Long Investment Corp — Proxy Solicitation & Information Statement 2005

Jan 19, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a 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 Golden 21 Investment Holdings Limited, you should at once hand this circular together with the form of proxy to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the transferee.

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

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GOLDEN 21 INVESTMENT HOLDINGS LIMITED

金豐 2 1 投資控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 2312)

PROPOSALS FOR CHANGE OF INVESTMENT POLICIES

AND CHANGE OF AUDITORS

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A notice convening an Extraordinary General Meeting of Golden 21 Investment Holdings Limited (the “Company”) to be held at Business Centre Meeting Room, PM/F, The Empire Hotel, 33 Hennessy Road, Wanchai, Hong Kong on Friday, 4 February 2005 at 9:30 a.m. is set out on pages 9 to 10 of this circular. Whether or not you intend to attend and vote at the meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s Hong Kong share registrar, Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

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19 January 2005

CONTENTS

Page Definitions .......................................................................................................................... 1 Letter from the Board Introduction ......................................................................................................... 3 Change of Investment Policies ............................................................................ 4 Reasons for the Proposed Change of Investment Policies .................................. 6 Change of Auditors.............................................................................................. 6 Extraordinary General Meeting ........................................................................... 7 Procedures for demanding a poll ......................................................................... 7 Recommendation ................................................................................................. 8 Miscellaneous ...................................................................................................... 8 Notice of Extraordinary General Meeting ...................................................................... 9

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DEFINITIONS

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

“Board” the board of Directors

“Articles” the Articles of Association of the Company

“Change of Auditors” the proposed appointment of Messrs. Grant Thornton as auditors of the Company to fill the casual vacancy arising from the resignation of E&Y upon the approval by the shareholders of the Company by an ordinary resolution at the EGM and to hold office until the conclusion of the next annual general meeting

“Change of Investment the proposed change of the Existing Investment Policies as set Policies” out on pages 30 and 31 of the Prospectus, details of which are set out in this circular

• “Company” Golden 21 Investment Holdings Limited, a company incorporated in Cayman Islands with limited liability and the shares of which are listed on the Stock Exchange

“Director(s)” the director(s) of the Company

“EGM” the extraordinary general meeting of the Company to be convened and held at Business Centre Meeting Room, PM/F, The Empire Hotel, 33 Hennessy Road, Wanchai, Hong Kong on Friday, 4 February 2005 at 9:30 a.m.

• “E&Y” Messrs. Ernst & Young

• “Existing Investment the existing investment policies as set out on pages 30 and 31 Policies” of the Prospectus

• “Group” the Company and its subsidiary

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

“Investment Manager” Golden Honour Assets Management Limited, who was appointed by the Company pursuant to the investment management agreement dated 7 October 2002

• “Prospectus” the prospectus of the Company dated 15 October 2002

“PRC” the People’s Republic of China

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DEFINITIONS

“Region” Asia Pacific region, mainly Greater China, member countries of Association of Southeast Asian Nations (including Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmanr, Philippines, Singapore, Thailand and Vietnam) and Japan “Shareholder(s)” or holder(s) of the Share(s) “Member(s)” “Stock Exchange” The Stock Exchange of Hong Kong Limited

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LETTER FROM THE BOARD

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GOLDEN 21 INVESTMENT HOLDINGS LIMITED 金豐 2 1 投資控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 2312)

Executive Directors: Mr. Chang Chu Fai, Johnson Francis Mr. Lim Siang Kai Mr. See Lee Seng, Reason

Independent Non-Executive Directors: Mr. Chung Koon Yan Mr. Yue Man Yiu, Matthew Mr. Zheng Weihe

Registered Office: Century Yard Cricket Square Hutchins Drive P.O. Box 2681GT George Town Grand Cayman Cayman Islands British West Indies

Principal Place of Business: Room 3308 Bank of America Tower 12 Harcourt Road Central Hong Kong 19 January 2005

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR CHANGE OF INVESTMENT POLICIES AND CHANGE OF AUDITORS

INTRODUCTION

On 29 December 2004, the Board announced the proposals for the Change of Investment Policies and the Change of Auditors.

The purpose of this circular is to provide the Shareholders with (a) further information on the proposals for the Change of Investment Policies and the Change of Auditors and (b) the notice of the EGM convened for the purpose of considering and, if thought fit, approving the necessary resolutions to implement such proposals.

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LETTER FROM THE BOARD

CHANGE OF INVESTMENT POLICIES

The Existing Investment Policies as set out on pages 30 and 31 of the Prospectus are as follows:-

• (i) the Company’s investments will normally be made in the form of equity or equity related securities and/or debt securities in listed and unlisted companies engaged in different industries including (but not limited to) information technology, manufacturing, life sciences and environmental services, telecommunications, infrastructure, pharmaceuticals and property sectors aiming at maintaining a balance in the Company’s exposure to different industries sectors in order to minimize the impact on the Company of any downturn in any particular sector;

• (ii) the Company may invest in other fields in which the Board believes that there are prospects of earnings growth and/or capital appreciation. In particular, the Company will seek to identify businesses or entities with a potential or record of profit growth, strong management, high levels of technical expertise and research and development capabilities as well as management commitment to the long-term growth of such companies;

• (iii) the Company may invest in companies or other entities which are considered by the Board and/or the Investment Manager as being special or in recovery situations on a case by case basis (e.g., the Company may invest in companies under restructuring or liquidation), which may have extensive growth in shorter period and provide attractive returns;

• (iv) approximately 45% of the Company’s assets will be invested in equity securities, convertible notes, preference shares, options, warrants or debt securities issued by listed companies and approximately 45% of the Company’s assets will be invested in those issued by unlisted companies in the Region; and approximately 10% of the Company’s assets will be maintained in cash or cash equivalents;

• (v) the Board and the Investment Manager will, where possible, seek to identify investments where there is a certain degree of synergy with other investee companies and where co-operation between such companies would be of mutual benefit to each other;

• (vi) the Company’s investments are intended to be held for short to medium term (i.e. less than one year to five years) capital appreciation. Subject to the foregoing, the Company will realise investments from time to time where to do so is in the opinion of the Board to be in the best interests of the Company or where the terms on which such realisation can be achieved are in the opinion of the Board to be particularly favourable to the Company;

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LETTER FROM THE BOARD

• (vii) before suitable investment projects are identified, the Company may seek to protect the capital value of the Company’s cash assets by placing the same in bank deposits in any currency, bonds, treasury securities issued by the government of the United States or the government of Hong Kong or their respective agencies or securities or other instruments denominated in any currency issued by various governments or international development agencies;

• (viii) before suitable investment projects are identified, the Company may enter into forward interest rate agreements, forward currency agreements, interest rates and bond futures contracts and interest rate swaps and purchase and write (sell) put or call options on interest rates and put or call options on futures on interest rates; and

• (ix) the Company will engage in transactions in options and futures which are traded on recognised securities or futures exchanges and will issue or purchase derivative financial products for hedging purpose only.

The investments portfolio of the Group as at 30 June 2004 consisted of approximately 18.0% in listed investments, 45.1% in unlisted investments in the Region and the remaining 36.9% in cash and cash equivalent and others.

In view of the current investment environment, there are many PRC companies seeking for listing and this offers pre-IPO investment opportunities with good growth potential. The Board would like to seek approval from the Shareholders to the proposed Change of Investment Policies, as proposed and recommended by the Investment Manager of the Group, by modifying the Existing Investment Policies as stated in items (iv) and (ix) above as follows:

• (1) “(iv) up to a maximum of 90% of the Group’s assets can be invested in:

• (a) equity securities, convertible notes, preference shares, options, warrants or debt securities issued by listed companies;

• (b) equity securities, convertible notes, preference shares, options, warrants or debt securities issued by unlisted companies in the Region; and

• (c) options and futures which are traded on recognized securities or futures exchanges for trading and hedging purposes.”

• (2) “(ix) a minimum of 10% of the Group’s assets will be maintained in cash or cash equivalents.”

Save as stated above, the other Existing Investment Policies as stated in the Prospectus will remain unchanged. The Board would also like to draw the Shareholder’s attention to the following risk factors relating to the proposed Change of Investment Policies:

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LETTER FROM THE BOARD

Liquidity Risk

The proposed change may bring about higher proportion of assets allocated to unlisted companies as suitable investment opportunities arise. As a result, there is an inherent risk of causing the overall portfolio less liquid because taking unlisted companies public or disposal of unlisted companies may take longer time to materialize. However, the potential liquidity risk is justified by the fact that investment in unlisted companies would normally generate higher returns.

Market Risk

The introduction of derivatives, options and futures as tools for trading purpose will increase the volatility of the performance of the portfolio. To mitigate such risk, no margins will be taken when dealing in futures. i.e. the full underlying contract value will be taken into account and such exposure will be limited to 10% of the Group’s net asset value.

REASONS FOR THE PROPOSED CHANGE OF INVESTMENT POLICIES

As stated in the Prospectus, the Existing Investment Policies will remain in force for a minimum period of three years from the date of the Prospectus, i.e. 15 October 2002, unless otherwise decided by the Shareholders by an ordinary resolution in a general meeting. The EGM shall be convened to approve the proposed Change of Investment Policies.

The Board also confirms that in spite of the proposed Change of Investment Policies, the Company will still comply with the relevant requirements under Chapter 21 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The Board considers that the proposed Change of Investment Policies will allow greater flexibility for the Group to capture investment opportunities in both listed and unlisted companies and to invest in futures and derivative products enable the Group to respond more effectively to the ever-changing investment environment so as to maximize the return of the Group’s investment portfolio.

CHANGE OF AUDITORS

E&Y resigned as auditors of the Group with effect from 7 December 2004. The Board advises that E&Y confirmed in their letter of resignation that there were no circumstances connected with their resignation which they considered should be brought to the attention of the members or creditors of the Company or its subsidiary.

Messrs. Grant Thornton will be appointed as auditors of the Company to fill the casual vacancy arising from the resignation of E&Y upon the approval by the shareholders of the Company by an ordinary resolution at the EGM and to hold office until the conclusion of the next annual general meeting.

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LETTER FROM THE BOARD

The Company was informed by E&Y that the reason for its resignation is due to the expansion of the business of E&Y to the PRC, which result in the need for E&Y to allocate more of its human resources to the PRC from Hong Kong. The Board also confirms that there is no disagreement between the Board and E&Y and there are no circumstances in respect of the proposed Change of Auditors which it considers should be brought to the attention of the shareholders of the Company. E&Y has not commenced audit works for the financial year ended 31 December 2004. The Board expects that the proposed Change of Auditors will not affect the audit and the release of the annual results for the financial year ended 31 December 2004.

EXTRAORDINARY GENERAL MEETING

Set out on pages 9 to 10 of this circular is a notice convening the EGM to consider and, if appropriate, to approve the ordinary resolutions relating to the proposals for the Change of Investment Policies and the Change of Auditors.

A form of proxy for use at the EGM is enclosed herewith. If you are not able to attend and/or vote at the EGM in person, you are requested to complete the form of proxy and return it to the Company’s share registrar in Hong Kong, Tengis Limited, Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding of the EGM. Completion and returning of a form of proxy will not preclude you from attending and voting at the EGM or any adjourned meetings if you so wish.

PROCEDURES FOR DEMANDING A POLL

Pursuant to Article 66 of the Company’s Articles of Association, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (i) by the chairman of such meeting; or

• (ii) by at least three Members present in person or in the case of a Member being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or

• (iii) by any Member or Members present in person or in the case of a Member being a corporation by its duly authorized representative or by proxy and representing not less than one-tenth of the total voting rights of all Members having the right to vote at the meeting; or

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LETTER FROM THE BOARD

• (iv) by a Member or Members present in person or in the case of a Member being a corporation by its duly authorized representative or by proxy and holding Shares in the Company conferring a right to vote at the meeting being Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all Shares conferring that right.

A demand by a person as proxy for a Member or in the case of a Member being a corporation by its duly authorized representative shall be deemed to be the same as a demand by a Member.

RECOMMENDATION

Having considered the reasons set out herein, the Directors consider that the proposed ordinary resolutions for the Change of Investment Policies and the Change of Auditors are in the best interest of the Company and accordingly, recommend all Shareholders to vote in favour of such ordinary resolutions at the EGM.

MISCELLANEOUS

The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

Yours faithfully, For and on behalf of the Board Golden 21 Investment Holdings Limited Chang Chu Fai, Johnson Francis Executive Director

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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GOLDEN 21 INVESTMENT HOLDINGS LIMITED

金豐 2 1 投資控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 2312)

NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of Golden 21 Investment Holdings Limited (the “Company”) will be held at Business Centre Meeting Room, PM/F, The Empire Hotel, 33 Hennessy Road, Wanchai, Hong Kong on Friday, 4 February 2005 at 9:30 a.m. to consider and, if thought fit, pass with or without modifications, the following resolutions as Ordinary Resolutions:-

1. “ THAT:

• (1) the investment policies of the Company as set out in items (iv) and (ix) on pages 30 and 31 of the Prospectus of the Company dated 15 October 2002 be and are hereby revoked and replaced by the adoption of the following new investment policies:

  • (i) “(iv) up to a maximum of 90% of the Group’s assets can be invested in:

    • (a) equity securities, convertible notes, preference shares, options, warrants or debt securities issued by listed companies;

    • (b) equity securities, convertible notes, preference shares, options, warrants or debt securities issued by unlisted companies in the Region; and

  • (c) options and futures which are traded on recognized securities or futures exchanges for trading and hedging purposes.”

  • (ii) “(ix) a minimum of 10% of the Group’s assets will be maintained in cash or cash equivalents.”

• (2) save as varied above, the other existing investment policies as set out on pages 30 and 31 of the Prospectus of the Company dated 15 October 2002 remain unchanged and valid.”

• “ THAT Messrs. Grant Thornton be hereby appointed auditors of the Company to fill the casual vacancy created by the resignation of Messrs. Ernst & Young and to hold office until the conclusion of the next annual general meeting and that the board of directors of the Company be authorized to fix their remuneration.”

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NOTICE OF EXTRAORDINARY GENERAL MEETING

For and on behalf of the Board Golden 21 Investment Holdings Limited Tse Kam Fai Company Secretary

Hong Kong, 19 January 2005

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or, if he is the holder of two or more shares, more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. In the case of joint holders of shares in the Company, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holder(s), seniority being determined by the order in which names stand in the register of members.

3. In order to be valid, the form of proxy must be in writing under the hand of the appointor or of his attorney duly authorized in writing, or if the appointor is a corporation, either under seal, or under the hand of an officer or attorney or other person duly authorized, and must be deposited with the Hong Kong share registrars of the Company, Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong (together with the power of attorney or other authority, if any, under which it is signed or a certified copy thereof) not less than 48 hours before the time fixed for holding of the Meeting.

4. As at the date of this notice, the executive directors of the Company are Messrs. Chang Chu Fai, Johnson Francis, Lim Siang Kai and See Lee Seng, Reason, and the independent non-executive directors of the Company are Messrs. Chung Koon Yan, Yue Man Yiu, Matthew and Zheng Weihe.

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