China Energy Development Holdings Limited — Proxy Solicitation & Information Statement 2007

Dec 12, 2007

THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION

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

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

If you have sold or transferred all your shares in China Energy Development Holdings Limited, you should at once hand this circular, together with the accompanying form of proxy, 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.

==> picture [348 x 32] intentionally omitted <==

(incorporated in the Cayman Islands with limited liability) (Stock Code: 228)

CHANGE OF AUDITORS AND AMENDMENTS TO ARTICLES OF ASSOCIATION

A notice convening the extraordinary general meeting of China Energy Development Holdings Limited to be held at Falcon Room I, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Friday, 4 January 2008 at 10:00 a.m. is set out on pages 7 to 8 of this circular. Whether or not you are able to attend the extraordinary general meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit at the Company’s Hong Kong Branch Share Registrar, Tricor Tengis Limited, 26th Floor, Tesbury Centre, 28 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 extraordinary general meeting or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the extraordinary general meeting or any adjourned meeting (as the case may be) should you so wish.

* For identification purpose only

13 December 2007

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Change of Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Amendments to Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Procedure for Demanding a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

— i —

DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

“Articles”	Articles of Association of the Company
“Board”	the board of Directors
“CCIF”	CCIF CPA Limited
“Change of Auditors”	the proposed appointment of Horwath as new auditors
	of the Company following the resignation of CCIF, upon
	the passing of an ordinary resolution by the Shareholders
	at the EGM and to hold office until the conclusion of
	the next annual general meeting of the Company
“Company”	China Energy Development Holdings Limited, a company
	incorporated in the Cayman Islands with limited liability
	and the Shares of which are listed on the main board of
	the Stock Exchange
“Directors”	the directors of the Company
“EGM”	the extraordinary general meeting of the Company to be
	held at Falcon Room I, Luk Kwok Hotel, 72 Gloucester
	Road, Wanchai, Hong Kong on Friday, 4 January 2008
	at 10:00 a.m. or any adjournment thereof to consider
	and, if appropriate, to approve the resolutions as set out
	in the Notice
“Group”	the Company and its subsidiaries at the Latest Practicable
	Date
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC
“Horwath”	Shu Lun Pan Horwath Hong Kong CPA Limited
“Latest Practicable Date”	11 December 2007, being the latest practicable date prior
	to the printing of this circular for ascertaining certain
	information in this circular

— 1 —

DEFINITIONS

“Notice”	the notice of convening the EGM which is set out on
	pages 7 to 8 of this circular
“PRC”	the People’s Republic of China
“Share(s)”	ordinary share(s) of par value of HK$0.05 in the share
	capital of the Company
“Shareholder(s)”	holder of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

— 2 —

LETTER FROM THE BOARD

==> picture [348 x 32] intentionally omitted <==

(incorporated in the Cayman Islands with limited liability) (Stock Code: 228)

Executive Directors: Mr. Tong Seak Kan Mr. Chan Shi Yung Mr. Chui Kwong Kau Mr. Chan Wai Keung Mr. Chang Kuo Tien Mr. Wang Xiang Jun

Registered Office: Cricket Square Hutchins Drive P. O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent Non-executive Directors:

Mr. Chang Kin Man Mr. Ip Wing Lun Mr. Zhong Yuan

Head office and principal place

of business in Hong Kong: Unit 3607, 36/F.,

West Tower, Shun Tak Centre 168-200 Connaught Road Central Hong Kong

13 December 2007

To the Shareholders

Dear Sir or Madam,

CHANGE OF AUDITORS AND AMENDMENTS TO ARTICLES OF ASSOCIATION

INTRODUCTION

The purpose of this circular is to provide you with information reasonably necessary to enable you to make a decision on whether to vote for or against the resolutions proposed at the EGM.

A notice convening the EGM setting out the details of the resolutions to be proposed at the EGM is set out on pages 7 to 8 of this circular.

* For identification purpose only

— 3 —

LETTER FROM THE BOARD

CHANGE OF AUDITORS

On 29 November 2007, the Board announced that CCIF resigned as auditors of the Company and its subsidiaries with effect from 28 November 2007 as the Board and CCIF could not reach a consensus on the audit fees for the year ended 31 December 2007.

In the resignation letter dated 28 November 2007 issued by CCIF to the Board and the Audit Committee of the Company, CCIF confirmed that there are no circumstances in respect of their resignation that they considered should be brought to the attention of the shareholders and creditors of the Company. Both the Board and the Audit Committee of the Company confirm that there are no circumstances in respect of the Change of Auditors which they considered should be brought to the attention of the Shareholders.

In accordance with Article 156 of the Articles, if the office of auditor becomes vacant by the resignation of the auditor, the Directors shall as soon as practicable convene an extraordinary general meeting to fill the vacancy. The Board therefore proposes to appoint Horwath as auditors of the Company to fill the causal vacancy following the resignation of CCIF and to hold office until the conclusion of the next annual general meeting of the Company, subject to the approval of the Shareholders at the EGM to be convened pursuant to the Articles.

AMENDMENT TO ARTICLES OF ASSOCIATION

To facilitate the management of the Company, a special resolution will be proposed at the EGM to amend the Articles in order to remove the requirement of convening an extraordinary general meeting to appoint a new auditor to fill the causal vacancy.

The proposed amendment to the Articles is subject to the approval of the Shareholders by way of a special resolution to be proposed at the EGM. Apart from the proposed amendments, all existing provisions in the Articles shall remain the same. A full text of the proposed amendments to the Articles is set out as a special resolution in the Notice on pages 7 to 8 of this circular.

EXTRAORDINARY GENERAL MEETING

The voting of the ordinary resolution to appoint Horwath as auditors of the Company to fill the causal vacancy following the resignation of CCIF as set out under ordinary resolution in the Notice and the special resolution to approve amendment to the Articles as set out under special resolution in the Notice will be taken by show of hands unless a poll is demanded at the EGM in accordance with the Articles.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit at the Company’s Hong Kong Branch Share Registrar, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong,

— 4 —

LETTER FROM THE BOARD

as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjourned meeting (as the case may be) should you so wish.

PROCEDURE FOR DEMANDING A POLL

According to article 66 of the Articles of Association, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) duly demanded:

• (a) by the chairman of the of such meeting; or

• (b) by at least three members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or

• (c) by a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and representing not less than onetenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) by a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

To the best of the knowledge and belief of the Board having made due and careful enquiries, none of the Shareholders is required to abstain from voting at the EGM under the Listing Rules.

RESPONSIBILITY STATEMENT

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

— 5 —

LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that Change of Auditors and amendments to the Articles are in the best interests of the Company and the Shareholders. The Directors therefore recommend the Shareholders to vote in favour of the relevant resolutions as set out in the Notice on pages 7 to 8 of this circular.

By Order of the Board China Energy Development Holdings Limited Tong Seak Kan Chairman

— 6 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [348 x 32] intentionally omitted <==

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 228)

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “Extraordinary General Meeting”) of the shareholders of China Energy Development Holdings Limited (the Company”) will be held at Falcon Room I, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Friday, 4 January 2008 at 10:00 a.m. to consider and, if thought fit, pass with or without amendments the following resolutions:

ORDINARY RESOLUTION

“ THAT Shu Lun Pan Horwath Hong Kong CPA Limited be and is hereby appointed as auditors of the Company to fill the vacancy following the resignation of CCIF CPA Limited, and to hold office until the conclusion of the next annual general meeting of the Company and that the board of directors of the Company be authorized to fix their remuneration.”

SPECIAL RESOLUTION

“ THAT the articles of association of the Company (the “Articles”) be and are hereby amended in the following manner:

• (A) Article 153(1)

By adding the words “Subject to Article 156” at the beginning of the first sentence of Article 153(1), deleting the words “or at a subsequent extraordinary general meeting in each year” appearing in the first sentence of Article 153(1) and adding the following sentence at the end of Article 153(1):

“all Auditors appointed to fill causal vacancy shall be appointed by the Board pursuant to Article 156.”

• (B) Article 155

By adding the following sentence at the end of the existing Article 155:

“provided that the remuneration of the Auditor appointed pursuant to Article 156 shall be determined by the Board and in such manner as the Board may determine.”

• For identification purpose only

— 7 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

• (C) Article 156

By deleting the words “the Directors shall as soon as practicable convene an extraordinary general meeting to fill the vacancy” appearing in the last sentence of Article 156 and substituting the words “the Board shall appoint a new auditor to fill the vacancy and to hold office until the conclusion of the next annual general meeting of the Company and fix the remuneration of the auditor so appointed” therefor.”

By order of the Board China Energy Development Holdings Limited Chui Kwong Kau Executive Director

Hong Kong, 13 December 2007

Registered Office: Principal place of business in Hong Kong: Cricket Square Unit 3607, 36/F., Hutchins Drive West Tower, Shun Tak Centre P. O. Box 2681 168-200 Connaught Road Central Grand Cayman KY1-1111 Hong Kong Cayman Islands

Notes:

1. A member of the Company entitled to attend and vote at the Extraordinary General Meeting convened by the above notice is entitled to appoint one or more proxies to attend and, on a poll, vote instead of such member. A proxy need not be a member of the Company.

2. In the case of joint holders of shares in the Company, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holders, seniority being determined by the order in which names stand in the register of members.

3. In order to be valid, the form of proxy together with a power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be deposited at the Company’s Hong Kong Branch Share Registrar, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the Extraordinary General Meeting (or any adjournment thereof).

4. As at the date of this notice, the Board comprises Mr. Tong Seak Kan, Mr. Chan Shi Yung, Mr. Chui Kwong Kau, Mr. Chan Wai Keung, Mr. Chang Kuo Tien and Mr. Wang Xiang Jun as executive Directors and Mr. Chang Kin Man, Mr. Ip Wing Lun and Mr. Zhong Yuan as independent non-executive Directors.

— 8 —