Kingwell Group Limited — Share Issue/Capital Change 2000

Aug 28, 2000

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 howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe shares in the Company.

FT HOLDINGS INTERNATIONAL LIMITED

精 藝 集 團 國 際 有 限 公 司*

(Incorporated in Bermuda with limited liability)

SHARE TRANSACTION

FT Strategic, an indirect wholly owned subsidiary of the Company has entered into the Acquisition Agreement to acquire 28.6% of the issued share capital of Billion Wealth for the consideration of HK$10,000,000 to be satisfied by the issue of 15,000,000 shares of HK$0.1 each in the share capital of the Company.

FT Strategic has at the same time entered into the Joint Venture and Shareholders Agreement with Net Guard which holds 22.4% of the issued share capital of Billion Wealth whereby after completion of the Acquisition Agreement, FT Strategic and Net Guard will transfer their respective 28.6% and 22.4% shareholdings in Billion Wealth to FT Communications in exchange for shares in FT Communications. Following the transfer, FT Communications will hold 51% of the issued share capital of Billion Wealth and FT Strategic and Net Guard will respectively hold 56.08% and 43.92% of the issued share capital of FT Communications.

Conditional upon completion of the Acquisition Agreement, the Company and FT Strategic have jointly and severally undertaken to Billion Wealth to advance to Billion Wealth from time to time loans to meet the funding requirements of Billion Wealth to the aggregate extent of HK$13,000,000. Interests shall be charged on the loans at the rate of 2% above the best lending rate of The Hongkong and Shanghai Banking Corporation Limited and the loans shall be repaid on or before 24th August, 2002.

Trading in the shares of the Company was suspended at 2:30 p.m. on 25th August, 2000 at the request of the Company and application has been made to the Exchange for resumption of trading in the shares of the Company with effect from 10:00 a.m. on 28th August, 2000.

ACQUISITION AGREEMENT DATED 25TH AUGUST, 2000

Parties :

1. FT Strategic, an indirect wholly owned subsidiary of the Company, as purchaser;

2. Madam Wong who holds 28.6% of the issued share capital of Billion Wealth, as vendor;

3. Billion Wealth which holds 93.4% of the issued share capital of Trendex. Trendex has established a sino-foreign equity joint venture company in Shenzhen, People's Republic of China with Shenzhen Yong Hua Electronic System Company Limited ( 深圳市永華電子系統*-份有限公司 ) under the name of Guangdong Yong Hua New Electronic Network Investment Co., Ltd. (廣東永華新電子網絡發展有限公司) ("Guangdong Yong Hua"). Trendex holds 75% of the registered capital of Guangdong Yong Hua; and

4. Trendex

Madam Wong, Billion Wealth and Trendex are parties independent of and not connected with the Company and its subsidiaries as well as the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined in the Listing Rules).

Acquisition of shares in Billion Wealth

Under the Acquisition Agreement, FT Strategic agrees to acquire 28.6% of the issued share capital of Billion Wealth from Madam Wong, after arms length negotiation, for the consideration of HK$10,000,000 to be satisfied by the issue of 15,000,000 shares of HK$0.1 each in the share capital of the Company at an issue price of approximately HK$0.667 per share, representing approximately a 5.9% premium on the last closing price of the shares (HK$0.63) and approximately a 23.3% premium on the last 10 days' average closing price of the shares (approximately). The consideration shares will be issued pursuant to the authority under the general mandate granted to the directors of the Company at the annual general meeting of the Company held on 15th June, 2000.

The consideration shares represent approximately 5.43% of the existing issued share capital of the Company and approximately 5.15% of the then issued share capital of the Company as enlarged by the issue of the consideration shares.

Completion

The Acquisition Agreement will be completed on or before 15th September, 2000.

Issue of shares in the Company

Application will be made by the Company to the Exchange for listing of and permission to deal in the said 15,000,000 shares in the Exchange.

Business of Guangdong Yong Hua

Guangdong Yong Hua is engaged in the provision of motor car monitoring network and system and sale of related equipment in the People's Republic of China. Guangdong Yong Hua has a registered capital of RMB66,666,600.

Through the proposed acquisition, the Company expects to diversify its business scope and contribute to its financial performance.

JOINT VENTURE AND SHAREHOLDERS AGREEMENT DATED 25TH AUGUST, 2000

Parties :

1. FT Strategic;

2. Net Guard which holds 22.4% shareholdings in Billion Wealth; and

3. FT Communications which is formed specifically to hold the shares in Billion Wealth as hereinafter mentioned.

Net Guard is a party independent of and not connected with the Company and its subsidiaries as well as the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined in the Listing Rules).

Transfer of shares in Billion Wealth to FT Communications

After completion of the Acquisition Agreement, FT Strategic and Net Guard will transfer their respective 28.6% and 22.4% shareholdings in Billion Wealth to FT Communications in exchange for shares in FT Communications. Following the transfer, FT Communications will hold 51% of the issued share capital of Billion Wealth and FT Strategic and Net Guard will respectively hold 56.08% and 43.92% of the issued share capital of FT Communications.

UNDERTAKING DATED 25TH AUGUST, 2000

Parties :

FT Strategic, Net Guard, Bestbuy (a company wholly owned by Madam Wong), the Company, Net Guard Guarantor, Madam Wong and Billion Wealth.

Undertaking to make advances to Billion Wealth

Conditional upon completion of the Acquisition Agreement, the Company and FT Strategic have jointly and severally undertaken to Billion Wealth to advance to Billion Wealth from time to time loans to meet the funding requirements of Billion Wealth to the aggregate extent of HK$13,000,000. Interests shall be charged on the loans at the rate of 2% above the best lending rate of The Hongkong and Shanghai Banking Corporation Limited and the loans shall be repaid on or before 24th August, 2002.

Net Guard Guarantor is the beneficial owner of Net Guard. Each of Net Guard, Bestbuy, Net Guard Guarantor, Madam Wong and Billion Wealth is party independent of the Company and its subsidiaries as well as the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined in the Listing Rules).

SUSPENSION AND RESUMPTION OF TRADING IN SHARES OF THE COMPANY

Trading in the shares of the Company was suspended at 2:30 p.m. on 25th August, 2000 at the request of the Company pending the release of this announcement and application has been made to the Exchange for resumption of trading in the shares of the Company with effect from 10:00 a.m. on 28th August, 2000.

DEFINITION

In this announcement :-

"Acquisition Agreement" means a sale and purchase agreement of shares in Billion Wealth dated 25th August, 2000;

"Bestbuy" means Bestbuy Group Co., Ltd., a company wholly owned by Madam Wong, which holds 49% of the issued share capital of Billion Wealth and has entered into the Undertaking agreeing to make advances to Billion Wealth on the terms therein contained;

"Billion Wealth" means Billion Wealth Investment Limited;

"Company" means FT Holdings International Limited;

"Exchange" means The Stock Exchange of Hong Kong Ltd.;

"FT Communications" means FT Communications Limited, an international business company incorporated under the laws of British Virgin Islands;

"FT Strategic" means FT Strategic Investments Limited;

"Joint Venture and means a joint venture and shareholders

Shareholders Agreement" agreement between FT Strategic and Net Guard

for the transfer of all their shareholdings in Billion Wealth to FT Communications;

"Listing Rules" means the Rules Governing the Listing of Securities on The Stock Exchange Hong Kong Limited;

"Madam Wong" means Wong Miu Yee, Sally.

"Net Guard" means Net Guard Technology Limited;

"Net Guard Guarantor" means Mr. Yang Yiu Bon Eric Christopher;

"Trendex" means Trendex Technology Limited; and

"Undertaking" means the undertaking dated 25th August, 2000 between the shareholders of Billion Wealth and FT Strategic to make advances to Billion Wealth to meet the funding requirement of Billion Wealth.

By order of the board

FT Holdings International Limited

Lai Kam Wing, Jimmy

Chairman

Hong Kong, 25th August, 2000

*for identification purpose only