CWT International Limited — Proxy Solicitation & Information Statement 2002

Jun 10, 2002

IMPORTANT

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 or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Wah Tak Fung Holdings Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

WAH TAK FUNG HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION

ACQUISITION OF SHARES IN SKY CITI-LINK ATNT (HOLDINGS) LIMITED

AND

GENERAL MANDATE TO ISSUE SHARES

A notice convening a special general meeting of the Company to be held at 10:00 a.m. on 27 June 2002 at Kennedy Room, Level 7, Conrad Hong Kong, Pacific Place, 88 Queensway, Hong Kong is set out on pages 20 to 22 of this circular. A form of proxy is also enclosed. Whether or not you are able to attend and vote at the special general meeting, you are requested to complete the enclosed proxy form and return it to the Company at its principal place of business in Hong Kong at 28th to 30th Floors, Workington Tower, 78 Bonham Strand, Sheung Wan, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the special general meeting. Completion and return of the proxy form will not preclude you from subsequently attending and voting at the special general meeting or any adjourned meetings should you so wish.

10 June 2002

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Chairman
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
WTF Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Shareholdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Information on Sky Citi-Link . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Information on the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Reasons for the Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Financial effects of the Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Implications under Listing Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
General mandate to issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix – General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20

DEFINITIONS

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

“ATNT”	Asia Tele-Net and Technology Corporation Limited, a
	company incorporated in Bermuda, the shares of which are
	listed on the Stock Exchange
“ATNT Agreement”	the agreement dated 1 May 2002 entered into among ATNT,
	Happy Win, eCyber and Teleinvest in relation to the
	acquisition by Teleinvest from Happy Win of the Sale Shares
	and the Sale Loan
“Acquisition”	the acquisition by the Group of the Sale Shares and the
	Sale Loan under the WTF Agreement
“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Board”	board of Directors
“Company”	Wah Tak Fung Holdings Limited, a company incorporated
	in Bermuda with limited liability, the ordinary share capital
	of which is listed on the Stock Exchange
“Completion”	completion of the ATNT Agreement and the WTF Agreement
“Completion Accounts”	the audited consolidated balance sheet of Sky Citi-Link as
	at Completion and the audited consolidated profit and loss
	account of Sky Citi-Link for the period from 1 April 2002
	to Completion to be prepared by Sky Citi-Link and audited
	by auditors to be appointed by the Company following
	Completion
“Consideration”	an amount of HK$59 million payable by the Company for
	the Acquisition
“Consideration Shares”	a total of 107,272,727 new Shares to be issued by the
	Company to satisfy the Consideration
“Directors”	the directors of the Company
“eCyber”	eCyberChina Holdings Limited, a company incorporated in
	Hong Kong, the shares of which are listed on the Stock
	Exchange
“FTNS Licence”	the fixed telecommunication network services licence no.
	018 issued by OFTA to SCLIT on 1 April 2000 pursuant to
	the Telecommunication Ordinance (Chapter 106 of the Laws
	of Hong Kong)
“Group”	the Company and its subsidiaries

– 1 –

DEFINITIONS

“Happy Win”	Happy Win Resources Limited, a company incorporated in
	the British Virgin Islands and a wholly owned subsidiary of
	ATNT
“Hong Kong”	the Hong Kong Special Administration Region of the
	People’s Republic of China
“Latest Practicable Date”	7 June 2002, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained in this circular
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange
“Loan”	shareholders’ loans totalling about HK$78,395,000 as at 1
	May 2002 due from Sky Citi-Link to Happy Win and
	Teleinvest which are unsecured, interest free and repayable
	on demand
“Milestone”	the full satisfaction by the licensee of the conditions set
	out in the schedule to the FTNS Licence relating to the
	licensee (a) having a capacity of not less than 120Mbps for
	external telecommunications circuits; and (b) having a
	cumulative capital expenditure of not less than HK$41
	million within 30 months from the date of issue of the
	FTNS License
“Mr Chu”	Mr Chu David Yu Lin, a Director and, together with his
	associates, a substantial shareholder of the Company
“OFTA”	the Office of the Telecommunications Authority in Hong
	Kong
“Options”	options to subscribe for Shares granted under the share
	option scheme of the Company adopted on 11 September
	1996
“Placing Agreements”	two agreements dated 23 and 24 April 2002 entered into by
	the Company with Benevolent Developments Limited and
	Well Growth Group Limited respectively in relation to the
	placing of the Placing Shares
“Placing Shares”	an aggregate of 487,500,000 new Shares to be placed by
	the Company at a price of HK$0.40 each pursuant to the
	Placing Agreements as announced by the Company on 3
	May 2002
“Preference Shares”	unlisted convertible redeemable non-voting preference
	shares of the Company with a nominal value of HK$1
	million each

– 2 –

DEFINITIONS

“SCLIT”	Sky Citi-Link International Telecom Limited, a company
	incorporated in Hong Kong and a wholly owned subsidiary
	of Sky Citi-Link
“SDI Ordinance”	the Securities (Disclosure of Interests) Ordinance (Chapter
	396 of the Laws of Hong Kong)
“SGM”	the special general meeting of the Company to be held at
	10:00 a.m. on 27 June 2002 at Kennedy Room, Level 7,
	Conrad Hong Kong, Pacific Place, 88 Queensway, Hong
	Kong, a notice of which is set out on pages 20 to 22 of this
	circular, and any adjournment thereof
“Sale Loan”	80% of all amounts outstanding at Completion as comprised
	in the Loan, which 80% is currently due from Sky Citi-
	Link to Happy Win and which will be due from Sky Citi-
	Link to Teleinvest immediately on completion of the ATNT
	Agreement
“Sale Shares”	80 shares of US$1.00 each in the capital of Sky Citi-Link,
	representing 80% of its existing issued share capital, which
	is currently held by Happy Win and which will be held by
	Teleinvest immediately on completion of the ATNT
	Agreement
“Share(s)”	ordinary share(s) of HK$0.10 each in the capital of the
	Company
“Shareholders”	holders of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Sky Citi-Link”	Sky Citi-Link ATNT (Holdings) Limited, a company
	incorporated in the British Virgin Islands and held as to
	20% by Teleinvest and 80% by Happy Win as at the Latest
	Practicable Date
“Teleinvest”	Teleinvest Holdings Limited, a company incorporated in
	the British Virgin Islands and a wholly owned subsidiary of
	eCyber
“WTF Agreement”	the agreement dated 1 May 2002 entered into among eCyber,
	Teleinvest and the Company in relation to the Acquisition
“HK$”	Hong Kong dollars
“US$”	United States dollars
“%”	per cent.

If the context so requires, amounts in US$ have been translated, for illustration purpose only, into HK$ at an exchange rate of US$1 to HK$7.8.

– 3 –

LETTER FROM THE CHAIRMAN

WAH TAK FUNG HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

Executive directors: CHU David Yu Lin (Chairman) CHAN Fook Lai (Honorary Chairman) LU Xin (Vice-Chairman and Managing Director) SONG Yu Qing (Vice-Chairman) BAO Guanghe (Managing Director) CHAN King Hung CHU Ho Miu Hing

Independent non-executive directors: KO Ming Tung, Edward TANG Tin Sek CHUNG Chi Chiu

Registered office: Clarendon House 2 Church Street Hamilton HM Bermuda

Principal place of business: 28th to 30th Floors Workington Tower 78 Bonham Strand Sheung Wan Hong Kong

10 June 2002

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

ACQUISITION OF SHARES IN SKY CITI-LINK ATNT (HOLDINGS) LIMITED

AND

GENERAL MANDATE TO ISSUE SHARES

INTRODUCTION

On 6 May 2002, the Company, eCyber and ATNT jointly announced that:

1. ATNT, Happy Win, eCyber and Teleinvest entered into the ATNT Agreement on 1 May 2002 pursuant to which Teleinvest will acquire from Happy Win the Sale Shares, representing 80% of the issued share capital of Sky Citi-Link, and the Sale Loan, representing 80% of all amounts outstanding at Completion as comprised in the Loan, for a total consideration of HK$55 million which will be satisfied by eCyber (a) as to HK$37.8 million, issuing 151,200,000 new shares of HK$0.20 each in eCyber at a price of HK$0.25 each; and (b) as to the remaining HK$17.2 million, procuring the Company to issue 31,272,727 Consideration Shares at a price of HK$0.55 each, to ATNT or as it may direct; and

– 4 –

LETTER FROM THE CHAIRMAN

1. the Company, eCyber and Teleinvest entered into the WTF Agreement on 1 May 2002 pursuant to which the Company will acquire from Teleinvest the Sale Shares, representing 80% of the issued share capital of Sky Citi-Link, and the Sale Loan, representing 80% of all amounts outstanding at Completion as comprised in the Loan, for a total consideration of HK$59 million which will be satisfied by the Company issuing a total of 107,272,727 Consideration Shares at a price of HK$0.55 each, 76,000,000 of which to eCyber or as it may direct and 31,272,727 of which to ATNT or as it may direct.

The Acquisition constitutes a discloseable transaction for the Company under the Listing Rules. The purpose of this circular is to provide Shareholders with further details of the Acquisition and to convene the SGM to, among others, consider and, if thought fit by the Shareholders, to approve the issue of the Consideration Shares.

WTF AGREEMENT

The WTF Agreement was entered into on 1 May 2002 between the Company as purchaser, Teleinvest as vendor and eCyber as guarantor for the obligations of Teleinvest under the WTF Agreement. eCyber and Teleinvest are independent third parties not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates.

Assets to be acquired

Pursuant to the WTF Agreement, the Company will acquire from Teleinvest the Sale Shares, representing 80% of the issued share capital of Sky Citi-Link, and the Sale Loan, representing 80% of all amounts outstanding at Completion as comprised in the Loan.

The Sale Shares and Sale Loan will be acquired free from all claims, charges, lien, encumbrances and equities and the Sale Shares will be fully paid or credited as fully paid and rank equally in all respects with the existing issued shares of Sky Citi-Link.

The acquisition of the Sale Loan by the Group on Completion will constitute a connected transaction of the Company under Rule 14.25(2)(a) of the Listing Rules. Further details in this regard are set out in the section headed “Implications under Listing Rules” in the letter from the Chairman in this circular.

Consideration

Amount and basis for determination

The Consideration is HK$59 million which was determined based on arms’ length commercial negotiations between the parties with reference to the adjusted unaudited consolidated net assets of Sky Citi-Link as at 31 March 2002 of about HK$64,842,000 which was arrived at by excluding its consolidated current assets, consolidated current liabilities and the Loan from its audited consolidated net asset value as at 31 March 2002. The Consideration represents a premium of about 13.7% to HK$51,873,600, being 80% of such adjusted net assets of Sky Citi-Link.

– 5 –

LETTER FROM THE CHAIRMAN

Having considered the potential of the Group’s investment in Sky Citi-Link following the Acquisition, its intention to diversify its investment into the technology field and the potential to create a strategic partnership with eCyber as a shareholder of Sky Citi-Link, the Directors believe that it is the interests of the Company to enter into the WTF Agreement and that the terms of the WTF Agreement are fair and reasonable (including the amount of the Consideration which is HK$4 million more than the consideration to be paid by Teleinvest to Happy Win for the Sale Shares and the Sale Loan under the ATNT Agreement).

Method of satisfaction

The Consideration will be satisfied on completion of the WTF Agreement by the issue of 107,272,727 Consideration Shares at a price of HK$0.55 each, 76,000,000 of which to eCyber or as it may direct and 31,272,727 of which to ATNT or as it may direct.

Issue price per Consideration Share

The issue price of HK$0.55 per Consideration Share represents a premium of about 29.41% to the closing price per Share of HK$0.425 on 20 March 2002, being the trading day prior to the suspension of trading in the Shares on 21 March 2002, a premium of about 8.91% to the average closing price per Share of HK$0.505 from 7 March 2002 to 20 March 2002, being the 10 trading days prior to the suspension of trading in the Shares on 21 March 2002, and a premium of about 139.13% to the closing price per Share of HK$0.23 at the Latest Practicable Date.

Consideration Shares

The 76,000,000 Consideration Shares to be issued to eCyber or as it may direct represent about 2.37% of the existing issued share capital of the Company of 3,201,020,651 Shares as at the Latest Practicable Date, about 2.3% of the issued share capital of the Company as enlarged by the issue of Consideration Shares but before the issue of the Placing Shares and about 2% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares and the Placing Shares.

The 31,272,727 Consideration Shares to be issued to ATNT or as it may direct represent about 0.98% of the existing issued share capital of the Company of 3,201,020,651 Shares as at the Latest Practicable Date, about 0.95% of the issued share capital of the Company as enlarged by the issue of Consideration Shares but before the issue of the Placing Shares and about 0.82% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares and the Placing Shares.

The 107,272,727 Consideration Shares represent about 3.35% of the existing issued share capital of the Company of 3,201,020,651 Shares as at the Latest Practicable Date, about 3.24% of the issued share capital of the Company as enlarged by the issue of Consideration Shares but before the issue of the Placing Shares and about 2.83% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares and the Placing Shares.

The Consideration Shares will be issued pursuant to a specific mandate to be sought from the Shareholders at a special general meeting to be convened. Completion of the WTF Agreement is conditional on, amongst others, such Shareholders’ approval having been obtained. Application will be made to the Stock Exchange for the listing of and permission to deal in the Consideration Shares.

– 6 –

LETTER FROM THE CHAIRMAN

Lock Up

Under the WTF Agreement, eCyber agreed to undertake to the Company on Completion that it will not, and will procure that the registered holders, nominees or trustees holding the Consideration Shares to be issued to it will not, sell, transfer or otherwise dispose of any direct or indirect interest in:

• (a) 68,400,000 Consideration Shares, representing 90% of the 76,000,000 Consideration Shares to be issued to eCyber (or as it may direct), for the first three months period from Completion; and

• (b) 38,000,000 Consideration Shares, representing 50% of the 76,000,000 Consideration Shares to be issued to eCyber (or as it may direct), for the second three months period from Completion.

Under the WTF Agreement, eCyber has also agreed to procure that ATNT undertakes to the Company on Completion that it will not, and will procure that the registered holders, nominees or trustees holding the Consideration Shares to be issued to it will not, sell, transfer or otherwise dispose of any direct or indirect interest in:

• (a) 28,145,454 Consideration Shares, representing about 90% of the 31,272,727 Consideration Shares to be issued to ATNT (or as it may direct), for the first three months period from Completion; and

• (b) 15,636,363 Consideration Shares, representing about 50% of the 31,272,727 Consideration Shares to be issued to ATNT (or as it may direct), for the second three months period from Completion.

eCyber agreed with the Company to:

• (a) deposit the share certificates for the 38,000,000 Consideration Shares (representing 50% of the Consideration Shares to be issued to eCyber or as it may direct);

• (b) to procure that ATNT deposits the share certificates for the 15,636,364 Consideration Shares (representing 50% of the Consideration Shares to be issued to ATNT or as it may direct)

on Completion with an escrow agent for a period of six months from Completion.

The Directors are of the view that the arrangement on the lock up of the Consideration Shares as described above would ensure that eCyber and ATNT hold at least 50% of their respective portions of the Consideration Shares as investments for not less than six months following Completion. This arrangement would in turn allow the Company, eCyber and ATNT to explore, for at least a six months period following Completion, potential means by which a strategic cooperation among them could be established to further enhance and consolidate their respective efforts on business development in the telecommunications field.

– 7 –

LETTER FROM THE CHAIRMAN

Other Terms

• (a) If the value of the consolidated current assets of Sky Citi-Link as at completion of the WTF Agreement is less than its consolidated current liabilities (both to be certified after Completion by auditors to be appointed by the Company), eCyber will pay or procure the payment of the shortfall in cash to Sky Citi-Link within 10 business days from the date the Completion Accounts are issued.

• (b) If the value of the consolidated current assets of Sky Citi-Link as at completion of the WTF Agreement exceeds its consolidated current liabilities (both to be certified after Completion by auditors to be appointed by the Company), the Company will procure Sky Citi-Link to pay the excess in cash to eCyber within 10 business days from the date the Completion Accounts are issued.

Conditions

Completion of the WTF Agreement is conditional upon:

• (i) the Stock Exchange granting listing of and permission to deal in the Consideration Shares;

• (ii) all consents or approvals of any relevant governmental authorities (including OFTA) or other relevant third parties in Hong Kong or elsewhere which are required or appropriate for the entry into and the implementation of the WTF Agreement having been obtained, including all filings with any relevant governmental authorities or other relevant third parties in Hong Kong or elsewhere which are required or appropriate for the entering into and the implementation of the WTF Agreement having been made;

• (iii) the ATNT Agreement becoming unconditional in accordance with its terms;

• (iv) the results of a due diligence exercise on Sky Citi-Link and its subsidiaries being satisfactory to the Company and written notice to that effect having been given to Teleinvest;

• (v) achievement of the Milestone by the licensee of the FTNS Licence; and

• (vi) approval by Shareholders in a general meeting of the issue of the Consideration Shares in accordance with the Listing Rules.

If these conditions have not been satisfied on or before 31 July 2002 (or such later date as the parties may agree), eCyber and Teleinvest (acting jointly) or the Company may terminate the WTF Agreement and all rights and obligations of the parties will cease to have effect immediately upon such termination except that termination will not affect the then accrued rights and obligations of the parties.

Completion

Completion of the WTF Agreement will take place immediately after completion of the ATNT Agreement (or such later date as the parties may agree). It is agreed between the parties that they are not obliged to proceed to completion of the WTF Agreement unless the ATNT Agreement has been completed in accordance with its terms.

– 8 –

LETTER FROM THE CHAIRMAN

SHAREHOLDINGS

As at the Latest Practicable Date, Mr Chu was, together with his associates and parties acting in concert with him, a controlling shareholder of the Company interested in 1,031,500,000 Shares, representing about 32.22% of the issued share capital of the Company.

On 3 May 2002, the Company announced that it had entered into the Placing Agreements with Benevolent Developments Limited and Well Growth Group Limited on 23 and 24 April 2002 respectively under which they have agreed to subscribe for or procure independent investors to subscribe for a total of 292,500,000 and 195,000,000 Placing Shares respectively. Further particulars concerning the Placing Agreements are set out in the announcement of the Company dated 3 May 2002.

The following table is prepared based on the shareholding structure of the Company as at the Latest Practicable Date and illustrates the changes in its shareholding structures before and after the issue of the Placing Shares and the Consideration Shares.

Mr Chu, his associates and parties acting in concert with him Public Total	As at the Approximate Latest percentage of Practicable issued share Date capital 1,031,500,000 32.22% 2,169,520,651 67.78% 3,201,020,651 100.00%	Immediately after issue of the Placing Shares but before issue Approximate of the percentage of Consideration issued share Shares capital 1,031,500,000 27.97% 2,657,020,651 72.03% 3,688,520,651 100.00%	Immediately after issue of the Placing Approximate Shares and the percentage Consideration of issued Shares share capital 1,031,500,000 27.17% 2,764,293,378* 72.83% 3,795,793,378 100.00%	Immediately after issue of the Placing Approximate Shares and the percentage Consideration of issued Shares share capital 1,031,500,000 27.17% 2,764,293,378* 72.83% 3,795,793,378 100.00%
				100.00%

• Immediately after Completion, eCyber will hold 76,000,000 Shares, representing about 2% of the issued share capital of the Company as enlarged by the issue of the Placing Shares and the Consideration Shares, and ATNT will hold 31,272,727 Shares, representing about 0.82% of the issued share capital of the Company as enlarged by the issue of the Placing Shares and the Consideration Shares.

INFORMATION ON SKY CITI-LINK

Sky Citi-Link was incorporated on 25 February 2000. Its subsidiary, SCLIT is a traditional telecom carrier and one of the largest teleport operators in Asia. OFTA has issued an External Fixed Telecommunication Network Services Licence to SCLIT to operate international telecommunication services with effect from 1 April 2000. In addition, through its subsidiary, Sky Citi-Link has acquired a 127,000 sq ft site at Tai Po Industrial Estate to develop an antenna farm and a teleport building which enable the customers of Sky Citi-Link to link up redundancy fibre loop and ATM backbone to local major fixed networks which cover most of the areas in Hong Kong.

– 9 –

LETTER FROM THE CHAIRMAN

Based on the audited consolidated accounts of Sky Citi-Link, a loss before and after taxation of HK$11,851,487 was incurred for the period from 1 April 2000 to 31 March 2001 and the audited consolidated net liabilities of Sky Citi-Link as at 31 March 2001 were HK$12,832,728.

Based on the unaudited consolidated balance sheet of Sky Citi-Link as at 31 March 2002 and the unaudited consolidated profit and loss account of Sky Citi-Link for the financial year ended 31 March 2002, a loss before and after taxation of HK$8,110,430 was incurred for the period from 1 April 2001 to 31 March 2002 and the unaudited consolidated net liabilities of Sky Citi-Link as at 31 March 2002 were HK$13,650,361.

INFORMATION ON THE GROUP

The principal activities of the Group are property investment and development, property leasing and the provision of building management and agency services.

As set out in the audited financial statements of the Group for the year ended 31 March 2000 and 31 March 2001:

• (a) for the year ended 31 March 2000, the audited consolidated profits before and after taxation and minority interests of the Group amounted to approximately HK$28,562,000 and approximately HK$29,274,000 respectively;

• (b) for the year ended 31 March 2001, the audited consolidated loss before and after taxation and minority interests of the Group amounted to approximately HK$323,472,000 and approximately HK$323,320,000 respectively; and

• (c) the audited net asset value of the Group as at 31 March 2000 was approximately HK$99,157,000 and the audited net liabilities of the Group as at 31 March 2001 were approximately HK$240,701,000.

The unaudited consolidated net tangible asset value of the Group as at 24 January 2002 was about HK$314,916,000, which has been adjusted from its audited consolidated net liabilities of about HK$240,701,000 as at 31 March 2001 after having taken into account the financial effects of its debt restructuring exercises as described in its circular dated 28 January 2002.

REASONS FOR THE ACQUISITION

As mentioned in the annual report of the Company for the year ended 31 March 2001, the Company is committed to repositioning itself to investing in businesses that could generate stable, sustainable and sufficient income in the long run and bring about a new outlook to the overall business development and financial structure of the Group.

In October 2001, the Company acquired an approximately 1.99% interest in Hong Kong Satellite Technology Holdings Limited, a company the subsidiaries of which are principally engaged in the development of a satellite communications platform and the manufacture, assembly, marketing and sale of new commercial communications satellites. The Company announced on 3 May 2002 that it has entered into a conditional agreement with Hong Kong Satellite Technology Holdings Limited to acquire a further 1.95% interest in its share capital which, if completed, would bring the Group’s interest to about 3.9% of its issued share capital.

– 10 –

LETTER FROM THE CHAIRMAN

Apart from the Group’s investment in Hong Kong Satellite Technology Holdings Limited, the Company has been continually exploring suitable opportunities to diversify its investment into the technology sector. In this regard, the Company commenced discussions with eCyber in or around April 2002 with a view to acquire an equity interest in Sky Citi-Link, a company in which eCyber (through its wholly owned subsidiary, Teleinvest) holds a 20% equity interest. The pricing for such acquisition was initially negotiated based on a value of about HK$200 million for a 100% equity interest in Sky Citi-Link, which was the same basis applied in determining the price paid by Teleinvest to Happy Win (a wholly owned subsidiary of ATNT) for Teleinvest’s acquisition of a 20% interest in Sky Citi-Link in July 2001. During the course of the Company’s negotiations with eCyber, eCyber indicated to the Company that it could, through eCyber implementing the transactions under the ATNT Agreement and the WTF Agreement, procure Happy Win to dispose of its 80% equity interest in Sky Citi-Link based on a discounted value to that of HK$200 million for the entire equity interest in Sky Citi-Link as described above. The Consideration (i.e. HK$59 million) values the entire equity interest in Sky Citi-Link at HK$73.75 million, representing a discount of about 63% to the initial value of HK$200 million based on which Teleinvest acquired its 20% interest in Sky Citi-Link. Accordingly, the Directors consider it appropriate to facilitate the Acquisition by the Group acquiring through Teleinvest the Sale Shares and the Sale Loan currently held by Happy Win. To this end, the Directors consider it reasonable that the Consideration is HK$4 million in excess of the consideration payable by Teleinvest to Happy Win for the Sale Shares and the Sale Loan under the ATNT Agreement, which excess amount represents the immediate monetary benefit to eCyber in return for its introducing to the Company an investment opportunity in Sky Citi-Link and procuring a discount on the pricing for the Acquisition as described above.

The Directors also consider that the Acquisition, coupled with the interest acquired and to be acquired by the Group in Hong Kong Satellite Technology Holdings Limited, are consistent with the Company’s intention to diversify its investment into the technology field which they anticipate would offer vast market potential. The Company presently intends to hold the interest to be acquired by it in Sky Citi-Link as a long term investment. The Directors believe that it is the interests of the Company to enter into the WTF Agreement.

Having considered the potential of the Group’s investment in Sky Citi-Link following the Acquisition, its intention to diversify its investment into the technology field and the potential to create a strategic partnership with eCyber as a shareholder of Sky Citi-Link, the Directors believe that it is the interests of the Company to enter into the WTF Agreement and that the terms of the WTF Agreement are fair and reasonable (including the amount of the Consideration which is HK$4 million more than the consideration to be paid by Teleinvest to Happy Win for the Sale Shares and the Sale Loan under the ATNT Agreement).

FINANCIAL EFFECTS OF THE ACQUISITION

Net tangible assets

As disclosed in the Company’s circular dated 27 May 2002, the unaudited adjusted consolidated net tangible assets of the Group as at the Latest Practicable Date were about HK$316,400,000 which have been arrived at based on adjustments made to its audited consolidated net liabilities of about HK$240,701,000 as at 31 March 2001. (These adjustments took account of the unaudited interim results of the Group for the six months ended 30 September 2001, the financial effects arising from the previous acquisition of interest in Hong Kong Satellite Technology Holdings Limited by the Company as detailed in its circular dated 3 October 2001, the debt restructuring exercises of the Group as detailed in its circular dated 28 January 2002, various placements of new Shares and issuances of Shares on conversion of the Preference Shares and convertible debentures of the Company and exercises of the Options since 1 April 2001. Further

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LETTER FROM THE CHAIRMAN

particulars of these adjustments are contained in the Company’s circular dated 27 May 2002.) Based on such unaudited adjusted consolidated net tangible assets of the Group of about HK$316,400,000 and 3,201,020,651 Shares in issue as at the Latest Practicable Date, the unaudited adjusted consolidated net tangible asset per Share as at the Latest Practicable Date was about HK$0.0988.

Upon Completion and excluding any financial effects arising from completion of the Placing Agreements or the proposed acquisition by the Group of a further interest in Hong Kong Satellite Technology Holdings Limited as detailed in the Company’s circular dated 27 May 2002, the net asset value of the Group will be increased by an amount equal to the value of the Consideration Shares by reference to the closing price per Share as quoted on the Stock Exchange on Completion. On this basis and assuming that the closing price per Share as quoted on the Stock Exchange on Completion is HK$0.23 (equivalent to its closing price as at the Latest Practicable Date), the net asset value of the Group following the Acquisition will be increased by an amount of about HK$24,672,727 to approximately HK$341,073,000 and the unaudited adjusted consolidated net tangible asset per Share would be increased to about HK$0.10.

Gearing

As at the Latest Practicable Date, the gearing ratio of the Group was about 42%. Immediately following the Acquisition and excluding any financial effects arising from completion of the Placing Agreements or the proposed acquisition by the Group of a further interest in Hong Kong Satellite Technology Holdings Limited as detailed in the Company’s circular dated 27 May 2002, the Group’s gearing ratio is expected to be reduced to about 40%.

Earnings

Since commencement of business operations of Sky Citi-Link and its subsidiaries in the year 2000, Sky Citi-Link had recorded consolidated net losses in its audited and unaudited profit and loss accounts for the two years ended 31 March 2002 averaging about HK$9.98 million per year. Following the Acquisition, the Directors intend to procure Sky Citi-Link and its subsidiaries to focus their efforts on securing a larger base of customers to whom their telecommunication services may be provided in order to improve their financial performance in the longer run. To this end, any potential income generated from the Group’s interest in Sky Citi-Link is expected to enhance the Group’s overall earnings.

IMPLICATIONS UNDER LISTING RULES

Pursuant to the Listing Rules, the Acquisition constitutes a discloseable transaction for the Company. The Consideration Shares will be issued pursuant to a specific mandate to be sought from the Shareholders at the SGM.

Happy Win and Teleinvest have, in the proportions of 80% and 20% respectively (equal to their current respective shareholding interests in Sky Citi-Link), granted the Loan to Sky Citi-Link which totalled about HK$78,395,000 as at 1 May 2002 and which is unsecured, interest free and repayable on demand. Upon Completion, the acquisition by the Group of the Sale Loan (equivalent to 80% of the outstanding amount of the Loan on Completion) will constitute a connected transaction for the Company under Rule 14.25(2)(a) of the Listing Rules since it involves the granting of financial assistance by the Company to Sky Citi-Link, a non-wholly owned subsidiary of the Company following Completion. The Sale Loan will be an unsecured loan due from Sky Citi-Link to the Group as from Completion. The Company (or its wholly owned subsidiary) will enter into a loan agreement with Sky Citi-Link on or before Completion such that, as from Completion, the

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LETTER FROM THE CHAIRMAN

Sale Loan will carry interest at a rate of 2% per annum and will be repayable by Sky Citi-Link on demand. Teleinvest has also agreed with the Company that the remaining 20% of the Loan due from Sky Citi-Link to Teleinvest as from Completion will also be granted on the same commercial terms as those applicable to the Sale Loan.

As the Sale Loan will be granted on normal commercial terms and Teleinvest, the other shareholder of Sky Citi-Link, will only be a connected person of the Company on Completion by virtue of its substantial shareholding in Sky Citi-Link, the granting of the Sale Loan by the Group upon Completion does not require approval from the independent shareholders of the Company under Rule 14.25(2)(a) of the Listing Rules. Details pertaining to the Sale Loan will be included in the Company’s next published annual report and accounts.

GENERAL MANDATE TO ISSUE SHARES

At the special general meeting of the Company held on 20 February 2002, a general mandate to issue Shares was granted to the Directors.

At the SGM, an ordinary resolution will be proposed to grant to the Directors a general mandate, in substitution for the general mandate to issue Shares granted to the Directors on 20 February 2002, to allot, issue or otherwise deal with Shares or convertible securities up to a maximum of 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolution as enlarged by the issue of the Consideration Shares.

The Directors believe that the general mandate for Directors to issue new Shares is in the best interests of the Company as well as the Shareholders. Accordingly, the Directors recommend all Shareholders to vote in favour of the resolution granting the general mandate to issue new Shares.

SPECIAL GENERAL MEETING

The Directors have resolved to convene the SGM to consider and, if thought fit by the Shareholders, to approve, among others, the issue of the Consideration Shares. A resolution will also be proposed to the Shareholders at the SGM for the granting of a general mandate to the Directors to issue Shares. Notice of the SGM is set out on pages 20 to 22 of this circular. Whether or not you are intending to attend the SGM, you are requested to return the enclosed proxy form to the Company at its principal place of business in Hong Kong at 28th to 30th Floors, Workington Tower, 78 Bonham Strand, Sheung Wan, Hong Kong as soon as practicable, but in any event not less than 48 hours prior to the time appointed for the SGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjourned meeting should you so wish.

ADDITIONAL INFORMATION

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

By order of the board of

Wah Tak Fung Holdings Limited Chu David Yu Lin

Chairman

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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.

2. SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date were as follows:

Authorised: 6,840,000,000 Shares 316 Preference Shares Issued and fully paid: 3,201,020,651 Shares as at the Latest Practicable Date 120 Preference Shares Based on the issued share capital as at the Latest Practicable Date and upon issue of the Placing Shares and the Consideration Shares, conversion in full of the Preference Shares (based on a conversion price of HK$0.40 per Share) and exercise in full of the Options, the issued share capital will be: 3,201,020,651 Shares as at the Latest Practicable Date 487,500,000 Placing Shares 107,272,727 Consideration Shares 300,000,000 Shares to be issued on conversion in full of the Preference Shares 78,500,000 Shares to be issued on exercise in full of the Options 4,174,293,378

HK$ 684,000,000 316,000,000 320,102,065 120,000,000 320,102,065 48,750,000 10,727,273 30,000,000 7,850,000

417,429,338

Options

On 11 September 1996, the Company adopted a share option scheme under which the Directors may, at their discretion, invite any employees or directors of the Group to take up options to subscribe for Shares at any time during the period of three years commencing on the expiry of 6 months after the date on which the Options are accepted. The maximum number of Shares in respect of which Options may be granted may not exceed 10% of the issued share capital of the Company excluding any Shares issued on the exercise of Options from time to time.

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GENERAL INFORMATION

APPENDIX

The number of Shares fall to be issued pursuant to an exercise of all outstanding Options as at the Latest Practicable Date was 78,500,000 with an exercise price of between HK$0.10 and HK$0.378 per Share.

Preference Shares

Preference Shares in an aggregate principal amount of HK$283 million were issued on in February 2002 to settle indebtedness of the Group assigned to Mr Chu as detailed in the circular of the Company dated 28 January 2002. The Preference Shares are convertible in whole or in part into Shares at a conversion price per Share equal to the lower of (i) HK$0.40 and (ii) the average of the 10 lowest daily closing prices per Share on the Stock Exchange during the 30 days immediately prior to the date of issue of the conversion notice (subject to adjustments) at any time from the business day after the date of issue of the Preference Shares but prior to the seventh business day before the third anniversary of the date of issue of the Preference Shares.

Unless previously converted, the Company may redeem all but not part of the Preference Shares at their total outstanding principal amount on the third anniversary from the date of issue of the Preference Shares.

The Preference Shares confer upon its holder the right to receive, in priority to the holders of any other class of shares in the capital of the Company, a fixed cumulative cash dividend payable on the principal amount outstanding under the Preference Shares at the rate of 1% per annum. On a return of capital on a winding-up or otherwise, the Preference Shares will rank in priority to any other class of shares in the capital of the Company, provided that the assets of the Company available for distribution to its members will be applied first towards arrears or accruals of the fixed dividend payable on the Preference Shares before repaying the capital paid up on any Preference Share or any other class of shares in the capital of the Company.

The Preference Shares do not entitle its holder to any voting rights at general meetings of the Company, except on a resolution of the Shareholders to vary or abrogate the rights of the holders of Preference Shares. The Preference Shares are not listed and may be assigned or transferred with the prior approval from the Stock Exchange, if so required.

As at the Latest Practicable Date, 120 Preference Shares are in issue and outstanding. Assuming full conversion of all such Preference Shares at a conversion price of HK$0.40 per Share, 300,000,000 Shares will fall to be issued.

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GENERAL INFORMATION

APPENDIX

3. DISCLOSURE OF INTERESTS

(a) Interests of the Directors

As at the Latest Practicable Date, the interests of the Directors in the equity or debt securities of the Company or any of its associated corporations (within the meaning of the SDI Ordinance) which were required to be notified to the Company and Stock Exchange pursuant to Section 28 of the SDI Ordinance (including any interest which any such Director would be deemed or taken to have under Section 31 of or Part I of the Schedule to the SDI Ordinance) or which were required, pursuant to Section 29 of the SDI Ordinance, 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 established by the Stock Exchange, to be notified to the Company and Stock Exchange were as follows:

		Number of Shares held in the Company	Number of Shares held in the Company	Number of Shares held in the Company
		Personal	Family	Corporate
Name of Directors	Notes	interests	interests	interests
Chu David Yu Lin	(1)	612,876,297	241,425,668	152,000,000
Chu Ho Miu Hing	(2)	241,425,668	764,876,297	–
Chan King Hung		5,000,000	–	–

Notes:

• (1) 152,000,000 Shares are held by Quizzical Holdings Limited, a company which is 50% owned by Hunter Valley Group Limited. Hunter Valley Group Limited is 100% owned by Manta Corporation, a corporation which holds such shares as trustee on trust for The Manta Trust, a discretionary trust and the eligible beneficiaries of which include Mr. Chu David Yu Lin and his present children. The family interests of 241,425,668 Shares represent the interests of Mrs Chu Ho Miu Hing, the wife of Mr Chu David Yu Lin.

• (2) The family interests of 764,876,297 Shares represent the personal interests and corporate interests of Mr Chu David Yu Lin, the husband of Mrs Chu Ho Miu Hing.

As at the Latest Practicable Date, Mr Chu was interested in 120 Preference Shares which are convertible into Shares at an initial conversion price equal to the lower of (i) HK$0.40 and (ii) the average of the 10 lowest daily closing prices per Share on the Stock Exchange during the 30 days immediately prior to the date of issue of the conversion notice (subject to adjustments). Assuming that the entire principal amount of HK$120 million under these Preference Shares are converted at a conversion price of HK$0.40 per Share, a total of 300,000,000 Shares will fall to be issued to Mr Chu.

The personal beneficial interests of the Directors in the non-voting deferred shares of the Company’s subsidiaries as at the Latest Practicable Date were as follows:

			Number of
			non-voting
Name of Subsidiary	Note	Name of Director	deferred shares
Calorie Limited	(1)	Chu David Yu Lin	20

Note:

• (1) The non-voting deferred shares practically carry no rights to dividends or to receive notice of or to attend or vote at any general meeting of Calorie Limited or to participate in any distributions on winding-up.

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GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, the Directors and chief executives of the Company held the following outstanding Options:

				Number of
				Shares
				issuable
	Date		Exercise	under the
Name of Director	of grant	Exercisable period	price	Options
			(HK$)
Chu David Yu Lin	01.08.2001	01.02.2002 to 31.01.2005	0.255	5,800,000
Chan King Hung	20.10.1999	28.04.2000 to 27.04.2003	0.17	20,000,000
	01.02.2000	28.08.2000 to 27.08.2003	0.228	3,000,000
	02.03.2001	15.09.2001 to 14.09.2004	0.1	1,000,000
	16.05.2001	18.11.2001 to 17.11.2004	0.1	7,600,000
	01.08.2001	01.02.2002 to 31.01.2005	0.255	5,800,000
Chu Ho Miu Hing	01.02.2000	28.08.2000 to 27.08.2003	0.228	1,600,000
	01.08.2001	01.02.2002 to 31.01.2005	0.255	5,800,000
Chan Fook Lai	01.02.2000	28.08.2000 to 27.08.2003	0.228	1,100,000
	02.03.2001	15.09.2001 to 14.09.2004	0.1	2,000,000
	01.08.2001	01.02.2002 to 31.01.2005	0.255	5,800,000
Lu Xin	16.05.2001	18.11.2001 to 17.11.2004	0.1	5,800,000
	01.08.2001	01.02.2002 to 31.01.2005	0.255	5,800,000

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors had any interest in the shares or other securities of the Company or any of its associated corporations which would have to be notified to the Company and the Stock Exchange pursuant to Section 28 of the SDI Ordinance (including interests which they were deemed or taken to have under Section 31 or Part I of the Schedule to the SDI Ordinance) or which were required, pursuant to Section 29 of the SDI Ordinance, 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 established by the Stock Exchange, to be notified to the Company and the Stock Exchange.

(b) Interests of substantial shareholders

As at the Latest Practicable Date, the following interests of 10% or more of the share capital of the Company were recorded in the register of interests required to be kept by the Company pursuant to Section 16(1) of the SDI Ordinance:

		Number of Shares
Name	Note	Held in the Company
Chu David Yu Lin	(1)	1,006,301,965

Note:

(1) The interests disclosed herein include 612,876,297 Shares directly held by Mr Chu David Yu Lin, 241,425,668 Shares held by Mrs Chu Ho Miu Hing, the wife of Mr Chu David Yu Lin, and 152,000,000 Shares being the corporate interests of Mr Chu David Yu Lin as referred to in note (1) under the section headed “Interests of the Directors” above.

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GENERAL INFORMATION

APPENDIX

According to the register of interests kept by the Company under Section 16(1) of the SDI Ordinance and so far as is known to the Directors other than the interests disclosed herein, there are no other persons (other than a director or chief executive of the Company) who, as at the Latest Practicable Date were, directly or indirectly, beneficially interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any member of the Group or in any options in respect of such capital.

4. LITIGATION

On 17 March 2000, Star Cherry Investments Limited (a subsidiary of the Company), Costa Investments Limited and the Company entered into a conditional sale and purchase agreement for the acquisition of 99 shares in Union View Investments Holdings Limited. As some of the conditions contained in the agreement were not fulfilled, the agreement had lapsed whereupon a deposit of HK$20 million and all other sums paid by Star Cherry Investments Limited to Costa Investments Limited became refundable to Star Cherry Investments Limited. The Company and Star Cherry Investments Limited are currently involved in legal proceedings with Costa Investments Limited for the purpose of recovering the deposits paid. As at the Latest Practicable Date, preparation of witness statements from the parties involved are underway.

On 14 April 2000, a subsidiary of the Company entered into an agreement with Mr He Chenquang to acquire a 40% equity interest in Holdenby Enterprises Limited, a company wholly owned by Mr He Chenquang, for a total consideration of HK$32 million. HK$16 million was paid as a deposit under this agreement. This agreement lapsed due to the non-fulfilment of a condition precedent in the agreement. Pursuant to the agreement, all deposits paid should be refunded by Mr He Chenquang. On 6 March 2001, the subsidiary of the Company issued a writ of summons against Mr He Chenquang to claim for a return of the deposit, interest and costs. The solicitors for Mr He Chenquang took out a Summons on 27 December 2001 seeking security for costs against the subsidiary of the Company. The hearing of the Summons was adjourned to 10 June 2002.

On 29 June 2000, a subsidiary of the Company entered into an agreement with Mr He Chenquang to acquire a 65% equity interest in Drury Profits Limited, a company wholly owned by Mr He Chenquang, for a total consideration of HK$65 million. HK$9,831,000 was paid as a deposit under this agreement. This agreement lapsed due to the non-fulfilment of a condition precedent in the agreement. Pursuant to this agreement, all deposits paid should be refunded by Mr He Chenquang. On 6 March 2001, the subsidiary of the Company issued a writ of summons against Mr He Chenquang to claim for a return of the deposit, interest and costs. The solicitors for Mr He Chenquang took out a Summons on 27 December 2001 seeking security for costs against the subsidiary of the Company. The hearing of the Summons was adjourned to 10 June 2002.

Save as disclosed, so far as the Directors are aware, neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration or claims which is in the opinion of the Directors of material importance and no litigation or claims which is in the opinion of the Directors of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

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GENERAL INFORMATION

APPENDIX

5. GENERAL

• (a) The transfer office of the Company is Secretaries Limited, 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong.

• (b) The secretary of the Company is Mr Navin Aggarwal, Solicitor.

• (c) The English text of this circular shall prevail over the Chinese text.

6. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours on any weekday (public holidays excepted) at the office of the principal place of business of the Company in Hong Kong, 28th to 30th Floors, Workington Tower, 78 Bonham Strand, Sheung Wan, Hong Kong up to 5:00 p.m. on 26 June 2002:

• (a) the memorandum of association and bye-laws of the Company;

• (b) the annual reports of the Company for each of the two years ended 31 March 2000 and 31 March 2001;

• (c) a copy of the WTF Agreement; and

• (d) the circulars of the Company dated 3 October 2001, 28 January 2002 and 27 May 2002.

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NOTICE OF SPECIAL GENERAL MEETING

WAH TAK FUNG HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that a special general meeting of Wah Tak Fung Holdings Limited (the “Company”) will be held at Kennedy Room, Level 7, Conrad Hong Kong, Pacific Place, 88 Queensway, Hong Kong on 27 June 2002 at 10:00 a.m. for the purposes of considering and, if thought fit, passing, with or without modifications, the following resolutions which will be proposed as ordinary resolutions:

ORDINARY RESOLUTIONS

1. “ THAT the agreement dated 1 May 2002 (the “Agreement”) made between the Company, eCyberChina Holdings Limited and Teleinvest Holdings Limited for the acquisition by the Company of (i) 80 shares of US$1.00 each in the capital of Sky Citi-Link ATNT (Holdings) Limited (“Sky Citi-Link”) and (ii) 80% of shareholders’ loans due from Sky Citi-Link to its shareholders as at completion of the Agreement, for a total consideration of HK$59 million, a copy of which has been produced to the meeting marked “A” and have been signed by the Chairman of the meeting for the purpose of identification, be and is hereby approved, ratified and confirmed; and the directors of the Company or any one of them be and are hereby authorised on behalf of the Company:

2. (a) to sign, seal, execute, perfect and deliver all such documents and do all such deeds, acts, matters and things as they may in their discretion consider necessary or desirable for the purpose of or in connection with the implementation of the Agreement;

3. (b) subject to completion of the Agreement, to allot and issue 107,272,727 new ordinary shares of HK$0.10 each in the capital of the Company (“Shares”) in accordance with the terms of, and in satisfaction of the consideration payable by the Company under, the Agreement, such new Shares to be issued credited as fully paid and ranking pari passu in all respects with all the existing issued Shares;

4. (c) to exercise or enforce all of the rights of the Company under the Agreement; and

5. (d) to complete the Agreement in accordance with its terms.”

6. “ THAT , subject to the passing of Resolution numbered 1 set out in the notice convening this meeting:

7. (a) subject to paragraph (c) of this Resolution, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of

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NOTICE OF SPECIAL GENERAL MEETING

the Company and to allot, issue or grant securities convertible into such shares, or options, warrants or similar rights to subscribe for any such shares or such convertible securities and to make or grant offers, agreements and options which might require the exercise of such power whether during or after the end of the Relevant Period be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) of this Resolution shall be in addition to any other authorisations given to the directors of the Company and shall authorise such directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power 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 an option or otherwise) and issued by the directors of the Company pursuant to the approval given in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue; (ii) an issue of shares as scrip dividends pursuant to the bye-laws of the Company from time to time; (iii) an issue of shares under any option scheme or similar arrangement for the time being adopted for the grant or issue to employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company; or (iv) an issue of shares pursuant to the exercise of rights of subscription or conversion under terms of any warrants issued by the Company or any securities which are convertible into shares in the Company, shall not exceed 20% of the aggregate of (1) the nominal amount of the issued share capital of the Company at the date of passing of this Resolution and (2) the nominal amount of all shares which may be issued pursuant to and/or as contemplated under the Agreement (as such term is defined in Resolution numbered 1 set out in the notice convening this meeting) and the said approval shall be limited accordingly;

• (d) subject to the passing of each of paragraphs (a), (b) and (c) of this Resolution, any prior approvals of the kind referred to in paragraphs (a), (b) and (c) of this Resolution which had been granted to the directors of the Company and which are still in effect be and are hereby revoked; and

• (e) for the purpose of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earlier 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 law or the bye-laws of the Company to be held; and

• (iii) the date on which the authority set out in this Resolutions is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.

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NOTICE OF SPECIAL GENERAL MEETING

“Rights Issue” means an offer of shares open for a period fixed by the directors of the Company to the holders of shares of the Company on the register on a fixed record date in proportion to their then holdings of such shares (subject to such exclusion or other arrangements as the directors of the Company 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 any recognised regulatory body or any stock exchange in, any territory outside Hong Kong applicable to the Company).”

By Order of the Board of Wah Tak Fung Holdings Limited Navin Aggarwal Company Secretary

Hong Kong, 10 June 2002

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. A form of proxy in respect of the meeting is enclosed. Whether or not you intend to attend the meeting in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon.

3. To be valid, the form of proxy, together with any power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority must be lodged at the principal place of business of the Company in Hong Kong at 28th to 30th Floors, Workington Tower, 78 Bonham Strand, Sheung Wan, Hong Kong, not less than 48 hours before the time appointed for the meeting or any adjournment thereof.

4. Where there are joint registered holders of a share of the Company, any one of such holders may vote at the meeting either personally or by proxy in respect of such share as if he was solely entitled thereto, but if more than one of such holders be present at the meeting personally or by proxy, that one of such holders so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

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