CHK Oil Limited — Proxy Solicitation & Information Statement 2005

Apr 29, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Merchants DiChain (Asia) Limited, you should at once hand this circular to the purchaser or transferee, or to the bank, stockbroker, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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.

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CHINA MERCHANTS DICHAIN (ASIA) LIMITED

---

(incorporated in Bermuda with limited liability)

(Stock Code: 632)

DISCLOSEABLE TRANSACTION SETTLEMENT OF DEBT OWNED BY CHINA TECHNOLOGY GLOBAL CORPORATION TO THE COMPANY BY THE ISSUE OF SHARES OF CHINA TECHNOLOGY GLOBAL CORPORATION

* For identification purposes only

29 April 2005

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1-2
**Letter from **	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3-7
Appendix	– General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8-12

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DEFINITIONS

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

“Administrative Services”	company secretarial services, legal services, financial
	services and general administrative services;
“Announcement”	the announcement dated 7 April 2005 issued by the
	Company regarding, among other things, the Settlement;
“Board”	the board of the Directors;
“Company”	China Merchants Dichain (Asia) Limited, a company
	incorporated in Bermuda with limited liability and the
	Shares of which are listed on the Stock Exchange;
“Consideration Shares”	13,328,624 new CTG Shares issued and allotted to the
	Company pursuant to the Settlement;
“CTG”	China Technology Global Corporation, a company
	incorporated in the British Virgin Islands, the shares of
	which are listed on OTC Bulletin Board in the United
	States of America;
“CTG Group”	CTG and its subsidiaries;
“CTG Shares”	ordinary shares of nil value in CTG;
“Debt”	a debt in the amount of HK$9,356,693.79 owing by CTG
	to the Company, being CTG’s portion of the costs of the
	Administrative Services shared for the period from April
	2003 to March 2005;
“Dichain Holdings”	Dichain Holdings Limited, the holding company of both
	CTG and the Company;
“Directors”	directors of the Company;
“Group”	the Company and its subsidiaries;
“Hong Kong”	The Hong Kong Special Administrative Region of the
	PRC;

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DEFINITIONS

“Latest Practicable Date”	26 April 2005, being the latest practicable date prior to
	the printing of this circular for the purpose of
	ascertaining certain information for inclusion in this
	circular;
“Listing Rules”	The Rules Governing the Listing of Securities on the
	Stock Exchange;
“OTC Board”	OTC Bulletin Board in the United States of America;
“PRC”	the People’s Republic of China (excluding, for the
	purpose of this circular only, Hong Kong, the Macau
	Special Administrative Region of the PRC and Taiwan);
“Settlement”	the settlement of the Debt by way of CTG issuing to the
	Company the Consideration Shares at a price of US$0.09
	per CTG Share;
“Settlement Agreement”	the settlement agreement dated 30 March 2005 entered
	into between the Company and CTG in respect of the
	Settlement;
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong);
“Share(s)”	ordinary shares of HK$0.10 each in the share capital of
	the Company;
“Shareholder(s)”	holder(s) of the Shares;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“US$”	United States dollars, the lawful currency of United
	States of America;
“%”	per cent.

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LETTER FROM THE BOARD

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CHINA MERCHANTS DICHAIN (ASIA) LIMITED

*

(incorporated in Bermuda with limited liability)

(Stock Code: 632)

Executive Directors: Fan Di (Chairman) Li Xinggui Wu Shiyue Zheng Yingsheng Zhou Li Yang

Non-executive Directors:

Robert Fung Hing Piu Wang Shizhen Barry J. Buttifant Iain F. Bruce Victor Yang*

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Head office and principal place of business in Hong Kong: Units 3207-08, 32/F. West Tower, Shun Tak Centre 168-200 Connaught Road Central Hong Kong

• Independent non-executive Directors

29 April 2005

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION SETTLEMENT OF DEBT OWED BY CHINA TECHNOLOGY GLOBAL CORPORATION TO THE COMPANY BY THE ISSUE OF SHARES OF CHINA TECHNOLOGY GLOBAL CORPORATION

INTRODUCTION

In the Announcement, the Board announced that the Company and CTG entered into the Settlement Agreement dated 30 March 2005 whereby CTG has agreed to settle a debt of HK$9,356,693.79 owing by CTG to the Company by way of CTG issuing to the Company 13,328,624 ordinary new shares in CTG at a price of US$0.09 per CTG Share.

The Settlement constitutes a discloseable and connected transaction for the Company under the Listing Rules. The purpose of this circular is to give you further information in relation to the Settlement and other information as required under the Listing Rules.

* For identification purposes only

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LETTER FROM THE BOARD

SETTLEMENT AGREEMENT

Date

30 March 2005

Parties

The Company and CTG

Terms

Pursuant to the Settlement Agreement, the Company and CTG have agreed to settle a debt of HK$9,356,693.79 owing by CTG to the Company by way of CTG issuing to the Company 13,328,624 CTG Shares at a price of US$0.09 per CTG Share.

The Consideration

The total consideration for the Consideration Shares is a sum of HK$9,356,693.79 to be satisfied on completion by way of set off against the Debt.

The Debt

CTG and the Company have shared company secretarial services, legal services, financial services and general administrative services on a cost basis. The costs of the Administrative Services were identifiable and had been allocated to CTG on a fair and equitable basis. As at the Latest Practicable Date, CTG is indebted to the Company in an amount of HK$9,356,693.79, being CTG’s portion of the costs of the Administrative Services shared for the period from April 2003 to March 2005. For easy administration, the costs of the Administrative Services were settled annually at the end of each financial year of CTG. The costs of the Administrative Services for the financial year ended 31 March 2004 were not settled because of the lack of sufficient cashflow of CTG at the time, CTG and the Company then agreed to settle the costs for the financial year ended 31 March 2004 together with costs for the financial year ended 31 March 2005.

Pursuant to the Settlement Agreement, the Company and CTG have agreed to settle the Debt by way of CTG issuing to the Company the Consideration Shares at a price of US$0.09 per CTG Share. Following the Settlement, there will be no outstanding amount owed by CTG to the Company.

The Consideration Shares

All Consideration Shares will be credited as fully paid and rank pari passu in all respects with the existing issued CTG Shares, and will be free from all options, liens, charges, claims, and encumbrances.

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LETTER FROM THE BOARD

The Consideration Shares represent approximately 5.32% of the issued share capital of CTG before the completion of Settlement and approximately 5.05% of the issued share capital of CTG as enlarged by the Consideration Shares. The issue price of US$0.09 per Share was determined after arm’s length negotiations between the Company and CTG. The issue price of US$0.09 per CTG Share is equal to the closing price of US$0.09 per CTG Share as quoted on the OTC Board on 29 March 2005 and represents a discount of approximately 42% to the average closing price of US$0.15 per CTG Share as quoted on the OTC Board for the last ten trading days up to and including 29 March 2005, being the last trading day prior to the date of the Settlement Agreement.

Conditions

Completion of the Settlement Agreement is conditional upon (i) the board of directors of CTG approving the Settlement Agreement, the issue of the Consideration Shares, the transactions contemplated in or incidental to the Settlement Agreement and the implementation thereof; and (ii) all necessary approval (if required by law or other rules and regulations) being obtained by the Company.

Completion

The Settlement Agreement has been completed on 31 March 2005.

The following table illustrates the Company’s shareholding changes in CTG immediately before and after completion of the Settlement:

The Company DiChain Holdings Public Total	Immediately before completion of the Settlement Number of CTG Shares Shareholding percentage 1,181,938 (Note) 0.47% 148,349,250 59.19% 101,088,524 40.34% 250,619,712 100%	Immediately after completion of the Settlement Number of CTG Shares Shareholding percentage 14,510,562 5.5% 148,349,250 56.20% 101,088,524 38.30% 263,948,336 100%	Immediately after completion of the Settlement Number of CTG Shares Shareholding percentage 14,510,562 5.5% 148,349,250 56.20% 101,088,524 38.30% 263,948,336 100%
			100%

Note: The CTG Shares were acquired by the Company during the period from 1996 to 2003.

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LETTER FROM THE BOARD

Reasons

The Group had been principally engaged in operating bonded warehouse, provision of logistics and related services and logistics-related property investment. CTG Shares are listed on the OTC Board. CTG is a company incorporated in the British Virgin Islands, headquartered in Hong Kong, and has operational offices located in Shenzhen and six other major cities in the PRC. CTG Group had been principally engaged in providing information technology solutions for the logistics and supply chain management industry in mainland China and Hong Kong. One of the CTG’s subsidiaries was recognized as one of the leading internet technology solution providers in logistics and supply chain management in the PRC in 2002 and 2003 by a world leading internet technology consulting firm. The Directors believe that not only the Settlement will allow the Company to recover its debt due from CTG by way of receiving marketable securities in CTG, it will also enable the Company to invest into a leading internet technology solution provider and to benefit from enhancement of its application platform for future development.

The Directors (including the independent non-executive Directors) believe that the terms of the Settlement Agreement are in normal commercial terms, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

FINANCIAL INFORMATION ON CTG

Details of the audited consolidated net assets value as at 31 March 2003 and 31 March 2004 and the audited loss before and after tax of CTG for the 2 financial years ended 31 March 2004 are set out in the table below:

	For the year ended	For the year ended
Items	31 March 2004	31 March 2003
	(US$)	(US$)
	(Audited)	(Audited)
Profit (Loss) before tax	(4,467,000)	(13,035,000)
Profit (Loss) after tax	(4,467,000)	(13,035,000)
	As at	As at
	31 March 2004	31 March 2003
	(US$)	(US$)
	(Audited)	(Audited)
Net assets value	3,828,000	2,547,000

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LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS FOR THE COMPANY

59.19% of the entire issued share capital of CTG is held by Dichain Holdings which is the holding company of the Company holding 3,096,553,083 shares of the Company as at the Latest Practicable Date, representing approximately 56.94% of the existing issued share capital of the Company. CTG is a connected person of the Company. The Settlement constitutes a connected transaction for the Company under the Listing Rules. The Directors believe that the terms of the Settlement Agreement are in normal commercial terms. Each of the percentage ratios pursuant to Rule 14.07 of the Listing Rules is less than 25% and the total consideration is less than HK$10 million. The Settlement is therefore subject to the reporting and announcement requirements pursuant to rule 14A.32(2) of the Listing Rules. The Settlement also constitutes a discloseable transaction of the Company under the Listing Rules.

FINANCIAL EFFECT OF THE DISPOSAL

The Settlement is satisfied on completion by way of set off against the Debt. The completion of the settlement has no financial effects on the overall earnings, total assets and total liabilities of the Group.

GENERAL

The sharing of cost of Administrative Services between the Company and CTG will continue and CTG has agreed with the Company to settle the costs quarterly commencing from the current financial year. The Directors (including the independent non-executive Directors) believe that the arrangement of quarterly settlement of the cost of Administrative Services are in normal commercial terms and are fair and reasonable.

Your attention is also drawn to the further information contained in the Appendix to this circular.

Yours faithfully, For and on behalf of

China Merchants Dichain (Asia) Limited Fan Di

Chairman

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GENERAL INFORMATION

APPENDIX

A. RESPONSIBILITY

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

B. DIRECTORS’ INTERESTS IN SECURITIES

As at the Latest Practicable Date, the interests (including short positions) of the Directors (including their respective spouses, infant children, related trusts and companies controlled by them) in the Shares, convertible securities, warrants, options or derivatives in respect of securities which carry voting rights of the Company and its associated corporations (within the meaning of the SFO), which require notification pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short position in which any such director is taken or deemed to have under such provisions of the SFO) or which were required to be entered in the register kept by the Company pursuant to section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange, pursuant to Model Code for Securities Transactions by Directors of Listing Companies in the Listing Rules, were as follows:

Long positions in Shares:

Name of Director Capacity Fan Di Held by controlled corporation (Note 1) Robert Fung Hing Piu Beneficial owner (Note 2) Held by trust (Note 3) Iain Ferguson Bruce Beneficial owner Barry John Buttifant Beneficial owner	Number of Shares 3,096,553,083 64,305,437 63,604,530 127,909,967 5,000,000 1,000,000	Percentage of issued share capital 56.94% 1.18% 1.17%
		2.35% 0.09% 0.02%

Notes:

1. 63,854,189 Shares are held by Farsight Holdings Limited (“Farsight”) and 3,032,698,894 Shares are held by DiChain Holdings. Dr. Fan Di (“Dr. Fan”) is beneficially interested in 38.57% of the voting shares of Farsight and is deemed to be interested in 40.96% of the voting shares of DiChain Holdings and Dr. Fan therefore is deemed to have an interest in these Shares.

2. 60,000,000 Shares of the 64,305,437 Shares are held by First Horizon Limited, which is 100% owned by Dr. Robert Fung Hing Piu (“Dr. Fung”), therefore, Dr. Fung is deemed to be interested in the 60,000,000 Shares.

3. Dr. Fung is deemed to be interested in 63,604,530 Shares as he is one of the trustees of Sir Kenneth Fung Ping Fan Foundation Trust I, a charitable foundation.

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GENERAL INFORMATION

APPENDIX

Rights to acquire Shares:

Pursuant to the share option scheme of the Company adopted on 21 June 2002, certain Directors were granted share options to subscribe for Shares, details of which as at the Latest Practicable Date were as follows:

				Percentage of the
				existing issued share
				capital (without taking
				into account the
				increase in issued
		Number	Number of	share capital which
		of share	underlying	may result from the
Name of directors	Capacity	options	shares	exercise of the options)
Fan Di	Beneficial owner	67,000,000	67,000,000	1.23%
Li Xinggui	Beneficial owner	23,000,000	23,000,000	0.42%
Wu Shiyue	Beneficial owner	35,000,000	35,000,000	0.64%
Zheng Yingsheng	Beneficial owner	10,500,000	10,500,000	0.19%
Zhou Li Yang	Beneficial owner	15,500,000	15,500,000	0.29%
Wang Shizhen	Beneficial owner	7,000,000	7,000,000	0.13%
Robert Fung Hing Piu	Beneficial owner	3,500,000	3,500,000	0.06%
Iain Ferguson Bruce	Beneficial owner	3,500,000	3,500,000	0.06%
Barry John Buttifant	Beneficial owner	3,500,000	3,500,000	0.06%
Victor Yang	Beneficial owner	2,000,000	2,000,000	0.04%

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in any equity or debt securities of the Company or any associated corporations (within the meaning of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short position in which any such director is taken or deemed to have under such provisions of the SFO) or which were required to be entered in the register kept by the Company pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which were required pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange.

C. SHAREHOLDERS WITH NOTIFIABLE INTERESTS

As at the Latest Practicable Date, so far as is known to the Directors, the following persons (other than the Directors or chief executive of the Company) had interests or short positions in the shares and underlying shares of the Company which are required to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3

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GENERAL INFORMATION

APPENDIX

of Part XV of the SFO or, 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 members of the Group:

				Percentage
Name of				of issued
substantial	Long/short		Number	share
shareholder	position	Capacity	of Shares	capital
Farsight (Note)	Long	Beneficial owner	63,854,189	1.17%
	Long	Interest in corporation	3,032,698,894	55.77%
DiChain Holdings	Long	Beneficial owner	3,032,698,894	55.77%

Note: Farsight is interested in more than one-third of the voting shares of DiChain Holdings and is therefore deemed to be interested in the 3,032,698,894 Shares beneficially owned by DiChain Holdings. Dr. Fan, Messrs. Li Xinggui and Zhou Li Yang are directors in both Farsight and DiChain Holdings. Mr. Wang Shizhen is a director in DiChain Holdings.

Save as disclosed above, so far as known to the Directors, as at the Latest Practicable Date, no person (other than the Directors or chief executive of the Company), had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 and Part XV of the SFO, and/or, who was, 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 the Company or any other member of the Group, or in any options in respect of such share capital.

D. DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

As at the Latest Practicable Date, none of the Directors and his/her associates was interested in any business apart from the Group’s businesses which competes or is likely to compete, either directly or indirectly, with business of the Group.

E. SERVICE CONTRACTS

Dr. Fan entered into a service agreement with the Company on 3 April 2003 for an initial period of one year commencing 1 April 2003, which will continue thereafter until terminated by either party by three months’ prior written notice. Under the service contract of Dr. Fan, he is entitled to receive an annual executive compensation of HK$700,000 and a discretionary year-end bonus of an amount not exceeding 500% of his annual compensation and 25% of the net profits of the Group as reflected in the audited consolidated financial statements of the Group. Mr. Wu Shiyue entered into a service agreement with the Company on 21 June 2002 for an initial period of one year commencing 28 August 2002, which will continue thereafter until terminated by either party by three months’ prior written notice. Mr. Wu Shiyue is entitled to receive an annual executive compensation of HK$420,000, an annual housing allowance of HK$56,000 and a discretionary year-end bonus of an amount not exceeding 300% of his annual compensation and 25% of the net profits of the Group as reflected in the audited consolidated financial statements of the Group pursuant to his service contract.

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GENERAL INFORMATION

APPENDIX

Save as disclosed above, none of the Directors had service contract with any member of the Group which is not expiring or determinable within one year without payment of compensation (other than statutory compensation) as at the Latest Practicable Date.

F. LITIGATION

As at the Latest Practicable Date, the Group was involved in the following material litigation:

• (a) A former director of the Dransfield Holdings Limited (“Dransfield”), the former holding company of the Group prior to 26 August 2002 and currently a whollyowned subsidiary of the Group, has claimed against Dransfield for damage resulted from that Dransfield has disallowed the former director to exercise the share options to subscribe for 20,000,000 Shares granted on 6 September 2001. The Company has sought to achieve compromise settlement. The directors of Dransfield, having taken legal advice, believe that the options granted are not valid ones and no material losses to be arose from such proceedings.

• (b) A former director of the Company prior to October 2001, a company controlled by this director and a trust company with the former director’s family members as the beneficiaries claimed against Dransfield in May 2004 for unpaid remuneration and expenses and working capital in the aggregate amount of HK$6,974,502.44. The summons for application for summary judgment was filed by the plaintiff on 8 December 2004 and the hearing of the summary judgment will be held on 14 June 2005.

• (c) In August 2003, Bank of China (Hong Kong) Limited has claimed against (i) Dransfield Secretarial & Administrative Services Limited; and (ii) Dransfield Finance Limited, wholly owned subsidiaries of the Company, for amount due under a mortgage in the sum of HK$5,707,652.21 and further interest and vacant possession of a property owned by Dransfield Secretarial & Administrative Services Limited. Vacant possession of the property has already been taken in August 2001. The proceeding is pending filing of affirmation in reply by Bank of China (Hong Kong) Limited since November 2003.

Save as disclosed above, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against any member of the Group as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX

G. GENERAL

• (i) The company secretary and the qualified accountant of the Company is Mr. Yu Wai Kit. Mr. Yu is a member of Australian Society of Certified Practising Accountants and a member of Hong Kong Institute of Certified Public Accountant.

• (ii) The English text of this circular shall prevail over their respective Chinese text in case of any inconsistency.

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