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


Win Channel Investments Limited	Sheung Hai Developments Limited
(Incorporated in the British Virgin Islands with limited liability)	(Incorporated in the British Virgin Islands with limited liability)

STAR BIO-TECH (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

JOINT ANNOUNCEMENT

Possible mandatory cash offer jointly by
Kingston Securities Limited and Kim Eng Securities (Hong Kong) Limited
on behalf of
Win Channel Investments Limited
and
Sheung Hai Developments Limited
for all the issued shares of
Star Bio-Tech (Holdings) Limited
(other than those already held or agreed to be acquired by
Win Channel Investments Limited, Sheung Hai Developments Limited
and parties acting in concert with them)

and
Connected transaction for Star Bio-Tech (Holdings) Limited
and
Change of nameJoint financial advisers to Win Channel Investments Limited and Sheung Hai Developments Limited


	Kim Eng Capital (Hong Kong) Limited

Agreements

The directors of Win Channel, Sheung Hai and the Company jointly announce that, on 6th February, 2002:

Win Channel, the Company and Mr. Wong entered into the conditional Share Acquisition Agreement pursuant to which (a) Win Channel will subscribe for 2,500,000,000 New Shares for a total cash consideration of HK$25 million, equivalent to HK$0.01 per Share, and (b) Mr. Wong will procure a transfer to Win Channel of the Transfer Shares beneficially owned by Sheung Hai, a company wholly and beneficially owned by Mr. Wong, for a total cash consideration of HK$1.00; and
Sheung Hai and the Company entered into the conditional Subscription Agreement pursuant to which Sheung Hai will subscribe for 2,000,000,000 New Shares for a total cash consideration of HK$20 million, equivalent to HK$0.01 per Share.

Completion of each of the Agreements is conditional on the fulfilment or waiver of certain conditions described below.

Offer

Immediately upon Completion, Win Channel and Sheung Hai and parties acting in concert with them will together be interested in a total of 4,676,375,839 Shares, representing about 93.72% of the issued share capital of the Company as enlarged by the New Shares. On Completion, Kingston Securities and Kim Eng Securities will, on behalf of Win Channel and Sheung Hai, make a mandatory unconditional cash offer pursuant to Rule 26 of the Code for all the issued Shares other than those already held or agreed to be acquired by Win Channel, Sheung Hai or parties acting in concert with them. The Offer is a possibility only and will only be made if Completion takes place. The Offer Document will be despatched to Shareholders as soon as possible following Completion. The Company will apply to the Executive under Note 2 to Rule 8.2 of the Code to postpone the despatch of the Offer Document.

Implications under the Listing Rules

Pursuant to paragraph 19 of the Listing Agreement entered into between the Company and the Stock Exchange and due to the fact that Sheung Hai is a party to the Share Acquisition Agreement, the Share Acquisition Agreement is subject to the approval of the Independent Shareholders at a special general meeting to be convened.

The transaction contemplated under the Subscription Agreement constitute a connected transaction for the Company under the Listing Rules and will be subject to the approval of the Independent Shareholders at a special general meeting to be convened.

A circular of the Company containing, amongst others, details of the above transactions together with a notice convening a special general meeting of the Company will be despatched to the Shareholders as soon as practicable.

Change of Name of the Company

The Company proposes to change its name to “Credit Card DNA Security System (Holdings) Limited (信用卡防盜系統(控股)有限公司*)” in order to reflect further development and future business focus of the Company's business on credit card security related activities.

Price Fluctuation

The Board has noted the recent decreases in the price of the Shares and wish to state that they are not aware of any reason for such decrease save for the entering into the Share Acquisition Agreement and the Subscription Agreement as described above. The Board confirms that there are no negotiations or agreements relating to intended acquisitions or realisations which are discloseable under paragraph 3 of the Listing Agreement. Neither is the Board aware of any matter discloseable under the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a price-sensitive nature.

General

Trading in the Shares was suspended at the request of the Company with effect from 2:30 p.m. on 5th February, 2002 pending the release of this announcement. An application has been made to the Stock Exchange for a resumption of trading in the Shares with effect from 10:00 a.m. on 28th February, 2002.

The Offer is subject to the Completion and may or may not be made. Shareholders and other potential investors should therefore exercise caution when dealing in the Shares.

SHARE ACQUISITION AGREEMENT

Date

6th February, 2002

Parties


Subscriber	:	Win Channel, together with its beneficial owner Mr. Chim, are parties acting in concert with Sheung Hai, a controlling Shareholder.
Company	:	Star Bio-Tech (Holdings) Limited, a company incorporated in Bermuda with limited liability the ordinary shares of which are listed on the Stock Exchange.
Warrantor	:	Mr. Wong, the chairman of the Company and the sole director and shareholder of Sheung Hai, a controlling Shareholder as at the date of this announcement, who has given certain representations, warranties and undertakings in respect of the Company.

Shares to be acquired

Pursuant to the Share Acquisition Agreement, Win Channel will subscribe for a total of 2,500,000,000 New Shares, representing about 510.60% of the existing issued share capital of the Company, about 83.62% of its issued share capital as enlarged by the New Shares subscribed by Win Channel and about 50.10% of its issued share capital as enlarged by the New Shares subscribed by both Win Channel and Sheung Hai.

Pursuant to the Share Acquisition Agreement, Mr Wong will also procure Sheung Hai to transfer to Win Channel a total of 88,187,919 Shares beneficially owned by Sheung Hai, representing about 18.01% of the existing issued share capital of the Company, about 2.95% of its issued share capital as enlarged by the New Shares subscribed by Win Channel and about 1.77% of its issued share capital as enlarged by the New Shares subscribed by both Win Channel and Sheung Hai.

The transfer of the Transfer Shares is based on commercial decision and the ultimate projected shareholdings of Win Channel and Sheung Hai in the Company. The ultimate projected shareholding of Win Channel and Sheung Hai in the Company is estimated to be about in the ratio of 5.5: 4.5 respectively, or as to about 41.25% of the total issued share capital of the Company as enlarged by the subscription of the New Shares owned by Win Channel and as to about 33.75% owned by Sheung Hai after meeting minimum public float requirements under Rule 8.08 of the Listing Rules.

The New Shares and the Transfer Shares will be free from all claims, charges, liens, options, encumbrances and other adverse rights and interests of all kinds and descriptions and together with all rights attached to these Shares as at Completion, including the right to all dividends and distributions which may be declared, paid or made at any time on or after Completion.

Consideration

Amount and payment terms

The total consideration payable by Win Channel for the New Shares is a sum of HK$25 million, equivalent to HK$0.01 per Share, which will be paid to the Company in cash on Completion.

The total consideration payable by Win Channel for the Transfer Shares is a cash sum of HK$1.00 which will be paid to Mr. Wong in cash on Completion.

Basis

The consideration for the New Shares was determined after arm's length negotiations between the parties. The price of HK$0.01 per Share is equivalent to the par value of the Share and represents a discount of about 87.18% to the closing price per Share of HK$0.078, being the closing price immediate before the suspension of trading of Shares on 5th February, 2002, a discount of about 89.36% to HK$0.094, being the average closing price per Share for the ten trading days up to and including 5th February, 2002 and a discount of about 44.44% to the net asset value per Share of about HK$0.018, as derived from the latest published consolidated audited financial statements of the Group as at 30th June, 2001 and adjusted by the issue of new Shares in an aggregate number of 125,000,000 at HK$0.01 per Share on 20th July, 2001, 1st August, 2001 and 15th August, 2001 respectively. The discount looks heavy only in comparison to the prevailing market price. The price was determined on arm's length negotiation between the Company and Win Channel, based on (i) the low liquidity of the Shares; (ii) the difficulty encountered by the Company in procuring subscribers to subscribe bulk volume of Shares; and (iii) the Company's funding needs for its operations including repayment of outstanding debts and payables and development of the business of credit card security services. Thus, the Board considers the subscription price for the New Shares is fair.

Conditions

Completion of the Share Acquisition Agreement is conditional upon all of the following conditions being satisfied (or, as to condition (c), waived by Win Channel):

(a) the Listing Committee of the Stock Exchange having granted listing of and permission to deal in the New Shares;

(b) the passing by Independent Shareholders in general meeting of the necessary resolutions approving the Share Acquisition Agreement, the issue of the New Shares, the transactions contemplated in or incidental to the Share Acquisition Agreement and the implementation thereof; and

(c) the Subscription Agreement having become unconditional in all respects (save for the fulfilment of the condition relating to the Share Acquisition Agreement becoming unconditional).

If the conditions set out above are not fulfilled (or waived as applicable) by 5:00 p.m. on the date falling 120 days after the date of the Agreements or such other date as the parties may agree, the Share Acquisition Agreement will lapse and no party to this agreement will have any claim against or liability to the other parties, save in respect of any antecedent breaches.

Completion

Completion will take place on the third business day after the conditions set out above are fulfilled (or waived as applicable) or such other date as the parties may agree prior to Completion.

SUBSCRIPTION AGREEMENT

Date

6th February, 2002

Parties


Subscriber	:	Sheung Hai, the controlling Shareholder, is a company wholly and beneficially owned by Mr. Wong, and is a party acting in concert with Win Channel and Mr. Chim
Company	:	Star Bio-Tech (Holdings) Limited, a company incorporated in Bermuda with limited liability the ordinary shares of which are listed on the Stock Exchange.

Shares to be acquired

Pursuant to the Subscription Agreement, Sheung Hai will subscribe for a total of 2,000,000,000 New Shares, representing about 408.48% of the existing issued share capital of the Company, about 80.33% of its issued share capital as enlarged by the New Shares subscribed by Sheung Hai and about 40.08% of its issued share capital as enlarged by the New Shares subscribed by both Win Channel and Sheung Hai.

Consideration

Amount and payment terms

The total consideration payable by Sheung Hai for the New Shares is a sum of HK$20 million, equivalent to HK$0.01 per Share, which will be paid to the Company in cash on Completion.

Basis

The consideration for the New Shares was determined after arm's length negotiations between the parties and is the same as the consideration per Share payable by Win Channel. The price of HK$0.01 per Share is equivalent to the par value of the Share and represents a discount of about 87.18% to the closing price per Share of HK$0.078, being the closing price immediate before the suspension of trading of Shares on 5th February, 2002, a discount of about 89.36% to HK$0.094, being the average closing price per Share for the ten trading days up to and including 5th February, 2002 and a discount of about 44.44% to the net asset value per Share of about HK$0.018, as derived from the latest published consolidated audited financial statements of the Group as at 30th June, 2001 and adjusted by issue of new Shares in an aggregate numbers of 125,000,000 at HK$0.01 per Share on 20th July, 2001, 1st August, 2001 and 15th August, 2001 respectively. The discount looks heavy only in comparison to the prevailing market price. The price was determined on arm’s length negotiation between the Company and Sheung Hai, based on (i) the low liquidity of the Shares; (ii) the difficulty encountered by the Company in procuring subscribers to subscribe bulk volume of Shares; and (iii) the Company's funding needs for its operations including repayment of outstanding debts and payables and development of the business of credit card security services. Thus, the Board considers the subscription price for the New Shares is fair.

Conditions

Completion of the Subscription Agreement is conditional upon all of the following conditions being satisfied (or, as to condition (c), waived by Sheung Hai):

(a) the Listing Committee of the Stock Exchange having granted listing of and permission to deal in the New Shares;

(b) the passing by the Independent Shareholders in the special general meeting approving the Subscription Agreement, the issue of the New Shares, the transactions contemplated in or incidental to the Subscription Agreement; and

(c) the Share Acquisition Agreement having become unconditional in all respects (save for the condition relating to the Subscription Agreement becoming unconditional).

If the conditions set out above are not fulfilled (or waived as applicable) by 5:00p.m. on the date falling 120 days after the date of the Agreements or such other date as the parties may agree, the Subscription Agreement will lapse and no party to this agreement will have any claim against or liability to the other parties, save in respect of any antecedent breaches.

Completion

Completion will take place simultaneously with the completion of the Share Acquisition Agreement.

POSSIBLE CASH OFFER

Immediately upon Completion, Win Channel and Sheung Hai and parties acting in concert with them will together be interested in a total of 4,676,375,839 Shares, representing about 93.72% of the issued share capital of the Company as enlarged by the New Shares. On Completion, Win Channel, Sheung Hai and parties acting in concert with them would be obliged under Rule 26 of the Code to make a mandatory unconditional cash offer for all the issued Shares other than those already held or agreed to be acquired by Win Channel, Sheung Hai and parties acting in concert with either of them. The Offer is a possibility only and will only be made if the conditions precedent in the Agreements are fulfilled or waived, as applicable, and Completion takes place. Shareholders and investors should exercise caution when dealing in the Shares.

If Completion takes place, the Offer will be made on terms set out below.

Terms of the Offer

Kingston Securities and Kim Eng Securities will, on behalf of Win Channel and Sheung Hai, make an unconditional cash offer for all the issued Shares other than those already held or agreed to be acquired by Win Channel, Sheung Hai and parties acting in concert with either of them on the following basis:

For each Share HK$0.01 in cash

The price of HK$0.01 per Share under the Offer is the same as that payable by Win Channel for each New Share under the Share Acquisition Agreement and that payable by Sheung Hai for each New Share under the Subscription Agreement.

The Company had, on 19th June, 2001 and 16th July, 2001 respectively, issued the Convertible Notes and, as at the date of this announcement, an aggregate principal amount of HK$24.15 million under the Convertible Notes remains outstanding. Amongst this amount, Convertible Notes of amount of HK$3,550,000 are convertible into Shares at an initial conversion price that represents a twenty per cent. (20%) discount to the average of the closing prices of one Share on the Stock Exchange for each of the last ten Stock Exchange trading days on which dealings in the Shares took place ending on the last such dealing day preceding the conversion date. While the remaining amount of Convertible Notes of HK$20.6 million are convertible into Shares at an adjusted initial conversion price (per Share) of the lower of:

(i) 80% of the average closing prices of one Share on the Stock Exchange for each of the last ten Stock Exchange trading days on which dealings in the Shares took or may have taken place ending on the last of such trading day immediately preceding the conversion date; or

(ii) HK$0.40.

Assuming the conversion prices of the Convertible Notes are calculated at HK$0.0752, being 80% of the average closing prices per share for the ten trading days up to and including 5th February, 2002, about 321,143,617 Shares will be issued upon full conversion of the Convertible Notes, representing about 6.44% of the total issued share capital of the Company as enlarged by the New Shares.

The holder of the Convertible Notes amounted to HK$10,350,000 has undertaken to Win Channel and Sheung Hai that it will not convert any part of the Convertible Notes into Shares during the period from 22nd February, 2002 up to and including the final closing date of the Offer and that it will not accept any offer that Win Channel and Sheung Hai may make for the Convertible Notes held by them while the Offer remains open for acceptance and it has confirmed that Win Channel and Sheung Hai do not have to extend the Offer or make any comparable offer arising out of or in relation to the Offer to it for the Convertible Notes. The holder of the Convertible Notes amounted to HK$13,800,000 has undertaken not to accept the Offer for any Shares converted under the Convertible Notes held by it or make any transfer of shares converted under the Convertible Notes and not to accept any offer that Win Channel and Sheung Hai may make for the Convertible Notes while the Offer remains open for acceptance, and it has confirmed that Win Channel and Sheung Hai do not have to extend the Offer or make any comparable offer arising out of or in relation to the Offer to them for the Convertible Notes and/or any shaers converted under the Convertible Notes on or after 22nd February, 2002.

The Company had also granted Options under its share option scheme. As at the date of this announcement, 24,225,000 Shares, representing 0.49% of the issued share capital of the Company as enlarged by the New Shares, fall to be issued upon exercise in full of all outstanding Options. Holders of all outstanding Options have undertaken to Win Channel and Sheung Hai that they will not exercise any part of the Options into Shares during the period from 22nd February, 2002 up to and including the final closing date of the Offer or accept any offer that Win Channel and Sheung Hai may make for the Options held by them while the Offer remains open for acceptance. All the holders of the Options have confirmed that Win Channel and Sheung Hai do not have to extend the Offer or make any comparable offer arising out of or in relation to the Offer to them for the Options. Details of the Options are as follows:


Exercise period	Exercise price per Share	Number of outstanding Share Options
21st February, 2001 to 20th February, 2003	HK$1.5368	4,275,000
22nd February, 2001 to 21st February, 2003	HK$1.5368	1,050,000
23rd February, 2001 to 22nd February, 2003	HK$1.5368	300,000
25th February, 2001 to 24th February, 2003	HK$1.5368	200,000
5th March, 2001 to 4th March, 2003	HK$1.5368	125,000
6th March, 2001 to 5th March, 2003	HK$1.5368	450,000
30th April, 2001 to 29th April, 2003	HK$0.652	2,450,000
1st May, 2001 to 30th April, 2003	HK$0.652	250,000
6th May, 2001 to 5th May, 2003	HK$0.652	250,000
7th May, 2001 to 6th May, 2003	HK$0.652	250,000
7th May, 2001 to 6th May, 2003	HK$0.672	3,200,000
9th May, 2001 to 8th May, 2003	HK$0.652	150,000
11th May, 2001 to 10th May, 2003	HK$0.652	250,000
27th May, 2001 to 26th May, 2003	HK$0.652	75,000
28th May, 2001 to 27th May, 2003	HK$0.652	75,000
2nd August, 2001 to 1st August, 2004	HK$0.4	3,275,000
1st September, 2001 to 31st August, 2004	HK$0.4	100,000
18th November, 2001 to 17th November, 2003	HK$0.4	7,500,000
		24,225,000

Total consideration payable under the Offer

As at the date of this announcement, the Company has 489,615,679 Shares in issue in which Sheung Hai and parties acting in concert with it are interested in 176,375,839 Shares. Based on an Offer price of HK$0.01 per Share, the total consideration payable by Win Channel and Sheung Hai upon full acceptance of the Offer will be HK$3,132,398.4.

The cost of funding the Offer and the Shares accepted under the Offer will be borne by and shared between Win Channel and Sheung Hai in the ratio of about 5.5 to 4.5 respectively. Kingston Corporate Finance and Kim Eng Capital are satisfied that both Win Channel and Sheung Hai have sufficient financial resources to satisfy full acceptance of the Offer.

Effect of accepting the Offer

By accepting the Offer, Shareholders will be deemed to have warranted that the Shares are sold by them free from all third party rights, charges, equities and encumbrances and together with all rights attached to their Shares, including the right to receive all dividends and distributions declared, made or paid on or after the date of the Agreements.

Stamp duty

Stamp duty at a rate of HK$1.00 per HK$1,000 of the amount payable in respect of relevant acceptances will be deducted from such amount before payment to Shareholders who accept the Offer.

SHAREHOLDINGS AND DEALINGS IN SHARES

As at the date of this announcement, Sheung Hai and parties acting in concert with it are interested in 176,375,839 Shares, representing about 36.02% of the Company's issued share capital and Win Channel does not hold any Shares. None of Win Channel, Sheung Hai and parties acting in concert with them had dealt in any Shares during the six months prior to the date of this announcement.

As at the date of this announcement, the Company has 489,615,679 Shares in issue. The following table illustrates the existing shareholding structure of the Company and the structure immediately after Completion.


	Existing shareholding structure		Shares to be issued and transferred pursuant to the Share Acquisition Agreement and the Subscription Agreement	Shareholding structure (Note) immediately after Completion
Shareholders	Number of Shares	%	Number of Shares	Number of Shares	%
Win Channel and parties acting in concert with it	--	--		2,588,187,919	51.87%
subscription			2,500,000,000
transfer			88,187,919
			2,588,187,919
Sheung Hai and parties acting in concert with it	176,375,839	36.02%		2,088,187,920	41.85%
subscription			2,000,000,000
transfer			(88,187,919)
			1,911,812,081
Total shareholding of Win Channel, Sheung Hai and parties acting in concert with them	176,375,839	36.02%	4,500,000,000	4,676,375,839	93.72%
Public	313,239,840	63.98%		313,239,840	6.28%
Total:	489,615,679	100.00%		4,989,615,679	100.00%

Note: This structure assumes that no conversion of the Convertible Notes or exercise of the Options will have taken place.

INFORMATION ON WIN CHANNEL AND SHEUNG HAI

Win Channel is a company incorporated in the British Virgin Islands, having its registered office at Sea Meadow House, Blackburne Highway, Road Town, Tortola, British Virgin Islands, and is beneficially wholly-owned by Mr. Chim. Mr. Chim, aged 56, has been engaged in financial and securities industry for over 30 years. He is also active with public services. He holds senior titles of various native or commercial associations such as Honorary Adviser of Hong Kong Chiu Chow Chamber of Commerce (香港潮州商會名譽顧問) and Honorary President and Director of Hong Kong Swatow Merchants Association (香港汕頭商會名譽會長). He is a member of the Chinese People's Political Consultative Conference of Shantou (香港人民政治協商會議汕頭市委員). Pursuant to the Settlement Agreement, Mr. Chim has undertaken to the SFC that he will not act or purport to act as a director or otherwise take part or purport to take part in the management of any company listed on the Stock Exchange in Hong Kong for three years from 7th July, 2000.

Sheung Hai is a company incorporated in the British Virgin Islands, having its registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands, and is beneficially wholly-owned by Mr. Wong. Mr. Wong is currently the Chairman and Managing Director of the Company. Mr. Wong has extensive experience and connections in the electronic industry. He achieved numerous awards including the “Hong Kong Young Industrialist Awards 1990” and the 3rd and 4th “World Genius Convention” in 1989 and 1990 respectively and his inventions won extensive public recognition. From January 1996 to June 1999, he was the Chairman of Hong Kong Radio Paging Association. Due to his distinguished achievements in the paging industry and his contributions to Chinese affairs, he was appointed as member for the First Election Committee for Hong Kong Special Administrative Region. Mr. Wong has been engaged in the telecommunications and internet related business for over 20 years.

Win Channel and Sheung Hai have no intention to inject any assets or businesses into the Group.

INFORMATION ON THE GROUP

The Group is principally engaged in the provision of credit cards security services, trading of electronic products such as electronic dictionaries, provision of financial information through pagers, internet and mobile phones and investments in high-tech and bio-technology related businesses.

REASON FOR THE TRANSACTIONS

Win Channel has long been looking for investment opportunities with great potential and was impressed by the credit card security services provided by the Company. Both Win Channel and Sheung Hai believe that the Company's credit cards security service will be further enhanced in terms of technology, marketability and eventually profitability with this new capital injection. The Company recognizes that plastic money will be widely used and acceptable through various transactions regularly. The Company further reckons that it is a very good opportunity in both local and the PRC market. Therefore, it is the intention of the Company to further develop and put its business focus on the credit card security services.

The Company's credit card security system (“DNA Security System”) is a specially designed alert system for credit card transaction on and off line. Information of credit card payment transactions such as payment amounts will be sent to cardholders who are using the DNA Security System through mobile communication network operators in alert messages, which will alert the cardholder of unauthorized uses or credit card frauds. The DNA Security System was launched in September 2001 and is currently used by Dah Sing Bank, which incorporates the DNA Security System into their credit cards as part of the services offered to credit card holders. The Company is under negotiation with other banks in Hong Kong and the PRC for the use of DNA Security System.

The net proceeds of about HK$ 44 million from the subscription of New Shares will be used as to about HK$ 30 million for developing existing businesses of the Group, in particular, the credit card security services, and as to about HK$ 14 million for general working capital purposes, including repayment of outstanding debts and payables.

INTENTION OF WIN CHANNEL AND SHEUNG HAI

It is the intention of Win Channel and Sheung Hai that the existing principal activities of the Group will remain unchanged, and Win Channel and Sheung Hai have no intention of injecting any assets or businesses into the Group or disposing of any major assets of it. Win Channel and Sheung Hai intend to hold its interest in the Company as a long-term investment.

BOARD COMPOSITION

At present, the Board comprises Mr Wong, Mr Chan Kwong On, Daniel, Mr Wong Kam Wing, Mr Wang Zhao Bin, Ms Zhao Hua, Mr Lew Mon Hung, Ms Ha Ping and Mr Sum Mun Kid, Frederick. There will not be any changes to the composition of the Board as a result of Completion or the transactions contemplated in the Agreements.

Pursuant to the Settlement Agreement, Mr. Chim has undertaken to the SFC that he will not act or purport to act as a director or otherwise take part or purport to take part in the management of any company listed on the Stock Exchange in Hong Kong for three years from 7th July, 2000. Mr. Chim has also undertaken that he will not act as or purport to act as a director of the Company or otherwise take part or purport to take part in the management of the Company pursuant to the undertaking in the Settlement Agreement with the SFC or appoint any director to the Board at least up to 7th July, 2003.

Mr. Chim will be a passive investor in the Company in the future. As Mr. Chim has no management power over the Company, by being the largest shareholder of the Company, he can protect his interest in the investment in the Company through exercising his voting rights at shareholders' general meeting of the Company. Thus, the intended shareholding structure of the Company after Completion and meeting the minimum public float requirements under Rule 8.08 of the Listing Rules will allow Mr. Chim to achieve this purpose by holding about 41.25% of the enlarged share capital of the Company.

Mr. Wong and Mr. Chim are parties acting in concert. Mr. Chim will be the leader of the group acting in concert after the Completion of the Agreements. However, Mr. Chim is a passive investor. Mr. Wong will not report to Mr. Chim as there is no management reportability relationship between Mr. Wong and Mr. Chim. Mr. Chim will have no management power and he can only exercise his control over the Company through his voting rights at shareholders general meetings. Mr. Chim and Mr. Wong have confirmed that there is no shareholders' agreement, agreement, arrangement or understanding on how the Company should be managed between Mr. Chim and Mr. Wong or other directors of the Company.

MAINTAINING THE LISTING OF THE SHARES

It is the intention of Win Channel and Sheung Hai that the listing of the Shares on the Stock Exchange be maintained after Completion. The directors of the Company, Win Channel and Sheung Hai will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that a sufficient public float exists for the Shares after Completion as required under the Listing Rules.

The Stock Exchange has stated that, if less than 25% of the issued Shares are in public hands following the Completion, or if the Stock Exchange believes that a false market exists or may exist in the trading of the Shares or that there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend dealings in the Shares.

The Stock Exchange has also stated that, if the Company remains a listed company on the Stock Exchange, any further acquisitions or disposals of assets by the Company and its subsidiaries will be subject to the provisions of the Listing Rules. Pursuant to the Listing Rules, the Stock Exchange has the discretion to require the Company to issue a circular to the Shareholders irrespective of the size of the proposed transactions, particularly when such proposed transaction represents a departure from the principal activities of the Company. The Stock Exchange also has the power to aggregate a series of transactions and any such transaction may result in the Company being treated as a new applicant for listing and subject to the requirements for new applicants as set out in the Listing Rules.

CHANGE OF NAME OF THE COMPANY

The Company proposes to change its name to “Credit Card DNA Security System (Holdings) Limited (信用卡防盜系統(控股)有限公司*)” in order to reflect the further development and future business focus of the Company's business on credit card security related activities and the proposed change of name will proceed even if the Share Acquisition Agreement and the Subscription Agreement cannot become unconditional.

The change of the Company's name will be subject to the approval of the Registrar of Companies in Bermuda and the shareholders of the Company at the special general meeting to be convened.

A circular containing details of the change of the Company's name and a notice convening the special general meeting for the Company's shareholders to approve the change of the Company's name will be despatched to Shareholders as soon as practicable.

A further announcement will be made by the Company to update the Shareholders concerning the change of the Company's name as soon as practicable after the special general meeting.

PRICE FLUCTUATION

Shareholders are advised to exercise caution when dealing in the Shares.

GENERAL

Pursuant to paragraph 19 of the listing agreement entered into between the Company and the Stock Exchange and due to the fact that Sheung Hai is a party to the Share Acquisition Agreement, the Share Acquisition Agreement is subject to the approval of the Independent Shareholders at a special general meeting to be convened. The transaction contemplated under the Subscription Agreement constitute a connected transaction for the Company under the Listing Rules and will be subject to the approval of the Independent Shareholders at a special general meeting to be convened. Win Channel, Sheung Hai, their respective associates and parties acting in concert with them will abstain from voting on the resolutions to approve each of the Share Acquisition Agreement and the Subscription Agreement.

An independent board committee of the Company will be constituted to give recommendations to the Independent Shareholders in respect of these transactions. An independent financial adviser will also be appointed to advise the independent board committee. Once the independent financial adviser is appointed, an announcement in relation to the appointment will be made by the Company. A circular of the Company containing, amongst others, details of these transactions, the recommendation of the independent board committee and the advice of the independent financial adviser, together with a notice convening a special general meeting of the Company, will be despatched to Shareholders as soon as practicable.

Pursuant to Rule 26 of the Code, upon Completion, the Offer will be made by Kingston Securities and Kim Eng Securities on behalf of Win Channel and Sheung Hai. The Offer will only be made if Completion occurs. The Offer Document will be despatched to Shareholders as soon as possible following Completion. The Company will apply to the Executive under Note 2 to Rule 8.2 of the Code to postpone the despatch of the Offer Document.

SUSPENSION AND RESUMPTION OF TRADING

Definitions


“Agreements”	the Share Acquisition Agreement and the Subscription Agreement
“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of directors of the Company
“Code”	Hong Kong Code on Takeovers and Mergers
“Company”	Star Bio-Tech (Holdings) Limited, a company incorporated in Bermuda with limited liability, the ordinary shares of which are listed on the Stock Exchange
“Completion”	completion of the Agreements
“Convertible Notes”	three convertible loan notes due 2004 in an aggregate principal amount of HK$24,150,000 issued by the Company on 19th June, 2001 and 16th July, 2001 respectively
“Executive”	the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administration Region of the People's Republic of China
“Independent Shareholders”	Shareholders other than Win Channel, Sheung Hai, their respective associates and parties acting in concert with them
“Listing Rules”	Rules Governing the Listing of Securities on the Stock Exchange
“Kim Eng Capital”	Kim Eng Capital (Hong Kong) Limited, an investment adviser registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong), an associated company of Kim Eng Securities and one of the joint financial advisers to Win Channel and Sheung Hai
“Kim Eng Securities”	Kim Eng Securities (Hong Kong) Limited, a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)
“Kingston Corporate Finance”	Kingston Corporate Finance Limited, an investment adviser registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong), an associated company of Kingston Securities and one of the joint financial advisers to Win Channel and Sheung Hai
“Kingston Securities”	Kingston Securities Limited, a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)
“Mr. Chim”	Mr. Chim Pui Chung, the ultimate beneficial owner of Win Channel
“Mr. Wong”	Mr. Wong Kam Fu, the chairman of the Company and the sole director and shareholder of Sheung Hai, a controlling shareholder of the Company as at the date of this announcement
“Offer”	the possible unconditional cash offer by Kingston Securities and Kim Eng Securities on behalf of Win Channel and Sheung Hai, for all the issued Shares other than those already held or agreed to be acquired by Win Channel, Sheung Hai or parties acting in concert with them
“Offer Document”	a composite offer document to be issued by Win Channel, Sheung Hai and the Company containing, amongst others, details of the Agreements and the terms of the Offer
“Options”	options to subscribe for Shares granted under the share option scheme of the Company adopted on 11th April, 1994 and modified on 27th July, 2001
“New Shares”	a total of 4,500,000,000 new Shares to be issued, of which 2,500,000,000 Shares to be issued to Win Channel under the Share Acquisition Agreement and of which 2,000,000,000 Shares to be issued to Sheung Hai under the Subscription Agreement
“Settlement Agreement”	the agreement dated 6th July, 2000 and made between the SFC, Mr. Chim and the provisional liquidators of Mandarin Resources Corporation Limited in respect of the settlement of the Hong Kong High Court Companies Winding Up Proceedings No.348 of 1996
“SFC”	Securities and Futures Commission in Hong Kong
“Share Acquisition Agreement”	a conditional agreement entered into between Win Channel, the Company and Mr Wong on 6th February, 2002 in connection with the subscription by Win Channel of 2,500,000,000 New Shares and the transfer to Win Channel of the Transfer Shares
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the Company
“Shareholders”	holders of Shares
“Sheung Hai”	Sheung Hai Developments Limited, a company incorporated in the British Virgin Islands with limited liability which is interested in about 36.02% of the issued share capital of the Company as at the date of this announcement and which is wholly and beneficially owned by Mr Wong, and is a party acting in concert with Win Channel
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscription Agreement”	a conditional agreement entered into between Sheung Hai and the Company on 6th February, 2002 in connection with the subscription by Sheung Hai of 2,000,000,000 New Shares
“Transfer Shares”	a total of 88,187,919 Shares beneficially owned by Sheung Hai to be transferred to Win Channel pursuant to the Share Acquisition Agreement
“Win Channel”	Win Channel Investments Limited, a company incorporated in the British Islands with limited liability which, together with its beneficial owner, are parties acting in concert with Sheung Hai
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

By order of the sole director of
Win Channel Investments Limited
Chim Pui Chungsole director

By order of the sole director of
Sheung Hai Developments Limited
Wong Kam Fusole director

By order of the board of directors of
Star Bio-Tech (Holdings) Limited
Wong Kam FuChairman

Hong Kong, 27th February, 2002

* Chinese name for identification purposes only

The sole director of Win Channel, Mr. Chim, accepts full responsibility for the accuracy of the information contained in this announcement, in so far as it relates to Win Channel, and confirms, having made all reasonable enquiries, that to the best ofhis knowledge, opinions expressed in this announcement, in so far as it relates to Win Channel, have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any statement in this announcement misleading.

The sole director of Sheung Hai, Mr. Wong, accepts full responsibility for the accuracy of the information contained in this announcement, in so far as it relates to Sheung Hai, and confirms, having made all reasonable enquiries, that to the best of his knowledge, opinions expressed in this announcement, in so far as it relates to Sheung Hai, have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any statement in this announcement misleading.

The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement, other than that relating to Win Channel and Sheung Hai, and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement, other than those relating to Win Channel and Sheung Hai, have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any statement in this announcement misleading.

Please also refer to the published version of this announcement in the Hong Kong iMail.

AI assistant

G-Resources Group Limited M&A Activity 2002

Offer

Implications under the Listing Rules

Change of Name of the Company

Price Fluctuation

General

Date

Parties

Consideration

Amount and payment terms

Basis

Conditions

Completion

Date

Parties

Consideration

Amount and payment terms

Basis

Conditions

Completion

Terms of the Offer

Effect of accepting the Offer

Stamp duty

Definitions

AI assistant

G-Resources Group Limited — M&A Activity 2002

Offer

Implications under the Listing Rules

Change of Name of the Company

Price Fluctuation

General

Date

Parties

Consideration

Amount and payment terms

Basis

Conditions

Completion

Date

Parties

Consideration

Amount and payment terms

Basis

Conditions

Completion

Terms of the Offer

Effect of accepting the Offer

Stamp duty

Definitions

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G-Resources Group Limited M&A Activity 2002