GoFintech Quantum Innovation Limited — Major Shareholding Notification 2002

Feb 19, 2002

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 to reliance upon the whole or any part of the contents of this announcement.

(太平洋興業集團有限公司)*

(incorporated in Bermuda with limited liability)

CHANGE OF SUBSTANTIAL SHAREHOLDER AND THE LATEST DEVELOPMENT OF THE PETITION

The Company has been notified by Super Drive, being the single largest shareholder of the Company, that pursuant to the Sale and Purchase Agreement, Super Drive has agreed to sell or procure the sale to Mega Land a total of 84,511,600 Shares (including 2,500,000 Shares and 432,000 Shares held by Dr. Chiang and Ms. Chan respectively), representing in aggregate approximately 29.50% of the issued share capital of the Company as at the signing of the Sale and Purchase Agreement, for a consideration of HK$153,000,000 in aggregate, representing approximately HK$1.81 per Sale Share.

Super Drive has conditionally agreed with the Placing Agent, which has undertaken to place 11,964,400 Shares, representing approximately 4.17% of the Company's issued share capital, to independent investors at a price of not less than HK$0.29 and not more than HK$0.325 per Share.

The Sale and Purchase Agreement is conditional upon, inter alia, the Executive confirming that Mega Land and parties acting in concert with it will not incur a mandatory obligation to make a general offer for all the issued Shares other than those already acquired or agreed to be acquired by the Purchaser and its concert parties as a result of the transactions contemplated under the Sale and Purchase Agreement. The Placing Agreement is conditional upon the completion of the Sale and Purchase Agreement.

Upon the completion of the Sale and Purchase Agreement and the Placing Agreement, Super Drive, Dr. Chiang and Ms. Chan will cease to hold any Shares. Mega Land will become the largest shareholder of the Company, holding 29.50% of the Company Shares, and Kistefos will remain holding 21.78% of the Company Shares.

In respect of the Petition presented by Kistefos, the hearing of the Company's appeal filed on 13 December 2001 against the Court decision of not striking out the claim of Kistefos in requesting the Company to repurchase their Shares in the Company, as well as the cross appeal of Kistefos filed on 1 February 2002 against, inter alia, the Court decision of striking out the claim of Kistefos in winding up the Company, had been scheduled to take place in The Court of Appeal of Bermuda from the week commencing 17 June 2002.

Trading in the Shares was suspended from 10 a.m. on 7th February, 2002 at the request of the Company pending the issue of this announcement and application has been made to the Stock Exchange for the resumption of trading of the Shares from 10:00 a.m. on 19th February, 2002.

SALE OF SALE SHARES BY A SUBSTANTIAL SHAREHOLDER

The Company has been notified by Super Drive that, pursuant to the Sale and Purchase Agreement entered into on 6th February, 2002, Super Drive has agreed to sell or procure the sale to Mega Land the Sale Shares under the following terms and conditions.

Details of the Sale and Purchase Agreement

Vendor : Super Drive, a private company incorporated in the British Virgin Islands which is wholly owned by E1 Media Technology Limited, a company in which Dr. Chiang has 60% interest

Purchaser : Mega Land, a company incorporated in the British Virgin Islands and wholly owned by Mr. Zhang. The Company has been informed by Mega Land that Mega Land is an independent third party not connected or acting in concert with Dr. Chiang, Super Drive, the Placing Agent, the directors, chief executive or substantial shareholders of the Company and its subsidiaries or any of their respective associates and does not have any previous shareholding in the Company

Sale Shares : a total of 84,511,600 Shares representing in aggregate approximately 29.5% of the existing issued share capital of the Company. The Vendor confirms that the Sale Shares to be delivered to the Purchaser under the Sale and Purchase Agreement includes 2,500,000 Shares held by Dr. Chiang and 432,000 Shares held by Ms. Chan, representing together approximately 1.02% of the issued share capital of the Company as at the date of execution of the Sale and Purchase Agreement

Conditions : The completion of the Sale and Purchase Agreement is conditional upon, inter alia,

1. the Executive confirming that Mega Land and parties acting in concert with it will not incur a mandatory obligation to make an offer for all the Shares not already acquired or agreed to be acquired by Mega Land and its concert parties pursuant to Rule 26 of the Code; and
2. neither of the Applicants has received before 28th February 2002 any written objection from any relevant authority in Hong Kong to the transactions contemplated under the Sale and Purchase Agreement.

Consideration : HK$153,000,000 in aggregate, representing approximately HK$1.81 per Sale Share and the Company has been informed that the consideration was determined after arm's length negotiations between Super Drive and Mega Land.

The consideration of approximately HK$1.81 per Sale Share paid by Mega Land represents (i) a premium of approximately 457% over the closing price of HK$0.325 per Share quoted on the Stock Exchange on 6 February, 2002, being the last trading day of the Shares on the Stock Exchange immediately prior to the suspension in the trading of the Shares pending the release of this announcement; and (ii) a premium of approximately 464% over the average closing price of approximately HK$0.321 per Share as quoted on the Stock Exchange from 24th January, 2002 to 6th February, 2002, both dates inclusive, being the last ten trading days on which the Shares were traded on the Stock Exchange immediately prior to the suspension in the trading of the Shares pending the release of this announcement .

Completion : Completion of the Sale and Purchase Agreement is expected to take place on or before 28th February, 2002 or such later time as may be agreed between the Purchaser and the Vendor in writing.

Completion of the Sale and Purchase Agreement is conditional upon the satisfaction of all of the abovementioned conditions, none of which shall be waived unless otherwise agreed by the Purchaser and the Vendor in writing. Completion of the Sale and Purchase Agreement is not conditional upon any latest development of the Petition.

PLACING OF PLACING SHARES BY A SUBSTANTIAL SHAREHOLDER

The Company has been notified by Super Drive that, pursuant to the Placing Agreement entered into on 7th February, 2002, Super Drive has agreed to place the Placing Shares under the following terms and conditions.

Details of the Placing Agreement

Vendor : Super Drive

Placing Agent : The Placing Agent is independent of, not connected with Super Drive, Mega Land, Dr. Chiang, directors, chief executive or substantial shareholders of the Company and its subsidiaries or any of their respective associates. The Placing Agent receives placement commission of 5% on the gross proceeds of the Placing.

Placing : The Placing Agent undertakes to procure placees for all the Placing Shares, or failing which to purchase all the Placing Shares itself.

Placees : According to the Placing Agreement, the Placing Agent shall use its reasonable endeavours to ensure that the placees (who will be more than one in number) will be independent of, and not connected with Super Drive, Mega Land, Dr. Chiang, directors, chief executive or substantial shareholders of the Company and its subsidiaries or any of their respective associates. It is expected that no placee will become a substantial shareholder of the Company as a result of the Placing.

Placing price : Not less than HK$0.29 and not more than HK$0.325 per Placing Share. This price was agreed after arm's length negotiations and represents (i) a price at a discount ranging from approximately 10.8% to 0%, over the closing price of the Shares of HK$0.325 as quoted on the Stock Exchange on 6th February, 2002, being the last trading day of the Shares on the Stock Exchange immediately prior to the suspension in the trading of the Shares pending the release of this announcement; and (ii) a price ranging between a discount of approximately 9.7% and a premium of approximately 1.2% to the average closing price of approximately HK$0.321 per Share as quoted on the Stock Exchange from 24th January, 2002 to 6th February, 2002, both dates inclusive, being the last ten trading days of the Shares on the Stock Exchange immediately prior to the suspension in the trading of the Shares pending the release of this announcement .

Number of : 11,964,400 Shares, representing approximately 4.17% of the

existing Shares existing issued share capital of the Company, which are

to be placed beneficially held by Super Drive.

Condition : The Placing Agreement is conditional upon the completion of the Sale and Purchase Agreement in all respects including, but not limited to, the Executive confirming that Mega Land and parties acting in concert with it will not incur a mandatory obligation to make a general offer for all the Shares not already acquired or agreed to be acquired by Mega Land and its concert parties pursuant to Rule 26 of the Code.

Termination : The Placing is subject to termination by the Placing Agent in writing on the occurrence of certain events prior to the second Business Day prior to the completion of the Placing, including (among other things):

1. such circumstances where it comes to the notice of the Placing Agent that there has been a material adverse change in the business or financial or trading position of the Group taken as a whole which is reasonably considered by the Placing Agent to be material; or
2. certain events of force majeure which might materially adversely affect the outcome of the Placing including, inter alia , (i) the introduction or amendment of any laws which may affect the Company, (ii) any event which might adversely affect the prevailing political, economic or stock market conditions, or (iii) any material change in the conditions of local or national currency or securities markets.

Completion of : Completion of the Placing will take place on or before the

the Placing 7th day after the completion of the Sale and Purchase Agreement.

Completion of the Placing Agreement is conditional upon the satisfaction of the abovementioned condition which shall not be waived unless otherwise agreed between Super Drive and the Placing Agent in writing.

SHAREHOLDING IN THE COMPANY

The shareholdings of Super Drive, Dr. Chiang, Ms. Chan, Mega Land and the public in the Company before and after the completion of the Agreements as notified to the Company are as follows:

Shareholding Shareholding

before the signing after completion

Number of Shares of the Agreements Number of Shares of the Agreements

Super Drive 93,544,000 32.65% - 0.00%

Dr. Chiang 2,500,000 0.87% - 0.00%

Ms. Chan 432,000 0.15% - 0.00%

Mega Land - 0.00% 84,511,600 29.50%

Kistefos 62,400,000 21.78% 62,400,000 21.78%

Public 127,604,000 44.55% 139,568,400 48.72%

Total 286,480,000 100.00% 286,480,000 100.00%

OTHER MATTERS

Change of Directors

Upon completion of the Sale and Purchase Agreement, all the current Directors of the Company shall resign and representatives shall be nominated by Mega Land to be appointed as new Directors of the Company. It is the intention of Mega Land that Mr. Zhang will be appointed as a Director upon completion of the Sale and Purchase Agreement, and further announcement will be made after completion of the Sale and Purchase Agreement regarding the identity and composition of the new board of Directors. Mega Land has informed the Company that it does not have any business which competes with the existing business operations of the Group.

Information of Mega Land and its shareholder

Mega Land is a company incorporated in the British Virgin Islands, the entire beneficial interest of which is beneficially owned by Mr. Zhang and of which Mr. Zhang is the sole director. Mr. Zhang, aged 37, graduated from the University of Zhong Nan Cai Jing, Wuhan and was the general manager and chairman of Chongqing Gang-Tian Hotel Limited. Mr. Zhang is now an independent business investor with investment interests in listed securities portfolios principally in Shanghai and Shenzhen, PRC.

Future intentions of Mega Land regarding the Group

Mega Land intends that the Group will continue with its existing principal business activities of corporate finance advisory and trading. As referred to above, the Purchaser has informed the Company that it does not have any business which competes with the existing business operations of the Group. Mega Land has also informed the Company that currently it has no intention to change the existing business of the Company or inject any new businesses or assets to the Group. Furthermore, Mega Land intends to maintain the listing status of the Company on the Stock Exchange, and Mega Land has no intention to make any changes to the existing management of the Group (other than the resignation of all the existing Directors and the appointment of new Directors as referred to in the paragraph headed "Change of Directors" above). Furthermore, Mega Land believes that based on the extensive business connections, experience and expertise of Mr Zhang in PRC and in listed securities portfolio investments as referred to in the paragraph headed "Information on Mega Land and its shareholder" above, Mr Zhang will be able to contribute towards the further development of the Company by bringing in more extensive exposure to business connections and opportunities and by deploying the financial and investment skills of the Group in projects emerging in other parts of PRC which may arise after its accession into the World Trade Organization.

The Stock Exchange had indicated that if the Company remains a listed company on the Stock Exchange, any acquisition or disposal of assets will be subject to the provisions of the Listing Rules. The Stock Exchange will also closely monitor all acquisitions or disposals of assets by the Company. The Stock Exchange has the discretion to require the Company to issue a circular to its shareholders if any acquisition or disposal by the Company is proposed, irrespective of the size of such transactions and in particular where such transactions represent a departure from the principal activities of the Group. The Stock Exchange also has the power pursuant to the Listing Rules to aggregate a series of transactions by the Company and any such transactions may result in the Company being treated as a new listing applicant and subject to the requirements for new listing applications as set out in the Listing Rules.

Latest development of the Petition

The Company was informed by its legal advisors in Bermuda that the hearing of the Company's appeal filed on 13 December 2001 against the Court decision of not striking out the claim of Kistefos in requesting the Company to repurchase their Shares in the Company, as well as the cross appeal of Kistefos filed on 1 February 2002 against, inter alia, the Court decision of striking out the claim of Kistefos in winding up the Company, had been scheduled to take place in The Court of Appeal of Bermuda from the week commencing 17th June 2002 on which date the Company will apply for suspension in the trading of the Shares of the Company pending the outcome of the hearing. Further announcements will be made by the Company regarding any material development on the Petition when appropriate.

GENERAL

Trading in the Shares was suspended with effect from 10 a.m. on 7th February, 2002 at the request of the Company pending the issue of this announcement. Application has been made to Stock Exchange for the resumption in trading of the Shares with effect from 10:00 a.m. on 19th February, 2002.

DEFINITIONS

"Agreements" the Sale and Purchase Agreement and the Placing Agreement

"associate" shall have the meaning ascribed to them in the Listing Rules

"Board" the board of Directors

"Business Day" any day (excluding a Saturday) on which banks generally are open for business in Hong Kong

"Code" Hong Kong Code on Takeovers and Mergers

"Company" Pacific Challenge Holdings Limited, a company incorporated in Bermuda, the securities of which are listed on the Stock Exchange

"Court" the Supreme Court of Bermuda

"Director(s)" the director(s) of the Company

"Dr. Chiang" Dr. Lily Chiang, the chairman of the Board who is beneficially interested in 2,500,000 Shares, representing approximately 0.87% of the issued share capital of the Company

"Executive" the Executive Director of the Corporate Finance Division of the Securities and Futures Commission or any of his/her delegate

"Group" the Company and its subsidiaries

"Kistefos" Kistefos Investment A.S., a substantial shareholder of the Company which is beneficially interested in 62,400,000 Shares of the Company, representing approximately 21.78% of the issued share capital of the Company

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange

"Mega Land" Mega Land Investments Limited, a company incorporated in the British Virgin Islands which is wholly owned by Mr. Zhang and of which Mr Zhang is the sole director

"Mr. Zhang" Mr. Zhang Ming Yu, the sole director and shareholder of Mega Land

"Ms. Chan" Ms. Chan Yim Fong, Teli, a director of the Company who is beneficially interested in 432,000 Shares, representing approximately 0.15% of the issued share capital of the Company

"Petition" the petition presented by Kistefos against the Company and a Director under Section 111(1) of the Companies Act 1985 of Bermuda on 8 March 2001, the details and latest development of which have been disclosed in the Company's announcements dated 13 March 2001, 2 May 2001, 21 May 2001, 20 September 2001 and 3 October 2001

"Placing" the placing of the Placing Shares on the terms and conditions of the Placing Agreement

"Placing Agent" ICEA Securities Limited, a securities dealer registered under the Securities Ordinance (Cap. 333 of the laws of Hong Kong)

"Placing Agreement" the placing agreement dated 7th February, 2002 entered into between Super Drive and the Placing Agent in respect of the placing of the Placing Shares

"Placing Shares" 11,964,400 Shares, representing in aggregate approximately 4.17% of the issued share capital of the Company

"PRC" the People's Republic of China

"Sale and the sale and purchase agreement dated 6th

Purchase Agreement" February, 2002 entered into between Super Drive and Mega Land in respect of the sale and purchase of the Sale Shares

"Sale Shares" a total of 84,511,600 Shares representing in aggregate approximately 29.5% of the issued share capital of the Company as at the date of signing of the Sale and Purchase Agreement

"Shares" ordinary shares of HK$0.10 each in the capital of the Company

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"Super Drive" Super Drive Inc., a private company incorporated in the British Virgin Islands which is wholly owned by E1 Media Technology Limited, a company in which Dr. Chiang has 60% interest

For and on behalf of

Pacific Challenge Holdings Limited

Wu Yan Mo

Company Secretary

* For identification purpose only

Hong Kong, 18th February, 2002

The directors of Pacific Challenge Holdings Limited jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement 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 China Daily"