JiaChen Holding Group Limited — Proxy Solicitation & Information Statement 2008

Oct 27, 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in 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 or transferred all your shares in China Rare Earth Holdings Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Capitalised terms used in this cover shall have the same meanings as those defined in the section headed “Definitions” in this circular.

The Stock Exchange 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.

CHINA RARE EARTH HOLDINGS LIMITED 中國稀土控股有限公司 (incorporated in the Cayman Islands with limited liability) (Stock Code: 769)

DISCLOSEABLE TRANSACTIONS: ACQUISITION OF XINGHUA AND ACQUISITION OF DONGYE

27 October 2008

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Xinghua Acquisition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Information of Xinghua . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Reasons for the Xinghua Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Dongye Acquisition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Information of Dongye . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Reasons for the Dongye Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Financial effects of the Xinghua Acquisition and the Dongye Acquisition . . . . . . . . . . . . . . .	10
Discloseable transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix – General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

DEFINITIONS

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

• “2008 Dongye Audited Net Profit”

• the net profit after tax and before extraordinary items of Dongye for the year ending 31 December 2008 as shown in the 2008 Dongye Audited Report

• “2008 Dongye Audited Report”

the audited financial statements of Dongye for the year ending 31 December 2008 prepared in accordance with the PRC generally accepted accounting principles by a firm of auditors appointed by the Purchaser

• “2008 Xinghua Audited Net Profit” the net profit after tax and before extraordinary items of Xinghua for the year ending 31 December 2008 as shown in the 2008 Xinghua Audited Report

• “2008 Xinghua Audited Report”

• the audited financial statements of Xinghua for the year ending 31 December 2008 prepared in accordance with the PRC generally accepted accounting principles by a firm of auditors appointed by the Purchaser

• “Company”

China Rare Earth Holdings Limited (中國稀土控股有限公司), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange

• “Directors”

the directors of the Company

• “Dongye” 和平縣東冶稀土新材料有限公司(Heping County Dongye Rare Earth Company Limited), a company established in the PRC, the target company of the Dongye Acquisition Agreement

• “Dongye Acquisition”

• the acquisition by the Purchaser of the Dongye Sale Interest from the Dongye Vendors pursuant to the Dongye Acquisition Agreement

• “Dongye Acquisition Agreement”

• the agreement dated 16 October 2008 entered into between Yan Yinhua and Lan Jingxian as vendors and the Yixing Xinwei as purchaser in relation to the Dongye Acquisition

• “Dongye Completion”

• completion of the Dongye Acquisition Agreement in accordance with its terms

• “Dongye Consideration”

the aggregate sum of the Dongye Basic Consideration and the Dongye Earn-out (if any)

1

DEFINITIONS

“Dongye Sale Interest” the beneficial interest representing the entire registered capital of Dongye, to be acquired by the Purchaser from the Dongye Vendors pursuant to the Dongye Acquisition Agreement “Dongye Vendors” Yan Yinhua and Lan Jingxian, holders of the beneficial interest in the Dongye Sale Interest “Enlarged Group” the Company and its subsidiaries immediately after the completion of the Xinghua Acquisition and the Dongye Acquisition in accordance with the terms of each of the Xinghua Acquisition Agreement and the Dongye Acquisition Agreement “Group” the Company and its subsidiaries from time to time “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Latest Practicable Date” 23 October 2008, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “PRC” the People’s Republic of China which for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region and Taiwan “Purchaser” or “Yixing Xinwei” 宜興新威利成稀土有限公司(Yixing Xinwei Leeshing Rare Earth Company Limited), a 95% owned subsidiary of the Company “RMB” Renminbi, the lawful currency of the PRC “SFO” the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) “Shareholders” shareholders of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Xinghua” 江華瑤族自治縣興華稀土新材料有限公司(Xinghua Rare Earth Company Limited), a company established in the PRC, the target company of the Xinghua Acquisition Agreement

2

DEFINITIONS

“Xinghua Acquisition” the acquisition by the Purchaser of the Xinghua Sale Interest from the Xinghua Vendors pursuant to the Xinghua Acquisition Agreement

“Xinghua Acquisition Agreement” the agreement dated 3 October 2008 entered into between Shao Jufang and Xie Fadi as vendors and the Yixing Xinwei as purchaser in relation to the Xinghua Acquisition

“Xinghua Completion” completion of the Xinghua Acquisition Agreement in accordance with its terms

“Xinghua Consideration” the aggregate sum of the Xinghua Basic Consideration and the Xinghua Earn-out (if any)

“Xinghua Sale Interest” the beneficial interest representing the entire registered capital of Xinghua, to be acquired by the Purchaser from the Xinghua Vendors pursuant to the Xinghua Acquisition Agreement “Xinghua Vendors” Shao Jufang and Xie Fadi, holders of the beneficial interest in the Xinghua Sale Interest “%” per cent

In this circular, for the purpose of illustration only, amounts quoted in RMB have been converted into HK$ at the rate of RMB0.876 to HK$1.00. Such exchange rates have been used, where applicable, for the purposes of illustration only and do not constitute a representation that any amounts were or may have been exchanged at these or any other rates or at all.

The English translation of the Chinese name of the relevant parties is for information purposes only, and should not be regarded as the official English translation of such name.

3

LETTER FROM THE BOARD

CHINA RARE EARTH HOLDINGS LIMITED 中國稀土控股有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 769)

Executive Directors: Mr JIANG Quanlong Ms QIAN Yuanying Ms XU Panfeng Mr JIANG Cainan

Independent non-executive Directors: Mr LIU Yujiu Mr HUANG Chunhua Mr JIN Zhong

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business: Dapu, Yixing Jiangsu Province, PRC

Place of business in Hong Kong: 15th Floor, Club Lusitano 16 Ice House Street Central Hong Kong

27 October 2008

To the Shareholders and, for information only,

the holders of options of the Company

Dear Sir or Madam

DISCLOSEABLE TRANSACTIONS: ACQUISITION OF XINGHUA AND ACQUISITION OF DONGYE

INTRODUCTION

On 6 October 2008, it was announced that Yixing Xinwei, Shao Jufang and Xie Fadi entered into the Xinghua Acquisition Agreement on 3 October 2008, pursuant to which Yixing Xinwei has conditionally agreed to acquire the Xinghua Sale Interest representing the entire registered capital

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LETTER FROM THE BOARD

of Xinghua, from Shao Jufang and Xie Fadi at the Xinghua Basic Consideration (defined below) of RMB135,000,000 (equivalent to approximately HK$154,110,000), with an earn-out as detailed below. The principal terms of the Xinghua Acquisition Agreement are set out in the paragraph headed “Xinghua Acquisition Agreement” below.

On 20 October 2008, it was announced that Yixing Xinwei, Yan Yinhua and Lan Jingxian entered into the Dongye Acquisition Agreement on 16 October 2008, pursuant to which Yixing Xinwei has conditionally agreed to acquire the Dongye Sale Interest representing the entire registered capital of Dongye, from Yan Yinhua and Lan Jingxian at the Dongye Basic Consideration (defined below) of RMB100,000,000 (equivalent to approximately HK$114,160,000), with an earn-out as detailed below. The principal terms of the Dongye Acquisition Agreement are set out in the paragraph headed “Dongye Acquisition Agreement” below.

Yixing Xinwei is a 95% owned subsidiary of the Company, and Xinghua and Dongye are companies established in the PRC.

The purpose of this circular is to provide you with further information regarding the Xinghua Acquisition, the Dongye Acquisition and other relevant information.

The Company had entered into the Xinghua Acquisition Agreement and the Dongye Acquisition Agreement on 3 October 2008 and 16 October 2008 respectively. Details of the two acquisition agreements are set out below.

XINGHUA ACQUISITION AGREEMENT

Date

3 October 2008

Parties

Vendors: (i) Shao Jufang, holding 60% of the beneficial interest in the Xinghua Sale Interest; and

(ii) Xie Fadi, holding 40% of the beneficial interest in the Xinghua Sale Interest

Purchaser: Yixing Xinwei

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Xinghua Vendors and Xinghua are third parties independent of the Company and connected persons of the Company. The Company does not have any transactions with the Xinghua Vendors completed within 12 months prior to the Xinghua Acquisition.

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LETTER FROM THE BOARD

Interest to be acquired

Subject to the terms and conditions of the Xinghua Acquisition Agreement, the Purchaser has conditionally agreed to acquire from the Xinghua Vendors, and the Xinghua Vendors have conditionally agreed to sell to the Purchaser, the Xinghua Sale Interest, representing the entire registered capital of Xinghua.

Xinghua Consideration

The Xinghua Consideration shall be the aggregate sum of the Xinghua Basic Consideration (as defined below) and the Xinghua Earn-out (as defined below) and shall be determined in the following manner:

1. Xinghua Basic Consideration

The Xinghua Basic Consideration shall be RMB135,000,000 (equivalent to approximately HK$154,110,000), of which RMB81,000,000 (equivalent to approximately HK$92,470,000) shall be paid to Shao Jufang and RMB54,000,000 (equivalent to approximately HK$61,640,000) shall be paid to Xie Fadi. The Xinghua Basic Consideration shall be settled in cash by cheque or telegraphic transfer upon Xinghua Completion.

2. Xinghua Earn-out

If the 2008 Xinghua Audited Net Profit shall be greater than RMB27,000,000 (equivalent to approximately HK$30,820,000), the Purchaser shall pay the Xinghua Vendors (in accordance with each of the Xinghua Vendors’ percentage interest in the registered capital of Xinghua as at the date of the Xinghua Acquisition Agreement) an earn-out as calculated by the following formula:

Xinghua Earn-out = (2008 Xinghua Audited Net Profit X 5) – Xinghua Basic Consideration

The Xinghua Earn-out calculated in accordance with the formula above, if any, shall be paid by the Purchaser to the Xinghua Vendors in cash by cheque or by telegraphic transfer within 15 days after the date of issue of the 2008 Xinghua Audited Report.

If the 2008 Xinghua Audited Net Profit shall be lower than RMB27,000,000 (equivalent to approximately HK$30,820,000), no Xinghua Earn-out shall be paid. If the 2008 Xinghua Audited Net Profit shall be greater than RMB42,000,000 (equivalent to approximately HK$47,950,000), the maximum Xinghua Earn-out shall be RMB75,000,000 (equivalent to approximately HK$85,620,000). The Company will make further announcement if the Xinghua Earn-out has to be paid in accordance with the terms of the Xinghua Acquisition Agreement.

The Xinghua Consideration was negotiated between the parties on an arm’s length basis and was determined by reference to the unaudited net profit after tax of Xinghua of approximately RMB27,500,000 (equivalent to approximately HK$31,390,000) for the eight months ended 31 August 2008. The Directors consider that the Xinghua Consideration is fair and reasonable and is in the interest of the Shareholders as a whole.

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LETTER FROM THE BOARD

Xinghua Completion

Xinghua Completion shall take place on the third business day after the registration of the relevant changes of Xinghua at the relevant authorities in the PRC being duly completed (or such other date as the parties may agree in writing).

INFORMATION OF XINGHUA

Xinghua is a company established in the PRC by Shao Jufang and Xie Fadi in 2006. It is principally engaged in the manufacture and sale of rare earth products. As at the Latest Practicable Date, the registered capital of Xinghua was RMB20,000,000 (equivalent to approximately HK$22,830,000).

The audited net profit both before and after taxation of Xinghua for the period from 22 May 2006 (the incorporation date of Xinghua) to 31 December 2006 and from 1 January 2007 to 31 December 2007 were both RMB0 (equivalent to HK$0) in accordance with China’s Auditing Standards for the Certified Public Accountants. Based on the management accounts of Xinghua for the eight months ended 31 August 2008, the unaudited net profit of Xinghua before and after taxation amounted to approximately RMB36,700,000 (equivalent to approximately HK$41,890,000) and approximately RMB27,500,000 (equivalent to approximately HK$31,390,000) respectively and the unaudited net asset value of Xinghua as at 31 August 2008 amounted to approximately RMB47,500,000 (equivalent to approximately HK$54,220,000).

REASONS FOR THE XINGHUA ACQUISITION

The Group is principally engaged in the manufacture and sale of rare earth products and refractory products in the PRC. Since the principal business activities of Xinghua are in line with those of the Group, it is expected that the Xinghua Acquisition will enhance the Group’s profitability and operation size. The Directors believe that the Xinghua Acquisition will contribute positively to the future development and growth of the Group through the broadening of the income base and asset base of the Group.

Having regard to the above factors, the Directors consider that the terms and conditions of the Xinghua Acquisition Agreement are fair and reasonable and that the Xinghua Acquisition is on normal commercial terms and is in the interest of the Shareholders as a whole.

DONGYE ACQUISITION AGREEMENT

Date

16 October 2008

Parties

Vendors: (i) Yan Yinhua, holding 51% of the beneficial interest in the Dongye Sale Interest; and

(ii) Lan Jingxian, holding 49% of the beneficial interest in the Dongye Sale Interest

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LETTER FROM THE BOARD

Purchaser: Yixing Xinwei

Save as the relationship between Lan Jingxian and the Xinghua Vendors as described in the paragraph headed “Information of Dongye” below, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Dongye Vendors and Dongye are third parties independent of the Company and connected persons of the Company. The Company does not have any transactions with the Dongye Vendors completed within 12 months prior to the Dongye Acquisition.

Interest to be acquired

Subject to the terms and conditions of the Dongye Acquisition Agreement, the Purchaser has conditionally agreed to acquire from the Dongye Vendors, and the Dongye Vendors have conditionally agreed to sell to the Purchaser, the Dongye Sale Interest, representing the entire registered capital of Dongye.

Dongye Consideration

The Dongye Consideration shall be the aggregate sum of the Dongye Basic Consideration (as defined below) and the Dongye Earn-out (as defined below) and shall be determined in the following manner:

1. Dongye Basic Consideration

The Dongye Basic Consideration shall be RMB100,000,000 (equivalent to approximately HK$114,160,000), of which RMB51,000,000 (equivalent to approximately HK$58,220,000) shall be paid to Yan Yinghua and RMB49,000,000 (equivalent to approximately HK$55,940,000) shall be paid to Lan Jingxian. The Dongye Basic Consideration shall be settled in cash by cheque or telegraphic transfer upon Dongye Completion.

2. Dongye Earn-out

If the 2008 Dongye Audited Net Profit shall be greater than RMB20,000,000 (equivalent to approximately HK$22,830,000), the Purchaser shall pay the Dongye Vendors (in accordance with each of the Dongye Vendors’ percentage interest in the registered capital of Dongye as at the date of the Dongye Acquisition Agreement) an earn-out as calculated by the following formula:

Dongye Earn-out = (2008 Dongye Audited Net Profit X 5) – Dongye Basic Consideration

The Dongye Earn-out calculated in accordance with the formula above, if any, shall be paid by the Purchaser to the Dongye Vendors in cash by cheque or by telegraphic transfer within 15 days after the date of issue of the 2008 Dongye Audited Report.

If the 2008 Dongye Audited Net Profit shall be lower than RMB20,000,000 (equivalent to approximately HK$22,830,000), no Dongye Earn-out shall be paid. If the 2008 Dongye Audited Net Profit shall be greater than RMB28,000,000 (equivalent to approximately HK$31,960,000), the maximum

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LETTER FROM THE BOARD

Dongye Earn-out shall be RMB40,000,000 (equivalent to approximately HK$45,660,000). The Company will make further announcement if the Dongye Earn-out has to be paid in accordance with the terms of the Dongye Acquisition Agreement.

The Dongye Consideration was negotiated between the parties on an arm’s length basis and was determined by reference to the unaudited net profit after tax of Dongye of approximately RMB20,700,000 (equivalent to approximately HK$23,630,000) for the eight months ended 31 August 2008. The Directors consider that the Dongye Consideration is fair and reasonable and is in the interest of the Shareholders as a whole.

Dongye Completion

Dongye Completion shall take place on the third business day after the registration of the relevant changes of Dongye at the relevant authorities in the PRC being duly completed (or such other date as the parties may agree in writing).

INFORMATION OF DONGYE

Dongye is a company established in the PRC in 2005 by Shao Jufang and Xie Fadi (the Xinghua Vendors) and is principally engaged in the manufacture and sale of rare earth products. In August 2008, each of Shao Jufang and Xie Fadi entered into an equity transfer agreement with Lan Jingxian in relation to the transfer of the then 100% equity interest in Dongye. Subsequent to such transfer, the registered capital of Dongye has been increased from RMB5,000,000 (equivalent to approximately HK$5,710,000) to RMB20,000,000 (equivalent to HK$22,830,000) and held by each of Lan Jingxian and Yan Yinhua as to 49% and 51% respectively. As at the Latest Practicable Date, the registered capital of Dongye was RMB20,000,000 (equivalent to approximately HK$22,830,000).

The audited net profit before and after taxation of Dongye were both RMB0 (equivalent to HK$0) for the year ended 31 December 2006 and the audited net profit before and after taxation of Dongye were approximately RMB11,200,000 (equivalent to approximately HK$12,790,000) and approximately RMB7,470,000 (equivalent to approximately HK$8,530,000) for the year ended 31 December 2007 respectively in accordance with China’s Auditing Standards for the Certified Public Accountants. Based on the management accounts of Dongye for the eight months ended 31 August 2008, the unaudited net profit of Dongye before and after taxation amounted to approximately RMB24,000,000 (equivalent to approximately HK$27,400,000) and approximately RMB20,700,000 (equivalent to approximately HK$23,630,000) respectively and the unaudited net asset value of Dongye as at 31 August 2008 amounted to approximately RMB48,200,000 (equivalent to approximately HK$55,020,000).

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LETTER FROM THE BOARD

REASONS FOR THE DONGYE ACQUISITION

The Group is principally engaged in the manufacture and sale of rare earth products and refractory products in the PRC. Since the principal business activities of Dongye are in line with those of the Group, it is expected that the Dongye Acquisition will enhance the Group’s profitability and operation size. The Directors believe that the Dongye Acquisition will contribute positively to the future development and growth of the Group through the broadening of the income base and asset base of the Group. Having regard to the above factors, the Directors consider that the terms and conditions of the Dongye Acquisition Agreement are fair and reasonable and that the Dongye Acquisition is on normal commercial terms and is in the interest of the Shareholders as a whole.

FINANCIAL EFFECTS OF THE XINGHUA AQUISITION AND THE DONGYE ACQUISITION

Upon Xinghua Completion and Dongye Completion, Xinghua and Dongye will become 95% owned subsidiaries of the Company respectively. The financial results of Xinghua and Dongye will be consolidated into the results of the Group. Therefore the earnings of the Group will increase as a result of the share of profits of each of Xinghua and Dongye. The Group’s assets and liabilities will increase as a result of the consolidation of the financial positions of Xinghua and Dongye with those of the Group and the cash position of the Group will be affected by the payment of the Xinghua Consideration and Dongye Consideration.

DISCLOSEABLE TRANSACTIONS

Each of the Xinghua Acquisition and the Dongye Acquisition constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendix to this circular.

Yours faithfully For and on behalf of the Board of

China Rare Earth Holdings Limited Jiang Quanlong Chairman

10

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 Group. 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. DISCLOSURE OF INTERESTS BY DIRECTORS

• (a) As at the Latest Practicable Date, the interests and short positions of each Director in the shares, underlying shares or, as the case may be, the equity interest and debentures of the Company or its associated corporations (within the meaning of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

1. Interest in shares of the Company

			% in the issued
Director	Nature of interest/		share capital of
	Capacity	Number of shares	the Company
Jiang Quanlong	Interest of spouse/	595,200,000	41.88%
	Interest of controlled	(Note)
	corporation
Qian Yuanying	Founder of a trust	595,200,000	41.88%
		(Note)
Huang Chunhua	Beneficial owner	2,268,000	0.16%

Note: These shares are held through YY Holdings Limited, the entire issued share capital of which is held by YYT Limited, the trustee of YY Trust, the discretionary object of which is a company wholly owned by Ms Qian Yuanying, the spouse of Mr Jiang Quanlong, and her children. Ms Qian Yuanying is a founder of YY Trust within the meaning under Part XV of the SFO. Mr Jiang Quanlong is the sole director of YY Holdings Limited.

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GENERAL INFORMATION

APPENDIX

2. Interests in shares, underlying shares or equity interests in associated corporations

• (a) Microtech Resources Limited

			% in the class of
			shares in the
			issued share
	Nature of interest/	Number and	capital of
Director	Capacity	class of shares	the Company
Jiang Quanlong	Beneficial owner	7,000,000 non-voting	70%
		deferred shares
Qian Yuanying	Beneficial owner	3,000,000 non-voting	30%
		deferred shares

• (b) Yixing Xinwei Leeshing Rare Earth Company Limited

	Nature of interest/
Director	Capacity	% equity interest
Jiang Quanlong	Interest of controlled	5%
	corporation

Note: The equity interest is held by Yixing Xinwei Group Co., Ltd., a PRC domestic enterprise 90% owned by Mr Jiang Quanlong, with the remaining 10% owned by his son. Mr Jiang is also the legal representative of the enterprise.

• (c) YY Holdings Limited

			% in the class of
			shares in the
			issued share
	Nature of interest/	Number and	capital of
Director	Capacity	class of shares	the Company
Qian Yuanying	Founder of a trust	1 ordinary share	100%
Qian Yuanying	Founder of a trust	25,000 preference	100%
		shares
Jiang Quanlong	Interest of controlled	1 ordinary share	100%
	corporation
Jiang Quanlong	Interest of controlled	25,000 preference	100%
	corporation	shares

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GENERAL INFORMATION

APPENDIX

Note: The entire issued share capital of which is held by YYT Limited, the trustee of YY Trust, the discretionary object of which is a company wholly owned by Ms Qian Yuanying, the spouse of Mr Jiang Quanlong, and her children. Ms Qian Yuanying is a founder of YY Trust within the meaning under Part XV of the SFO. Mr Jiang Quanlong is the sole director of YYT Limited.

• (b) Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interest and short positions in the shares, underlying shares or, as the case may be, the equity interest and debentures of the Company or its associated corporations (within the meaning of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

• (c) Directors’ service contracts

As at the Latest Practicable Date, none of the Directors had entered into or was proposing to enter into a service contract with the Company or any other members of the Group which is not determinable by the Company and any of its subsidiaries (excluding contracts expiring or determinable within one year without payment of compensation other than statutory compensation).

• (d) Competing interest

As at the Latest Practicable Date, none of the Directors was interested in any business, apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with that of the Group.

3. DISCLOSABLE INTEREST UNDER DIVISIONS 2 AND 3 OF PART XV OF THE SFO AND SUBSTANTIAL SHAREHOLDERS

• (a) So far as is known to the Directors, as at the Latest Practicable Date, the following persons (other than a Director or chief executive of the Company) had an interest or a short position in the shares and underlying shares in the Company and/or member(s) of the Enlarged Group which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

• YY Holdings Limited, the entire issued share capital of which is held by YYT Limited, was holding 595,200,000 shares of the Company, representing approximately 41.88% of the issued share capital of the Company as beneficial owner.

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GENERAL INFORMATION

APPENDIX

1. YYT Limited was deemed to be interested in 595,200,000 shares of the Company held by YY Holdings Limited the entire issued share capital of which is held by YYT Limited.

2. Martin Currie (Holdings) Limited was deemed to be interested in 107,675,000 shares of the Company, representing approximately 7.58% of the issued share capital of the Company through the interest of corporations controlled by it.

3. (b) Save as disclosed above, as at the Latest Practicable Date and so far as is known to the Directors, there was no other person (other than a Director or chief executive of the Company) who had an interest or short position in the shares or underlying shares in the Company (including interest in options, if any) which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or was directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings or, as the case may be, the registered capital of any other members of the Enlarged Group.

4. LITIGATION

As at the Latest Practicable Date, no member of the Enlarged Group was engaged in any litigation or arbitration of material importance nor there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against either any member of the Enlarged Group.

5. GENERAL

• (a) The registered office of the Company is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

• (b) The place of business of the Company in Hong Kong is 15th Floor, Club Lusitano, 16 Ice House Street, Central, Hong Kong.

• (c) The secretary and the qualified accountant of the Company is Mr Law Lap Tak, FCCA, CPA .

• (d) The branch share registrar of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (e) In the event of inconsistency, the English text of this circular shall prevail over the Chinese text.

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