of doing so in the near future should a suitable opportunity arise. It is fair and reasonable for the Group to remain financial flexible in obtaining future financing to meet its urgent liquidity needs. Therefore the Company considers the General Mandate Refreshment will provide the Company with a readily available mechanism to respond to any market demand, capture fund raising opportunities and to avoid the uncertainties which may be associated with a specific mandate which requires shareholders’ approval and which may not be obtained in a timely manner.

Other than issuing shares under the proposed General Mandate Refreshment, the Board indicates that the Company has considered other financing methods such as bank financing, debt financing, rights issue and open offer in order to meet its liquidity needs and financing requirements arising from any future investment of the Group. However, the Directors are of the view that the ability of the Group to obtain bank and debt financing usually depends on the Group’s profitability, financial position and market condition. Debt financing usually incurs interest burden on the Group. Furthermore, bank and debt financing are subject to lengthy negotiations with banks while rights issue and open offer are subject to lengthy procedures in publishing prospectus, and subscribing and allotting offer shares to investors. In light of the above, the Directors consider that these alternatives to be relatively uncertain and time-consuming as compared with the proposed General Mandate Refreshment to obtain additional funding.

As such, the General Mandate Refreshment serves as an alternative for the Company to finance the Group’s investment and the Board believes it serves the best interests of the Group.

4. GENERAL MANDATE REFRESHMENT

For the reasons set out above, the Board proposes to replace the Existing General Mandate with the General Mandate Refreshment which will give the Directors authority to exercise the power of the Company to issue new Shares representing up to 20% of the issued share capital of the Company as at the date of the Special General Meeting. The Company intends to utilise the General Mandate Refreshment to fund the growth of business portfolio mix within the Group, to repay existing loans, for general working capital purposes and potentially for future acquisitions. The Group has existing banking facilities, includes a term loan in the amount of approximately HK$60.6 million and HK$40.8 million respectively, which are expected to be reduced in full before the next annual general meeting of the Company. If a placing of new Shares is conducted, a portion of the funds raised are intended to repay all or some of these banking facilities. It is estimated that the Group will deploy its existing financial resources in the growth of business portfolio mix within the Group which is expected to be fully utilised by the second quarter of 2014, in addition to funding general working capital requirements and potential future acquisitions. The above plan is only preliminary and made based on the present circumstances of the Group. As a placing of new Shares

– 6 –

LETTER FROM THE BOARD

will only be conducted after approval is given by Shareholders of the General Mandate Refreshment, the Company’s plan may change at the time when a placing is conducted. The Company’s plan for the use of proceeds will be announced when placings of new shares are actually conducted.

Subject to the approval of the Independent Shareholders for the General Mandate Refreshment, and assuming that no other Shares will be issued and/or repurchased by the Company on or prior to the date of the Special General Meeting, the Shares in issue as at the date of the Special General Meeting would be 835,406,496 Shares, which means that under the General Mandate Refreshment, the Directors would be authorised to allot and issue a maximum of 167,081,299 Shares.

Pursuant to Rule 13.36(4)(a) of the Hong Kong Listing Rules, the General Mandate Refreshment requires the approval of the Independent Shareholders at the Special General Meeting at which any of the controlling Shareholders and their associates or, where there are no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant resolution. Accordingly, the executive Directors, Mr. Li Jinglong, Mr. Zhang Ligong and Mr. Wang Zhongling, and their respective associates shall abstain from voting for the General Mandate Refreshment Resolution at the Special General Meeting.

Set out below is a summary of the equity fund-raising exercises conducted by the Company in the past 12 months.

				Percentage of
		Approximate		share capital as
Date of		net amount	Number of	at the date of	Proposed use of
announcement	Description	raised	Shares issued	announcement	proceeds	Actual use of proceeds
10 June 2013	Issuance of 98.6 million	HK$35.003	98,600,000	11.80%	Deployment of	Fully utilised as
	Shares under a Placing	million			biometrics and	intended
	agreement signed				security solutions
	between the Company				and equipment in
	and the Placing agent on				both private and
	30 May 2013 at a price				government related
	of HK$0.355				sectors
26 September 2013	Issuance of 139,230,000	HK$34.8075	139,230,000	16.67%	Deployment of	Fully utilised as
	Shares under a Placing	million			biometrics and	intended
	agreement between the				security solutions
	Company and the				and equipment in
	Placing agent on 10				both private and
	September 2013 at a				government related
	price of HK$0.25				sectors

5. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

An Independent Board Committee comprising all the independent non-executive Directors, Mr. Pieter Lambert Diaz Wattimena, Mr. Kwan King Wah, and Mr. Zeng Min, has been established to advise the Independent Shareholders in respect of the grant of the General Mandate Refreshment.

Amasse Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the grant of the General Mandate Refreshment.

– 7 –

LETTER FROM THE BOARD

6. SPECIAL GENERAL MEETING

The Special General Meeting will be convened at 3: 00 p.m. (Hong Kong Time) on 17 January 2014 on at Lot 1, Jalan Teknologi 3/5, Taman Sains Selangor 1, Kota Damansara, Petaling Jaya, Selangor, Malaysia for the Shareholders and Independent Shareholders to consider, and if thought fit, pass an ordinary resolution to approve the General Mandate Refreshment. In accordance with the Hong Kong Listing Rules, all the Directors (excluding the Independent Board Committee) and their associates shall abstain from voting for the General Mandate Refreshment at the Special General Meeting.

7. ACTION TO BE TAKEN WITH REGARDS TO THE SPECIAL GENERAL MEETING

If you are a Shareholder and are not able to attend the Special General Meeting, you are requested to complete and return the enclosed Form of Proxy in accordance with the instructions printed thereon and any power of attorney or other authority (if any) under which it is signed, or a certified copy of that power of attorney, to Union Registrars Limited at 18/F., Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong, or, to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom as soon as possible but in any event not less than 48 hours before the time appointed for holding the Special General Meeting.

If you are not a registered Shareholder but hold your Shares in uncertificated form through Depository Interests, you are requested to complete and return the enclosed Form of Direction in accordance with the instructions printed thereon and any power of attorney or other authority (if any) under which it is signed, or a certified copy of that power of attorney, to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom as soon as possible but in any event not less than 72 hours before the time appointed for holding the Special General Meeting.

Completion and return of the Form of Proxy will not preclude Shareholders from attending and voting at the Special General Meeting, or any adjournment thereof, if they so wish and in such event the relevant Form of Proxy shall be deemed to be revoked. If you hold your Shares via the Depository Interest arrangement and would like to attend the Special General Meeting, please contact the Depository, Capita IRG Trustees Limited, by emailing custodymgt@capitaregistrars.com.

8. RECOMMENDATION

Having considered the advice of the independent financial adviser, Amasse Capital, the Independent Board Committee is of the opinion that the General Mandate Refreshment is in the best interest of Independent Shareholders as a whole and unanimously recommends Independent Shareholders to vote in favour of the General Mandate Refreshment Resolution.

9. PERIOD DURING WHICH GENERAL MANDATE REFRESHMENT WILL REMAIN EFFECTIVE

The General Mandate Refreshment will, if approved, remain effective until the earliest of (i) the conclusion of the next annual general meeting of the Company; (ii) the date by which the next annual general meeting is required by the bye-laws of the Company or the Companies Act 1981 of Bermuda or any other applicable law of Bermuda to be held; and (iii) the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company.

– 8 –

LETTER FROM THE BOARD

10. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Hong Kong Listing Rules for the purposes of giving information with regards to the General Mandate Refreshment. The Directors, having made all reasonable enquiries, 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 matters the omission of which would make any statement herein or this circular misleading.

Yours faithfully, On behalf of the Board of RCG Holdings Limited Li Jinglong Director

– 9 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the proposed General Mandate Refreshment:

RCG Holdings Limited

宏 霸 數 碼 集 團（ 控 股 ）有 限 公 司[*]

(a company incorporated in Bermuda with limited liability)

(Stock Codes: HKSE: 802; AIM: RCG)

31 December 2013

To Independent Shareholders

Dear Sir or Madam,

PROPOSED GENERAL MANDATE REFRESHMENT TO ISSUE AND ALLOT SHARES

We have been appointed as the Independent Board Committee to consider and advise you on the proposed General Mandate Refreshment, details of which are set out in the circular dated 31 December 2013 issued by the Company to the Shareholders (the ‘‘Circular’’), of which this letter forms part. Terms defined in the Circular will have the same meanings when used herein unless the context otherwise requires.

We wish to draw your attention to the letter from the Board set out on pages 4 to 9 and the letter of advice from Amasse Capital set out on pages 11 to 17 of the Circular respectively.

Having taken into account the principal factors and reasons considered by Amasse Capital, its conclusion and advice, we concur with the view of Amasse Capital and consider that the terms of the General Mandate Refreshment are fair and reasonable so far as the Independent Shareholders are concerned and the General Mandate Refreshment is in the interests of the Company and the Shareholders as a whole.

Accordingly, we recommend you to vote in favour of the ordinary resolution to be proposed at the Special General Meeting to approve the General Mandate Refreshment and the transactions contemplated thereunder.

Yours faithfully,

Pieter Lambert Diaz Wattimena Kwan King Wah Zeng Min Independent Board Committee

*For purpose of identification only

– 10 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the General Mandate, and is prepared for inclusion in this circular.

Amasse Capital

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31 December 2013

The Independent Board Committee and the Independent Shareholders

RCG Holdings Limited

Room 626–629, Corporation Park, 11 On Lai Street, Siu Lek Yuen, Sha Tin, New Territories, Hong Kong

Dear Sirs,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE AND ALLOT SHARES

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the General Mandate Refreshment, details of which are set out in this circular, of which this letter forms a part. We have been retained by the Company to advise the Independent Board Committee and the Independent Shareholders as to whether the General Mandate Refreshment is fair and reasonable and whether the grant of the new general mandate (‘‘New General Mandate’’) to the Board to exercise the power of the Company to allot and issue shares not exceeding 20% of the issued share capital of the Company as at the date of the Special General Meeting is in the interests of the Company and its Shareholders as a whole, and to advise Independent Shareholders on how to vote. Unless the context otherwise requires, capitalised terms used in this letter have the same meanings as those defined in this circular.

As at the Latest Practicable Date, there is no controlling Shareholder as defined under the Listing Rules. If on the date of the Special General Meeting, the Company has any controlling Shareholder(s), the controlling Shareholder(s) and their associates or, where there are no controlling Shareholder(s), Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates, if they hold any Shares, shall abstain from voting in favor of the relevant resolutions for approving the New General Mandate pursuant to Rule 13.36(4)(a) of the Listing Rules.

The Independent Board Committee, comprising Mr. Pieter Lambert Diaz Wattimena, Mr. Kwan King Wah and Mr. Zeng Min, all being independent non-executive Directors, has been established to consider the terms of the New General Mandate and to advise the Independent Shareholders in relation to the General Mandate Refreshment.

– 11 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In formulating our opinion and advice, we have relied upon accuracy of the information and representations contained in this circular and information provided to us by the Company and its Director(s). We have assumed that all statements and representations made or referred to in this circular were true at the time they were made and continue to be true at the date of the Special General Meeting. We have also assumed that all statements of belief, opinion and intention made by the Director(s) in this circular were reasonably made after due and careful enquiry.

We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Company and its Director(s) and have been confirmed by the Directors that no material facts and representations the omission of which would make any statement in this circular, including this letter, misleading. We have not, however, conducted any independent in-depth investigation into the business affairs, financial position or future prospects of the Group, nor have we carried out any independent verification of the information provided by the Director(s) and management of the Company. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information and representations contained in this circular and to provide a reasonable basis for our recommendation regarding the General Mandate Refreshment.

PRINCIPAL FACTORS CONSIDERED

In giving our recommendation to the Independent Board Committee and the Independent Shareholders in respect of the General Mandate Refreshment, we have taken into consideration the following factors and reasons:

1. Background and Reasons for the General Mandate Refreshment

The Group is engaged in business of biometric and RFID products, solutions services, internet and mobile application and related services and commodities trading.

At the annual general meeting of the Company held on 28 June 2013, the Shareholders passed among others, ordinary resolutions to grant the Directors the Existing General Mandate to issue, allot and otherwise deal with a maximum of 139,230,000 new shares, representing 20% of the total nominal amount of the share capital of the Company in issue on the date of passing such resolutions.

As a result of the placing of 139,230,000 new Shares (the ‘‘Placing’’) announced on 26 September 2013, the Existing General Mandate has been fully utilized. There has been no refreshment of the Existing General Mandate since the said annual general meeting.

In order to provide the Company with maximum financial flexibility for the Group to issue new Shares in the future, the Board proposed to seek approval by the Independent Shareholders at the Special General Meeting in respect of the New General Mandate, in which the Directors shall be granted the authority to allot and issue not exceeding 20% of the issued share capital of the Company as at the date of the Special General Meeting. The New General Mandate will be in force when it is approved by the Independent Shareholders at the Special General Meeting. As at the Latest Practicable Date, the total number of issued Shares were 835,406,496 Shares. For illustrative purpose and on the assumptions that there will be no further issue of new Shares from the Latest Practicable Date to the date of the Special General Meeting (both dates inclusive), 835,406,496 Shares will be in issue as at the date of the Special General Meeting and the Board will be granted the power to allot and issue further 167,081,299

– 12 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Shares, being 20% of the total number of issued shares of the Company as at the date of the Special General Meeting, under the New General Mandate when it is approved by the Independent Shareholders at the SGM.

As set out in the Company’s annual report for the year ended 31 December 2012 and interim report for the six months ended 30 June 2013, the Company recorded a net loss of HK$1,846.1 million for the year ended 31 December 2012 (2011: net loss of HK$1,550.8 million) and net loss of HK$259.8 million for the six months ended 30 June 2013 (2012: net loss of HK$444.7 million). The Company had net cash outflow from operating activities for the past two years ended 31 December 2012 and for the six months ended 30 June 2012. Further to the significant loss of the business of the Group since 2011 financial year, and the Group’s principal businesses still facing huge challenges, we consider that there is no certainty that the existing cash level will be adequate for its future working capital purposes. In addition, we also noted the Group had a term loan facility amounting to HK$43.6 million according to the Company’s interim report for the six months ended 2013. In light of the above, even though the Company has recently raised fund by utilizing the Existing General Mandate, it would be fair and reasonable for the Group to remain financial flexible in obtaining future financing to meet its urgent liquidity needs, if any, by the General Mandate Refreshment.

Further, in the event that the Group identifies suitable investment opportunities and does not have sufficient cash on hand, and it fails to obtain loans on terms which the Directors consider acceptable to the Group, or it cannot find other alternatives to finance such investment opportunity in a timely manner, the Group may lose its bid in an otherwise favorable investment.

Accordingly, we consider that the General Mandate Refreshment is fair and reasonable and is in the interests of the Company and its Shareholders as a whole.

2. Financial Flexibility

According to the Letter from the Board, the Company does not currently have any plans to raise equity within any particular time frame. However, the Company will not exclude the possibility of doing so in the near future should a suitable opportunity arise.

The Directors believe that the General Mandate Refreshment will enable the Company to take advantage of the market condition to raise additional funds for the Company through the issue of new Shares when the Directors think fit and appropriate in view of the then liquidity position of the Group and when suitable investment opportunities are identified.

We consider that the granting of the New General Mandate could enhance the financing flexibility of the Company to raise capital, if and when required, through the placing of Shares to further strengthen the Company’s capital base and to further develop the Group. While the Directors consider that investment decisions may have to be made immediately should suitable investment opportunities arise, we agree that the General Mandate Refreshment would then provide the Group with the maximum flexibility allowed under the Listing Rules to take advantage of market conditions to raise additional capital, through the placing of new Shares.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Other Financing Alternatives

Other than raising fund by way of placing of new Shares, the Board indicates that the Company will consider other financing methods such as bank financing, debt financing, rights issue and open offer in order to meet its liquidity needs and financing requirements arising from any future investment of the Group, depending on the then financial position, capital structure, cost of funding of the Group and urgency of such funding needs as well as the then market condition. However, the Directors are of the view that the ability of the Group to obtain bank and debt financing usually depends on the Group’s profitability, financial position and the then prevailing market condition. Debt financing will usually incur interest burden on the Group. Furthermore, bank and debt financing may be subject to lengthy negotiations with banks while rights issue and open offer may be subject to lengthy procedures in publishing the prospectus, and subscribing and allotting offer shares to investors. In light of the above, the Directors consider that these alternatives to be relatively uncertain and time-consuming as compared to placing of new Shares under general mandate to obtain additional funding.

As such, the New General Mandate will serve as one of the alternatives for the Company to finance the Group’s investment and the Board will use the method that serves the best interests of the Group. We consider that it is sensible to make reference to the then financial position, capital structure, cost of funding of the Group and urgency of such funding needs as well as the then market condition in order to decide a suitable financing method for the future investment of the Group.

4. Potential Dilution to Shareholdings of the Shareholders

Shareholders should note that the New General Mandate if approved by the Independent Shareholders at the SGM will be and continue to be in force until the earliest of (i) the conclusion of the Company’s next annual general meeting, (ii) the expiration of the period within which the next annual general meeting of the Company is required to be held, and (iii) the revocation or variation of the authority given under the relevant resolutions to be proposed as ordinary resolutions of the Shareholders in general meeting.

For illustrative purpose, the table below sets out the potential dilution effect on the shareholding of the Company upon full utilization of the New General Mandate on the assumptions that there will be no further issue of new Shares since the Latest Practicable Date.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Crossover Global Limited (Note 1) Chan Chun Fai (Note 1) Qin Chuhua (Note 1) Yang Zhijian (Note 1) Veron International Limited (Note 2) Kung Nina (Estate of Nina Kung also known as Nina T.H. Wang) (Note 2) Lam Hok Chung Rainer (Note 2) Jong Yat Kit (Note 2) Yu Sai Hung (Note 2) The Offshore Group Holdings Ltd. (Note 3) Chan Chun Chuen (Note 3) Tam Miu Ching (Note 3) Public Shares to be issued under the New General Mandate Others Total	As at the Latest Practicable Date No. of Shares Approx. % 104,352,941 12.49 104,352,941 12.49 104,352,941 12.49 104,352,941 12.49 65,662,832 7.86 65,662,832 7.86 65,662,832 7.86 65,662,832 7.86 65,662,832 7.86 53,515,556 6.40 53,515,556 6.40 53,515,556 6.40 — — 611,875,167 73.25 835,406,496 100	Upon full exercise of the New General Mandate No. of Shares Approx. % 104,352,941 10.41 104,352,941 10.41 104,352,941 10.41 104,352,941 10.41 65,662,832 6.55 65,662,832 6.55 65,662,832 6.55 65,662,832 6.55 65,662,832 6.55 53,515,556 5.33 53,515,556 5.33 53,515,556 5.33 167,081,299 16.67 611,875,167 61.04 1,002,487,795 100	Upon full exercise of the New General Mandate No. of Shares Approx. % 104,352,941 10.41 104,352,941 10.41 104,352,941 10.41 104,352,941 10.41 65,662,832 6.55 65,662,832 6.55 65,662,832 6.55 65,662,832 6.55 65,662,832 6.55 53,515,556 5.33 53,515,556 5.33 53,515,556 5.33 167,081,299 16.67 611,875,167 61.04 1,002,487,795 100
			100

Notes:

1. The entire issued share capital of Crossover Global Limited (‘‘Crossover’’) is beneficially owned by three individuals, namely Mr. Chan Chun Fai, Mr. Qin Chuhua and Mr. Yang Zhijian at the percentage 45%, 29% and 26% respectively. Therefore, Mr. Chan Chun Fai, Mr. Qin Chuhua and Mr. Yang Zhijian are deemed to be interested in the 104,352,941 underlying shares held by Crossover under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the ‘‘SFO’’).

2. The entire issued share capital of Veron International Limited is beneficially owned by Ms. Kung Nina. Therefore, Ms. Kung Nina is deemed to be interested in the 65,662,832 shares held by Veron International Limited under the SFO. Mr. Lam Hok Chung Rainier, Mr. Jong Yat Kit and Mr. Yu Sai Hung solely as Joint and Several Administrators pendente lite of Estate of Ms. Nina Kung.

3. The entire issued share capital of The Offshore Group Holdings Limited (‘‘Offshore’’) is beneficially owned by an individual, Mr. Chan Chun Chuen. Ms. Tam Miu Ching is the wife of Mr. Chan Chun Chuen. Therefore, Mr. Chan Chun Chuen and Ms. Tam Miu Ching are deemed to be interested in the 53,515,556 shares held by Offshore under the SFO.

Upon utilization in full of the New General Mandate, 167,081,299.2 new Shares can be allotted and issued, representing approximately 20% and 16.7% of the total issued share capital of the Company as at the Latest Practicable Date and the then enlarged issued share capital of the Company respectively. The aggregate shareholding of the public Shareholders upon full utilization of the New General Mandate will, therefore, decrease from approximately 73.25% to approximately 61.04%, representing a potential maximum dilution of approximately 16.7%.

Considering that the shareholding of all the existing Shareholders will be diluted proportionally to their respective shareholdings upon utilization of the New General Mandate, we consider that such maximum potential dilution to the shareholdings of the Shareholders to be justifiable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Fund raising activities in the past twelve months

Set out below is the equity fund raising activities conducted by the Company in the past twelve months prior to the Latest Practicable Date:

Net proceeds Actual use of Date of raised net proceeds announcement Fund raising activities (approximate) Intended use of proceeds (approximate) 10 June 2013 Issuance of 98.6 HK$35,003,000 Deployment of Fully utilised million Shares biometrics and as intended under a placing security solutions and agreement signed equipment in both between the private and Company and the government related Placing agent on 30 sectors May 2013 at a price of HK$0.355 26 September 2013 Issuance of HK$34,807,500 Deployment of Fully utilised 139,230,000 Shares biometrics and as intended under a placing security solutions and agreement between equipment in both the Company and private and the Placing agent on government related 10 September 2013 sectors at a price of HK$0.25

Save as and except for the above, the Company had not conducted any other equity fund raising activities in the past twelve months immediately prior to the Latest Practicable Date.

RECOMMENDATION

Taking into account that

• (i) the Group recorded significant loss of the business since 2011 financial year;

• (ii) the General Mandate Refreshment will allow the increase in capital which may be raised by way of new equity issue under the New General Mandate so as to improve the financial position of the Group;

• (iii) the General Mandate Refreshment will provide an alternative means of financing to the Group for any urgent funding needs and/or future development of its business and potential investment as and when such opportunities arise; and

• (iv) the fact that the shareholding of all the existing Shareholders will be diluted proportionally to their respective shareholdings upon utilization of the New General Mandate, we consider that the General Mandate Refreshment is fair and reasonable and is in the interests of the Company so far as the Shareholders as a whole are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the SGM to approve the New General Mandate.

Yours faithfully, For and on behalf of Amasse Capital Limited Michael Lam Managing Director

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NOTICE OF SPECIAL GENERAL MEETING

RCG Holdings Limited

宏 霸 數 碼 集 團（ 控 股 ）有 限 公 司[*]

(a company incorporated in Bermuda with limited liability)

(Stock Codes: HKSE: 802; AIM: RCG)

NOTICE IS HEREBY GIVEN that a Special General Meeting of holders of ordinary shares of HK$0.01 each in the capital of RCG Holdings Limited (the ‘‘Company’’) will be held at Lot 1, Jalan Teknologi 3/5, Taman Sains Selangor 1, Kota Damansara, Petaling Jaya, Selangor, Malaysia at 3: 00 p.m. (Hong Kong Time) on 17 January 2014 for the purpose of considering and (if thought fit) passing the Resolution set out below as an ordinary resolution (with or without amendment):

ORDINARY RESOLUTION

‘‘THAT, to the extent not already exercised, the mandate to allot and issue shares of the Company given to the directors (the ‘‘Directors’’) of the Company at the annual general meeting (the ‘‘Annual General Meeting’’) of the Company held on 28 June 2013 be and is hereby revoked and replaced by the following new mandate:

THAT:

• (a) subject to paragraph (c) below, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.01 each in the capital of the Company (the ‘‘Shares’’) and to make or grant offers, rights, agreements and options (including warrants, bonds, debentures convertible into Shares), which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

• (b) the Directors be and hereby authorised during the Relevant Period to make or grant offers, rights, agreements and options (including warrants, bonds, debentures convertible into Shares) which might require the exercise of such powers during or after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise), issued or dealt with by the Directors pursuant to the approval in paragraphs (a) and (b) above, otherwise than pursuant to (i) a Rights Issue (as defined below); or (ii) the exercise of any options granted under the existing share option scheme of the Company; or (iii) any scrip dividend or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Bye-Laws of the Company in force from time to time; or (iv) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares, shall not exceed the aggregate of 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution; and

*For purpose of identification only

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NOTICE OF SPECIAL GENERAL MEETING

• (d) for the purposes of this resolution:

‘‘Relevant Period’’ means the period from the date of the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company, the Companies Act 1981 of Bermuda or any other applicable laws of Bermuda to be held; or

• (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this resolution;

‘‘Rights Issue’’ means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Directors to holders of Shares on the register on a fixed record date in proportion to their then holdings of Shares (subject to such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements, or having regard to any restrictions or obligations under the laws of, or the requirements of, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction outside Hong Kong or any recognised regulatory body or any stock exchange outside Hong Kong).’’

Yours faithfully, On behalf of the Board of RCG Holdings Limited Li Jinglong Director

Hong Kong, 31 December 2013

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NOTICE OF SPECIAL GENERAL MEETING

Notes:

1. A Form of Proxy or Form of Direction (as applicable) is enclosed.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person duly authorised to sign the same.

3. Any member entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company. A proxy need not be a member. In addition, a proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.

4. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a certified copy of such a power or authority, shall be delivered to the Company’s Registrars, Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom (for shareholders whose names appear in the Company’s branch register in Jersey and who hold shares in certificated form), or, in Hong Kong, Union Registrars Limited at 18/F., Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong, (for shareholders whose names appear in the Company’s branch register in Hong Kong) not less than 48 hours before the time appointed for holding the meeting (or any adjournment thereof) at which the person named in the instrument proposes to vote.

5. Delivery of an instrument appointing a proxy shall not preclude a member from attending and voting in person at the meeting convened and in such event the Form of Proxy shall be deemed to be revoked.

6. In the case of joint holders of any share, if more than one of such joint holders be present at any meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.

7. Any corporation which is a member of the Company may by resolution of its Directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company. The person so authorised shall be entitled to exercise the same powers on behalf of the corporation as the corporation could exercise if it were an individual member of the Company and such corporation shall be deemed to be present in person at any such meeting if a person so authorised is present thereat.

8. In the case of holders of Depository Interests representing ordinary shares in the Company, a Form of Direction must be completed in order to instruct Capita IRG Trustees Limited, the Depository, to vote on the holder’s behalf at the meeting or, if the meeting is adjourned, at the adjourned meeting. To be effective, a completed and signed Form of Direction (and any power of attorney or other authority under which it is signed) must be delivered to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom by no later than 72 hours before the time fixed for the meeting or any adjourned meeting.

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