CMON Limited — Proxy Solicitation & Information Statement 2000

Jun 9, 2000

瀋陽公用發展股份有限公司

SHENYANG PUBLIC UTILITY HOLDINGS

COMPANY LIMITED

(a joint stock limited company incorporated in the People's Republic of China

with limited liability)

SUPPLEMENTAL RESOLUTIONS FOR APPROVAL AT THE

1999 ANNUAL GENERAL MEETING

The board of directors (the "Board") of Shenyang Public Utility Holdings Company Limited (the "Company") wishes to announce that a resolution has been proposed by Shenyang Public Utility Group Company Limited, the controlling shareholder of the Company, to propose the conversion of the Company to a foreign investment joint stock limited company and to amend the corresponding Company's Articles of Association. Accordingly, the Board would like to propose, at the forthcoming 1999 Annual General Meeting ("AGM"), to:

1. consider and approve, by way of an ordinary resolution, the passing of the following resolution:

"That conditional on the relevant authorities granting approval to the Company's conversion to a foreign investment joint stock limited company, the proposed conversion of the Company be and is hereby authorised to submit the relevant application to the relevant authorities of the People's Republic of China (the "PRC") for approval and record."

1. consider and approve, by way of a special resolution, the passing of the following resolution:

"That conditional on the relevant authorities granting approval to the amendments to the Company's Articles of Association, the following amendments to Articles 1, 6 and 7 be and hereby approved:-

(i) Paragraph 2 of Article 1 of the Company's Articles of Association be amended to read as

"The Company was established by way of promotion with the approval document Guo Jing Mao Qi Gai [1999] No. 589 of State Economic and Trade Commission and was registered with the Municipal Provincial Administration for Industry and Commerce on 2nd July, 1999. The number of the Company's business licence is 2101311101078(1-1). In accordance with the "Interim Regulation concerning Several Issues on the Establishment of Foreign Investment Companies Limited by Shares" and with the approval of the Ministry of Foreign Trade and Economic Co-operation, the Company has become a foreign investment joint stock limited company."

(ii) Article 6 of the Company's Articles of Association be amended to read as

"In accordance with the "Company Law of the People's Republic of China" ("the Company Law"), "State Council's Special Regulations Regarding the issue of Shares Overseas and the Listing of Shares Overseas by Companies Limited by Shares" ("the Special Regulations"), "Mandatory Provisions for the Articles of Association of Companies to be Listed Outside China" ("the Mandatory Provisions") and other relevant laws and administrative regulations, the Company held an extraordinary general meeting on 13th August, 1999 to amend the Company's articles of association which were approved by the inaugural shareholders meeting on 1st July, 1999 ("the Original Articles of Association"). The Original Articles of Association was amended for the second time at a meeting of the shareholders held on 19th June, 2000 in accordance with the relevant stipulations of the "Interim Regulation concerning Several Issues on the Establishment of Foreign Investment Companies Limited by Shares".

(iii) Paragraphs 1 and 2 of Article 7 of the Company's Articles of Association be amended to read as

"The Original Articles of Association of the Company came into force on the date on which registration formalities with the Shenyang Municipal Administration for Industry and Commerce were completed. The first amendment to the Original Articles of Association took effect after approval was granted by the competent examination and approval department authorised by the State Council. The second amendment came into force after approval was granted by the Ministry of Foreign Trade and Economic Co-operation."

and that the Board be and is hereby authorised to submit the proposed amendments to the Company's Articles of Association to the relevant authorities of PRC for approval and record, and make any further amendments (if necessary) to the Company's Articles of Association pursuant to the requirements of the relevant authorities in charge of the approval of the Company's Articles of Association."

Details of other ordinary resolutions to be transacted in the AGM are set out in the Notice of AGM in the announcement of the Company dated 14th April, 2000 and in the 1999 annual report of the Company. Details of the supplemental resolution regarding the proposed appointment of an executive director and a non-executive director are set out in the announcement of the Company dated 5th June, 2000.

By Order of the Board

Wang Se

Company Secretary

Shenyang, the PRC, 8th June, 2000

Notes:

1. The AGM will be held at the Conference Room of the Company's premises at Level 9, Shenyang Golden International Tower, 355 Zhong Shan Road, Shenhe District, Shenyang, the PRC on Monday, 19th June, 2000 at 9:00 a.m.

2. Prior to the listing of the H shares ("Listing") of the Company on 16th December, 1999, the directors of the Company ("Directors") believed that the Company would focus on the business operation within the PRC region and expected that the Company would not significantly benefit from being a foreign investment joint stock limited company. Since the Listing, the Directors have been analysing various business opportunities and regard that the status of a foreign investment joint stock limited company will be beneficial to the Company in the area of foreign exchange management and import of technological development. Upon acquiring the status of a foreign investment joint stock limited company, the Company will be subject to the relevant PRC laws regarding Sino-foreign joint ventures and be entitled to enjoy certain preferential treatment conferred on a Sino-foreign joint venture under the relevant laws and regulations.

"Please also refer to the published version of this announcement in the Hong Kong i-mail"