Chuang's China Investments Limited — Proxy Solicitation & Information Statement 2021

Jul 26, 2021

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all your shares in Chuang’s China Investments Limited, you should at once hand this circular and the accompanying 2021 Annual Report and form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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

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PROPOSALS INVOLVING (I) RE-ELECTION OF RETIRING DIRECTORS AND

(II) GRANT OF GENERAL MANDATE TO REPURCHASE SHARES

PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

To safeguard the health and safety of attending shareholders and proxies and to reduce the risk of Covid-19 spreading, the following precautionary measures will be taken at the meeting of the Company:

• (i) compulsory body temperature check;

• (ii) mandatory wearing of surgical face mask (please bring your own);

• (iii) no refreshments will be served;

• (iv) no entry will be allowed to any person who is subject to mandatory quarantine order imposed by the HKSAR Government and any person who does not comply with the precautionary measures may be denied entry into the meeting venue; and

• (v) in order to ensure appropriate social distancing, attendees will be assigned seats in partitioned areas at the meeting venue, if appropriate.

Shareholders are strongly encouraged to appoint the Chairman of the meeting of the Company as their proxy to vote according to their indicated voting instructions as an alternative to attending the meeting of the Company in person.

Subject to the development of Covid-19, the Company may implement further changes and precautionary measures and may issue further announcement(s) on such measures as appropriate.

27 July 2021

I

Directors:

Mr. Albert Chuang Ka Pun J.P. (Chairman) Miss Ann Li Mee Sum (Deputy Chairman) Mr. Edwin Chuang Ka Fung (Managing Director) Mr. Sunny Pang Chun Kit Mr. Geoffrey Chuang Ka Kam Mr. Neville Charles Kotewall Mr. Dominic Lai[@]

Mr. Abraham Shek Lai Him G.B.S., J.P.[#] * Mr. Andrew Fan Chun Wah J.P. Dr. Eddy Li Sau Hung G.B.S., J.P. Dr. Ng Kit Chong M.H.*

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

Principal Office in Hong Kong: 25th Floor Alexandra House 18 Chater Road Central Hong Kong

@ Non-executive director

Honorary Chairman

• Independent non-executive directors

27 July 2021

To the shareholders,

Dear Sir or Madam,

PROPOSALS INVOLVING (I) RE-ELECTION OF RETIRING DIRECTORS AND (II) GRANT OF GENERAL MANDATE TO REPURCHASE SHARES

1. INTRODUCTION

It is proposed that at the annual general meeting (the ‘‘Annual General Meeting’’) of Chuang’s China Investments Limited (the ‘‘Company’’, together with its subsidiaries, the ‘‘Group’’) to be held at Concentric, Shop 202, 2/F., Chater House, 8 Connaught Road, Central, Hong Kong on Friday, 10 September 2021 at 10:00 a.m., resolutions will be proposed (i) to re-elect the retiring directors as directors of the Company (the ‘‘Director(s)’’) and (ii) to grant to the board of Directors (the ‘‘Board’’) of the Company a general mandate to repurchase shares of HK$0.05 each (the ‘‘Shares’’) of the Company. This circular gives the information reasonably necessary to enable shareholders of the Company (the ‘‘Shareholder(s)’’) to make an informed decision on whether to vote for or against the above resolutions. The Board has confirmed that having made all reasonable enquiries, no Shareholder is required to abstain

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from voting on any of the proposed resolutions under Rule 2.17 of the Rules Governing the Listing of Securities (the ‘‘Listing Rules’’) on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’).

2. PROPOSED RE-ELECTION OF DIRECTORS

In accordance with Bye-law nos. 86(2) and 86(3) of the Bye-laws of the Company (the ‘‘Bye-laws’’) and Appendix 14 of the Listing Rules, three Directors, Mr. Albert Chuang Ka Pun, Miss Ann Li Mee Sum and Mr. Geoffrey Chuang Ka Kam (collectively, the ‘‘Retiring Directors’’) will retire at the Annual General Meeting and, being eligible, will offer themselves for re-election at the Annual General Meeting.

The Board has assessed the suitability of the Retiring Directors with reference to the selection criteria including, inter alia, diversity in all aspects (including but not limited to gender, age, cultural and educational background, professional experience and skills) as set out in the nomination policy of the Company and the benefits of having a diverse Board as set out in the board diversity policy of the Company through the nomination committee of the Company (the ‘‘Nomination Committee’’). The Board has endorsed the recommendation from the Nomination Committee and recommended the Retiring Directors to stand for re-election at the Annual General Meeting.

Set out below are the biographical details of the three Retiring Directors proposed to be re-elected:

Mr. Albert Chuang Ka Pun (‘‘Mr. Albert Chuang’’) (aged 41), the Chairman, has over 17 years of experience in property business and general management. He is also the chairman of the corporate governance committee of the Company and the chairman and managing director of Chuang’s Consortium International Limited (‘‘CCIL’’, the ultimate holding company of the Company) (stock code: 367) which is listed on the Stock Exchange. He holds a Bachelor degree of Arts with major in Economics. He is a committee member (the Hong Kong Special Administrative Region) of the Tianjin Municipal Committee of the Chinese People’s Political Consultative Conference and a standing committee member of the Thirteenth All-China Youth Federation. Mr. Albert Chuang is the son of Mr. Alan Chuang Shaw Swee (‘‘Mr. Alan Chuang’’, the honorary chairman and the controlling shareholder of CCIL); the brother of Mr. Edwin Chuang Ka Fung (‘‘Mr. Edwin Chuang’’), the Managing Director, Mrs. Candy Kotewall Chuang Ka Wai (‘‘Ms. Candy Chuang’’), the spouse of Mr. Neville Charles Kotewall (‘‘Mr. Neville Kotewall’’), an executive Director, and Mr. Geoffrey Chuang Ka Kam (‘‘Mr. Geoffrey Chuang’’), an executive Director; and the brother-in-law of Mr. Neville Charles Kotewall. He joined the Group in September 2008 as an executive Director and acted as a Deputy Chairman since January 2011 until the re-designation as the Managing Director in June 2015. He was then appointed as the Chairman in April 2019. He is also a director of various subsidiaries of the Company being responsible for the overall management of these subsidiaries. He also holds directorships in certain private companies beneficially owned by Mr. Alan Chuang. Save as disclosed herein, he did not hold any other directorship in any other listed company in Hong Kong or overseas over the last three years. Mr. Albert Chuang is entitled to a Director’s fee of HK$40,000 per annum which was determined by the Board with reference to the related payment made by the Company in previous years. The annual remuneration for Mr. Albert Chuang is approximately HK$3,103,000, including the director’s fee, salary, retirement scheme contribution and other benefits, which is paid by CCIL group and is determined by the board of directors of CCIL with reference to his duty and experience as well as the prevailing market conditions. As at 13 July 2021 (the ‘‘Latest Practicable Date’’), he held 1,299,678 shares in CCIL and 1 share in Evergain Holdings Limited, which is 60% beneficially owned by Mr. Alan Chuang (‘‘Evergain’’).

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Miss Ann Li Mee Sum (‘‘Miss Ann Li’’) (aged 60), the Deputy Chairman, has over 35 years of experience in finance, corporate finance and business management. She is also a member of the corporate governance committee of the Company and an executive director of CCIL. She holds a Master degree in Business Administration and is a fellow member of the Chartered Institute of Management Accountants. She joined the Group in November 1999 as the Managing Director and was re-designated as Deputy Chairman in June 2015. She is also a director of certain subsidiaries of the Company being responsible for the overall management of these subsidiaries. Save as disclosed herein, she did not hold any other directorship in any other listed company in Hong Kong or overseas over the last three years. The annual remuneration for Miss Ann Li is approximately HK$3,082,000, including the Director’s fee, salary, retirement scheme contribution and other benefits, which is paid by the Group and is determined by the Board with reference to her duty and experience as well as the prevailing market conditions. She is also entitled to a director’s fee of HK$30,000 per annum payable by CCIL which was determined by the board of directors of CCIL with reference to the related payment made by CCIL in previous years.

In compliance with rule 13.51(2)(l) of the Listing Rules, Miss Ann Li disclosed that before she joined the Group, she had been a director of The New China Hong Kong Capital Limited (‘‘New China’’) which was a private company incorporated in Hong Kong. The nature of business of New China was investment holding. She resigned as a director of New China on 8 September 1998. According to the knowledge of Miss Ann Li, New China commenced the voluntary liquidation on 25 January 1999 but she is not aware of the amount involved or the outcome in relation to the voluntary liquidation of New China.

Mr. Geoffrey Chuang Ka Kam (‘‘Mr. Geoffrey Chuang’’) (aged 33), an executive director, has 12 years of experience in financial and general management. He is also an executive director of CCIL. He holds a Bachelor degree of Arts with major in economics. Mr. Geoffrey Chuang is the son of Mr. Alan Chuang; the brother of Mr. Albert Chuang, Mr. Edwin Chuang and Ms. Candy Chuang; and the brother-in-law of Mr. Neville Kotewall. Mr. Geoffrey Chuang joined the Board in December 2017. He is also a director of various subsidiaries of the Company being responsible for the overall management of these subsidiaries. He also holds directorships in certain private companies beneficially owned by Mr. Alan Chuang. Save as disclosed herein, he did not hold any other directorship in any other listed company in Hong Kong or overseas over the last three years. Mr. Geoffrey Chuang is entitled to a Director’s fee of HK$30,000 per annum which was determined by the Board with reference to the related payment made by the Company in previous years. The annual remuneration for Mr. Geoffrey Chuang is approximately HK$2,638,000, including the director’s fee, salary, retirement scheme contribution and other benefits, which is paid by CCIL group and is determined by the board of directors of CCIL with reference to his duty and experience as well as the prevailing market conditions. As at the Latest Practicable Date, he held 1 share in Evergain.

All the Retiring Directors mentioned above have no specified length or proposed length of service with the Company and are subject to retirement by rotation and re-election at least once every 3 years pursuant to Appendix 14 of the Listing Rules and the Bye-laws.

Except as mentioned above, all the Retiring Directors subject to re-election have no interest in the Shares of the Company and its associated corporations within the meaning of Part XV of the Securities and Futures Ordinance, no relationship with any other Directors, senior management, substantial or controlling Shareholders and no further information to be disclosed pursuant to any of the requirements of Rules 13.51(2)(h) to (v) of the Listing Rules, and there is no other matter that needs to be brought to the attention of the Shareholders.

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3. GENERAL MANDATE TO REPURCHASE SHARES

At the Annual General Meeting, an ordinary resolution will be proposed that the Board be given a general mandate to exercise all powers of the Company to repurchase issued and fully paid Shares of the Company. Under such mandate, the number of Shares that the Company may repurchase shall not exceed 10 per cent. of the share capital of the Company in issue on the date of the passing of the resolution.

An explanatory statement to provide Shareholders with all the information reasonably necessary for them to make an informed decision in relation to this proposed resolution as required by the Listing Rules concerning the regulation of repurchases by companies of their own securities on the Stock Exchange is set out below.

As at the Latest Practicable Date, there were in issue an aggregate of 2,348,835,316 Shares. Exercising in full of the mandate, if so approved, on the basis that no further Shares shall be issued and repurchased prior to the date of the Annual General Meeting, could accordingly result in up to 234,883,531 Shares being repurchased by the Company. The mandate allows the Company to make or agree to make repurchases only during the period ending on 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 of the Company is required to be held by the Bye-laws or any applicable law or (iii) the revocation or variation of authority given under the ordinary resolution of the Shareholders in general meeting of the Company.

Reasons for the repurchases

The Board considers that the mandate will provide the Company with the flexibility to make Shares repurchases when appropriate and beneficial to the Company. Such repurchases may enhance the net asset value per Share and/or earnings per Share. As compared with the financial position of the Company as at 31 March 2021 (being the date of the latest published audited accounts of the Company), the Board considers that there may be adverse impact on the working capital and on the gearing position of the Company in the event that the proposed repurchases were to be carried out in full during the proposed repurchase period. However, the Board does not propose to exercise the repurchase mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or its gearing levels which in the opinion of the Board are from time to time appropriate for the Company.

Funding of the repurchases

The Company is empowered by its Memorandum of Association of the Company (‘‘Memorandum of Association’’) and the Bye-laws to repurchase its Shares and in repurchasing Shares, may only apply funds legally available for such purpose in accordance with its Memorandum of Association and the Bye-laws and the laws of Bermuda. Bermuda law provides that the amount of capital paid in connection with the share repurchases may only be paid out of either the capital paid up on the shares to be repurchased, the funds of the company otherwise available for distribution or the proceeds of a new issue of shares made for the purpose. The amount of premium payable on redemption may only be paid out of the funds of the Company otherwise available for dividend or distribution or out of the share premium or contributed surplus accounts of the Company. In accordance with the Listing Rules, the listing of all Shares which are repurchased by the Company (whether on the Stock Exchange or otherwise) shall be automatically cancelled upon repurchase and the Company would apply for listing of any further issue of Shares in the normal way.

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Assuming that there is no further issue of Shares between the Latest Practicable Date and the date of repurchase, the exercise of the general mandate to repurchase Shares whether in whole or in part will not result in less than 25 per cent. of the issued share capital of the Company being held by the public as required by Rule 8.08 of the Listing Rules.

Directors, their close associates and core connected persons

None of the Directors nor, to the best of the knowledge of the Directors having made all reasonable enquiries, any of their close associates has any present intention, in the event that the proposal is approved by the Shareholders, to sell Shares to the Company or its subsidiaries.

No core connected person (as defined in the Listing Rules) of the Company has notified the Company that he/she has a present intention to sell Shares to the Company or its subsidiaries nor has he/she undertaken not to sell any of the Shares held by him/her to the Company or its subsidiaries in the event that the Company is authorized to make repurchases of Shares.

Undertaking of the Board

The Board has undertaken to the Stock Exchange to exercise the power of the Company to make repurchases pursuant to the proposed resolution in accordance with the Listing Rules, the laws of Bermuda and in accordance with the regulations set out in the Memorandum of Association and the Bye-laws.

Effect of takeovers code

If, as a result of a share repurchase, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of The Codes on Takeovers and Mergers (‘‘Takeovers Code’’) and, if such increase results in a change of control, may in certain circumstances give rise to an obligation to make a mandatory offer for Shares under Rules 26 and 32 of Takeovers Code.

As at the Latest Practicable Date, CCIL, through its subsidiaries, held approximately 60.71 per cent. of the issued share capital of the Company. In the event that the Board were to exercise in full the power to repurchase Shares which is to be granted pursuant to the proposed resolution, the shareholding of CCIL would increase to approximately 67.46 per cent. of the issued share capital of the Company. Such increase would not give rise to an obligation to make a mandatory offer under the Takeovers Code.

Shares repurchase made by the Company

The Company had not made any purchase of its securities (whether on the Stock Exchange or otherwise) during the six months immediately preceding the Latest Practicable Date.

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During each of the twelve months from July 2020 up to and including the Latest Practicable Date, the highest and lowest traded prices for the Shares on the Stock Exchange were as follows:

	Shares
	Traded Price	(HK$)
Month	Highest	Lowest
July 2020	0.390	0.355
August 2020	0.360	0.325
September 2020	0.360	0.325
October 2020	0.395	0.355
November 2020	0.435	0.380
December 2020	0.440	0.380
January 2021	0.425	0.380
February 2021	0.540	0.375
March 2021	0.470	0.425
April 2021	0.450	0.435
May 2021	0.480	0.435
June 2021	0.500	0.450
July 2021 (up to and including the Latest Practicable Date)	0.495	0.475

4. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors having made all reasonable 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 misleading.

5. ACTION TO BE TAKEN

A proxy form for use at the Annual General Meeting is enclosed in the annual report of the Company for the year ended 31 March 2021 despatched together with this circular. Whether or not you intend to attend the Annual General Meeting, you are requested to complete the said proxy form and return it to the Company’s share registrar in Hong Kong, Tricor Progressive Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof.

6. VOTING AT THE ANNUAL GENERAL MEETING

Pursuant to Bye-law no. 65 of the Bye-laws and Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted by a show of hands.

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7. RECOMMENDATION

The Board believes that (i) the re-election of the Retiring Directors and (ii) the grant of general mandate for the Board to repurchase Shares are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the proposed resolutions set out in the notice of the Annual General Meeting.

Yours faithfully, For and on behalf of

Chuang’s China Investments Limited Albert Chuang Ka Pun Chairman

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