PegBio Co., Ltd. — Proxy Solicitation & Information Statement 2018

Aug 28, 2018

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 licensed securities dealer or other registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in CMBC Capital Holdings Limited you should at once hand this Circular and the accompanying form of proxy to the purchaser(s) or transferee(s) or to the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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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CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

(1) MAJOR AND CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE DEPOSIT SERVICES AGREEMENT AND (2) NOTICE OF SPECIAL GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed “Definitions” in this Circular. A letter from the Board is set out on pages 5 to 13 of this circular.

A notice convening the special general meeting of the Company to be held at Units 6601A & 6607-8, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong on Thursday, 20 September 2018 at 10:00 a.m. is set out at pages 34 to 35 of this circular.

Whether or not you are able to attend such meeting, please complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding such meeting (or adjourned meeting thereof as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the meeting (or adjourned meeting thereof as the case may be) should you so wish and in such event, the form of proxy shall be deemed to be revoked.

28 August 2018

CONTENT

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
**LETTER FROM **	THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . .	14
**LETTER FROM **	GRAM CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
APPENDIX I	– FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .	25
APPENDIX II	– GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .	28
NOTICE OF SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		34

– i –

DEFINITIONS

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

• “2018 Upper Limit Deposit Services”

• the Deposit Services with daily balance of the Group’s deposits (including any interest accrued therefrom) with CMBC HK Branch that exceeds HK$250 million to be provided during the year ending 31 December 2018 after obtaining Independent Shareholders’ approval in accordance with Chapter 14A of the Listing Rules

• “2019 Deposit Services”

• the Deposit Services to be provided during the year ending 31 December 2019

• “Announcement”

• the announcement of the Company dated 30 July 2018 in relation to the Deposit Services Agreement

• “associate(s)”

• has the meaning as ascribed to it under the Listing Rules

• “Board”

• the board of Directors

• “Business Day”

• means a day (other than a Saturday, Sunday or public holiday) on which licensed banks are generally open for business in Hong Kong and the PRC

• “China Minsheng”

• China Minsheng Banking Corp. Ltd. (中國民生銀行 股份有限公司), a joint stock limited company established in the PRC with limited liability, the H shares of which are listed on the Stock Exchange (stock code: 1988) and the A shares of which are listed on the Shanghai Stock Exchange (stock code: 600016)

• “Circular”

• this circular in relation to the Deposit Services Agreement issued by the Company in accordance with the Listing Rules

• “CMBC HK Branch”

• the Hong Kong branch of China Minsheng

– 1 –

DEFINITIONS

• “CMBC Investment”

• CMBC International Investment Limited (民銀國際 投資有限公司), a company incorporated in the British Virgin Islands wholly owned indirectly by China Minsheng, and a controlling shareholder of the Company

• “CMBCI”

• CMBC International Holdings Limited, a company incorporated in Hong Kong with limited liability

• “Company”

• CMBC Capital Holdings Limited, a company incorporated in Bermuda with limited liability and the issued Shares of which are listed on the Stock Exchange (stock code: 1141)

• “connected person(s)” has the meaning as ascribed to it under the Listing Rules

• “continuing connected has the meaning as ascribed to it under the Listing transaction” Rules

• “controlling shareholder(s)” has the meaning as ascribed to it under the Listing Rules

• “Deposit Services” cash deposit services including current deposit, time deposit, call deposit or agreement deposit services provided or proposed to be provided by CMBC HK Branch to the Group pursuant to the Deposit Services Agreement

• “Deposit Services Agreement” the deposit services agreement dated 30 July 2018 entered into between the Company (on behalf of the Group) and CMBC HK Branch

• “Directors” the directors of the Company

• “Group” the Company and its subsidiaries

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

– 2 –

DEFINITIONS

• “Independent Board Committee”

• “Gram Capital” or “Independent Financial Adviser”

• “Independent Shareholders”

• “Independent Third Party(ies)”

• “Latest Practicable Date”

• “Listing Rules”

• “PRC”

• the independent committee of the Board, comprising all the independent non-executive Directors, namely Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua, established to advise the Independent Shareholders in respect of the terms of the Deposit Services Agreement and the related proposed annual caps and the transactions contemplated thereunder

• Gram Capital Limited, a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO, being the independent financial adviser appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Deposit Services Agreement and the Transactions

• the Shareholders other than CMBC Investment and its associates

• any person(s) who is/are not connected person(s) of the Company

• 24 August 2018, being the latest practicable date prior to the printing of this Circular for ascertaining information contained herein

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as amended, supplemented or otherwise modified from time to time

• the People’s Republic of China and for the purpose of this Circular only, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

– 3 –

DEFINITIONS

“SGM” the special general meeting of the Company to be held at 10:00 a.m. on Thursday, 20 September 2018 at Units 6601A & 6607-8, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong, or any adjournment thereof, for the Shareholders to consider and, if thought fit, approve the Deposit Services Agreement and the transactions contemplated thereunder (including the related proposed annual caps) “Share(s)” ordinary share(s) of the Company “Shareholders” holders of Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “subsidiary” has the meaning ascribed to it under the Listing Rules “Transactions” the transactions contemplated under the Deposit Services Agreement “%” per cent.

– 4 –

LETTER FROM THE BOARD

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CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

Executive Directors: Mr. Li Jinze (Chairman) Mr. Ding Zhisuo Mr. Ng Hoi Kam

Non-executive Directors: Mr. Ren Hailong Mr. Liao Zhaohui

Independent non-executive Directors: Mr. Lee, Cheuk Yin Dannis Mr. Wu Bin Mr. Wang Lihua

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal place of business in Hong Kong: Units 6601A and 6607-6608 Level 66 International Commerce Centre 1 Austin Road West Kowloon Hong Kong 28 August 2018

To the Shareholders

Dear Sir or Madam,

(1) MAJOR AND CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE DEPOSIT SERVICES AGREEMENT AND (2) NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

References are made to the Announcement.

On 30 July 2018 (after trading hours), the Company, on behalf of the Group, entered into the Deposit Services Agreement with CMBC HK Branch, in relation to the provision of the Deposit Services by CMBC HK Branch to the Group, subject to the terms and conditions provided therein.

– 5 –

LETTER FROM THE BOARD

The purpose of this Circular, to which this letter forms a part of, is to provide you with, among other things: (i) further information regarding the Deposit Services Agreement; (ii) the recommendation of the Independent Board Committee; (iii) a letter of advice from Gram Capital; (iv) other information as required by the Listing Rules; and (v) the notice convening the SGM at which ordinary resolutions will be proposed to seek the Independent Shareholders’ approval for the Deposit Services Agreements and the relevant proposed annual caps.

MAJOR AND CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE DEPOSIT SERVICES AGREEMENT

The Deposit Services Agreement

Date

30 July 2018 (after trading hours)

Parties

• (i) Company; and

• (ii) CMBC HK Branch (as service provider)

CMBC HK Branch agrees to provide the Group with the Deposit Services subject to the terms and conditions provided in the Deposit Services Agreement. The Deposit Services will be provided on a non-exclusive basis and the Group may at its sole discretion to decide whether to accept any Deposit Services to be provided by CMBC HK Branch under the Deposit Services Agreement and shall not be restricted from placing and maintaining deposits with any Independent Third Party bank.

Term

The period commencing from 31 May 2017 to 31 December 2019

Basis of consideration

The interest rate to be paid by CMBC HK Branch for the Group’s deposits with CMBC HK Branch pursuant to the Deposit Services Agreement shall be determined based on the prevailing deposit interest rate promulgated by CMBC HK Branch for the same period and should not be lower than the deposit interest rates offered by major commercial banks in Hong Kong for comparable deposits of comparable periods.

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LETTER FROM THE BOARD

Annual caps and basis of determination for annual caps

Pursuant to the Deposit Services Agreement, the daily balance of the Group’s deposits (including any interest accrued therefrom) with CMBC HK Branch for the year ended 31 December 2017 and the years ending 31 December 2018 and 31 December 2019 shall not exceed HK$1,900,000,000, HK$1,900,000,000 and HK$1,900,000,000, respectively. The annual caps are determined after taking into account of (i) the historical daily balance of the Group with CMBC HK Branch in particular, the highest daily balance in 2017 and 2018 (as of 30 June 2018) were approximately HK$800,000,000 and HK$1,600,000,000 respectively, (ii) the size of the total assets of the Group which, as at 30 June 2018, was estimated to be approximately HK$9,500,000,000, (iii) the anticipated daily outstanding balance of deposits of the Group and (iv) the anticipated growth of the business of the Group. Prior to obtaining Independent Shareholders’ approval in accordance with Chapter 14A of the Listing Rules in respect of the Deposit Services Agreement, the Company confirms that the daily balance of the Group’s deposits (including any interest accrued therefrom) with CMBC HK Branch shall not exceed HK$250 million, of which the applicable percentage ratios are and would only be more than 0.1% but less than 5%.

Conditions Precedent

The taking effect of the transactions contemplated for the 2018 Upper Limit Deposit Services during the year ending 31 December 2018, and 2019 Deposit Services during the year ending 31 December 2019 are conditional upon (i) the Independent Shareholders’ approval, confirmation and ratification (where applicable and as appropriate) of the said transactions contemplated under the Deposit Services Agreement at the SGM of the Company and (ii) other relevant approvals as may be required for the same to take effect.

INTERNAL CONTROL AND RISK MANAGEMENT OF THE COMPANY

The followings will be adopted by the Company to ensure that the transactions contemplated under the Deposit Services Agreement are on normal commercial terms and in the interests of the Company and the Shareholders as a whole and in compliance with the Listing Rules:

• (a) the Group shall place or maintain any deposits under the Deposit Services Agreement on a non-exclusive basis. The Group will, on a regular basis, obtain quotations (setting out, among others, the applicable interest rates) from at least two of our other major commercial banks in Hong Kong who are Independent Third Parties of the Group to confirm the rate(s) offered by the CMBC HK Branch are not less favorable to the Group, and conduct assessment taking into account several factors, including without limitation external customers’ needs, efficiency of financial resources arrangement, daily operation needs and the expected cash flow before making its decision as to the bank with which the deposits are to be placed. In the event that the Group is aware the rates(s) offered by the CMBC HK Branch become less favorable to the Group, the Group shall arrange to transfer deposits from CMBC HK branch to other financial institutions who are Independent Third Parties of the Group within a reasonable period of time;

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LETTER FROM THE BOARD

• (b) the Group will monitor the maximum balance of the deposits placed and maintained with CMBC HK Branch under the Deposit Services Agreement on a daily basis to ensure that such balance does not exceed the relevant annual caps; where the balance is close to the annual cap, the Group will arrange for some of the deposit placed with CMBC HK Branch to be transferred to its bank accounts maintained with other financial institutions who are Independent Third Parties of the Group;

• (c) the Group will prepare a continuing connected transaction report (the “ CCT Report ”) once every six months on the deposits placed with CMBC HK Branch under the Deposit Services Agreement, which will be submitted to the Group’s audit committee for consideration. The content of the CCT Report will include, amongst others: (i) the aggregate balance and maximum daily balance of the said deposits during the relevant period; (ii) a summary and comparison of the interest rates and other relevant terms offered by CMBC HK Branch against the interest rates and other relevant terms offered by the Independent Third Parties banks from which the Group has obtained quotations or with which the Group has placed deposit(s) during the relevant reporting period; and (iii) the status of compliance with and utilisation of the relevant annual caps;

• (d) the Group’s audit committee will convene meetings at least twice a year to discuss and assess the continuing connected transactions conducted under the Deposit Services Agreement and other connected transactions(s) of the Group (if any);

• (e) the Company will engage its auditors to conduct an annual review of the continuing connected transactions conducted pursuant to the Deposit Services Agreement; and

• (f) the independent non-executive Directors will review the continuing connected transactions conducted pursuant to the Deposit Services Agreement on an annual basis and confirm in the annual reports of the Company for the years ending 31 December 2018 and 2019 whether such continuing connected transactions have been entered into on normal commercial terms or better, in the ordinary and usual course of business of the Group and in accordance with the Deposit Services Agreement on terms that are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

The Directors consider that the above internal control measures can ensure that the transactions contemplated under the Deposit Services Agreement will be conducted on normal commercial terms in a manner that is not prejudicial to the interests of the Company and its Shareholders.

– 8 –

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DEPOSIT SERVICES AGREEMENT

The Deposit Services Agreement is beneficial to the Group because it can facilitate the Group in enhancing the fund management. In particular, it will enable the Group to reduce the remittance time and accelerate cash flows. Further, due to the long-standing cooperation between CMBC HK Branch and the Group, both parties have developed an in-depth understanding of each other’s general business needs and are therefore able to provide higher quality services to meet the Group’s demands. The Directors (including all of the independent non-executive Directors) consider that the transactions contemplated under the Deposit Services Agreement are in the ordinary and usual course of business of the Company and on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole. As Mr. Li Jinze, Mr. Ding Zhisuo, Mr. Ng Hoi Kam, Mr. Ren Hailong and Mr. Liao Zhaohui, all being Directors, hold positions in China Minsheng and/or its associates, they have abstained from voting for the approval of the transactions under the Deposit Services Agreement at the Board meeting. Save for the above, no other Directors have any material interests in the Deposit Services Agreement or were otherwise required to evade or abstain from voting in respect of the relevant board resolutions.

INFORMATION OF CMBC HK BRANCH

CMBC HK Branch is the Hong Kong branch of China Minsheng, a controlling Shareholder, throught its wholly owned subsidiary CMBCI, indirectly holding approximately 59.47% Shares of the Company as at the Latest Practicable Date. China Minsheng is principally engaged in commercial and retail banking business providing corporate and personal banking, treasury business, finance leasing, asset management and other financial services.

INFORMATION OF THE GROUP

As at the Latest Practicable Date, the Group is principally engaged in securities business, investment and financing and asset management and advisory business.

LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, CMBC HK Branch is the Hong Kong branch of China Minsheng, which, through its wholly-owned subsidiary CMBCI, indirectly holds approximately 59.47% of the issued share capital of the Company. By virtue of this shareholding interest, China Minsheng is a controlling shareholder (as defined under the Listing Rules) of the Company and so a connected person of the Company. As a result, the Deposit Services contemplated under the Deposit Services Agreement constitute a continuing connected transaction for the Company under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratio in respect of the Deposit Services under the Deposit Services Agreement exceeds 25% but is less than 100% as defined by the Listing Rules, the Deposit Services constitute (i) a major transaction of the Company subject to the reporting, announcement and shareholders’ approval

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LETTER FROM THE BOARD

requirements under Chapter 14 of the Listing Rules; and (ii) continuing connected transactions of the Company subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

During the period from 31 May 2017 to 30 July 2018 (“ Relevant Period ”), CMBC HK Branch has provided certain Deposit Services to the Group with the maximum daily balance exceeding 5% of the applicable percentage ratio (the “ Respective Transactions ”). Due to an unintentional and inadvertent oversight, the Company did not make timely disclosure of the Respective Transactions and did not seek Independent Shareholders’ approval for the Respective Transactions as required under Chapter 14A of the Listing Rules. Such oversight came to the notice of the Board according to the Company’s recent review on whether the Deposit Services should be regarded as continuing connected transactions of the Group.

The Board took prompt actions to comply with the requirements of the Listing Rules by entering into the Deposit Services Agreement, publishing the Announcement and this Circular timely and as soon as practicable and seeking the Independent Shareholders for approval and ratification. The Board had also withdrawn certain amount of the Group’s deposits with CMBC HK Branch such that the daily balance of the Group’s deposits (including any interest accrued therefrom) with CMBC HK Branch does not exceed HK$250 million, where the applicable percentage ratios became and continue to be only more than 0.1% but less than 5%. In order to prevent similar incidents from occurring again, the Company has taken steps to strengthen its compliance procedures including a complete review of all transactions with connected persons of the Company.

The Directors consider that major and continuing connected transactions contemplated under the Deposit Services Agreement are in the ordinary and usual course of business of the Company and on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

ESTABLISHMENT OF THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee has been established to make recommendation to the Independent Shareholders regarding the Deposit Services Agreement and the transactions contemplated thereunder (including the related annual caps). Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua, being the independent non-executive Directors, have been appointed by the Board to serve as members of the Independent Board Committee. To the best of knowledge, information and belief of the Directors, no member of the Independent Board Committee has any material interest in the Transactions. A letter from the Independent Board Committee is set out on page 14 of this Circular.

Gram Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders regarding the Transactions. A letter from Gram Capital is set out on pages 15 to 24 of this Circular.

– 10 –

LETTER FROM THE BOARD

SGM

The SGM will be convened and held at 10:00 a.m. on Thursday, 20 September 2018 at Units 6601A & 6607-8, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong for the purpose of considering and, if thought fit, passing the resolutions set out in the notice of the SGM, which is set out on pages 34 to 35 of this Circular. Whether or not you are able or intend to attend and vote at the SGM in person, you are requested to complete and return the enclosed form of proxy to the Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. The completion and delivery of a form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish, and in such event, the instrument appointing a proxy will be deemed to be revoked.

Since CMBC Investment being a controlling shareholder of the Company holding 27,568,649,093 Shares, representing approximately 59.47% of the issued share capital of the Company as at the date of this Circular, is wholly owned indirectly by China Minsheng, CMBC Investment is treated to have a material interest in the Deposit Services. Accordingly, CMBC Investment and its associates are required to abstain from voting at the SGM in respect of the proposed resolution to approve the Deposit Services Agreement and transactions contemplated thereunder (including, among others, the related annual caps). Save as disclosed above, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no other Shareholder or any of its associates has a material interest in the Deposit Services Agreement and the transactions contemplated thereunder (including, among others, the related annual caps), therefore no other Shareholder would be required to abstain from voting on the relevant resolutions to be proposed at the SGM.

You can vote at the SGM if you are an Independent Shareholder on 20 September 2018, which is referred to in this Circular as the record date. You will find enclosed with this Circular the notice of the SGM (please refer to pages 34 to 35 in this Circular) and a form of proxy for use for the SGM.

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Therefore, all resolutions proposed at the SGM shall be voted by poll in accordance with the Listing Rules and the bye-laws of the Company. The results of the poll will be announced in accordance with Rule 13.39(5) of the Listing Rules after the conclusion of the SGM.

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LETTER FROM THE BOARD

CLOSURE OF REGISTER OF MEMBER

The SGM is scheduled to be held on Thursday, 20 September 2018. For determining the entitlement to attend and vote at the SGM, the register of members of the Company will be closed from Monday, 17 September 2018 to Thursday, 20 September 2018, both days inclusive, during which period no transfer of Shares will be registered. In order to be eligible to attend and vote at the SGM, unregistered holders of Shares should ensure that all the share transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Friday, 14 September 2018.

ACTION TO BE TAKEN

A form of proxy for use at the SGM is also enclosed. Whether or not you are able to attend and vote at the SGM, you are requested to read the notice and to complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the SGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM should you so wish and in such event, the form of proxy shall be deemed to be revoked.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee set out on page 14 of this Circular and the letter from Gram Capital set out on pages 15 to 24 of this Circular. The Independent Shareholders are advised to read the aforesaid letters before deciding as to how to vote on the resolutions regarding the Deposit Service Agreement and the Transactions. The Directors (except for Mr. Li Jinze, Mr. Ding Zhisuo, Mr. Ng Hoi Kam, Mr. Ren Hailong and Mr. Liao Zhaohui, who have a material interest in the Transactions and who have abstained from voting on the relevant board resolutions of the Company) consider that the Transactions are in the ordinary and usual course of business of the Company and on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (except for Mr. Li Jinze, Mr. Ding Zhisuo, Mr. Ng Hoi Kam, Mr. Ren Hailong and Mr. Liao Zhaohui, who have a material interest in the Transactions and who have abstained from voting on the relevant board resolutions of the Company) recommend all Independent Shareholders to vote in favour of the relevant resolution in relation thereof to be proposed at the SGM.

– 12 –

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this Circular.

Shareholders and potential investors of the Company should be aware that the Transactions are subject to certain conditions being satisfied, therefore the Transactions may or may not proceed. Accordingly, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

Your faithfully, By order of the Board CMBC Capital Holdings Limited Li Jinze Chairman

– 13 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

28 August 2018

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE DEPOSIT SERVICES AGREEMENT

We refer to the circular issued by the Company to its shareholders dated 28 August 2018 (the “ Circular ”) of which this letter forms part. Unless otherwise specified, terms defined in the Circular shall have the same meanings in this letter.

We have been appointed by the Board as members of the Independent Board Committee to advise the Independent Shareholders in respect of the terms of the Deposit Services Agreement and the Transactions, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the Circular. Gram Capital has been appointed as the independent financial adviser to advise the Independent Shareholders and us in respect of the terms of the Deposit Services Agreement and the Transactions. Details of Gram Capital’s advice and the principal factors and reasons they have taken into consideration in giving such advice are set out on pages 15 to 24 of the Circular. Your attention is also drawn to the Board Letter in the Circular and the additional information set out in the appendices thereto.

Having considered the terms of the Deposit Services Agreement and the Transactions, the advice of the Gram Capital and the principal factors and reasons taken into consideration by Gram Capital, we are of the opinion that the terms of the Deposit Services Agreement and the Transactions are in the ordinary and usual course of business of the Company and on normal commercial terms, and the terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole. We, therefore, recommend that you vote in favour of the resolution to be proposed at the SGM to approve the terms of the Deposit Services Agreement and the Transactions.

Yours faithfully, For and on behalf of

The Independent Board Committee of CMBC Capital Holdings Limited

Lee, Cheuk Yin Dannis

Lee, Cheuk Yin Dannis Wu Bin Wang Lihua Independent Independent Independent non-executive Director non-executive Director non-executive Director

– 14 –

LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Deposit Services for the purpose of inclusion in this circular.

Room 1209, 12/F. Nan Fung Tower 88 Connaught Road Central/ 173 Des Voeux Road Central Hong Kong

28 August 2018

• To: The independent board committee and the independent shareholders of CMBC Capital Holdings Limited

Dear Sir/Madam,

MAJOR AND CONTINUING CONNECTED TRANSACTION

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Deposit Services, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular dated 28 August 2018 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 30 July 2018 (after trading hours), the Company, on behalf of the Group, entered into the Deposit Services Agreement with CMBC HK Branch, in relation to the provision of the Deposit Services by CMBC HK Branch to the Group, subject to the terms and conditions provided therein.

With reference to the Board Letter, the Deposit Services constitute (i) a major transaction of the Company subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules; and (ii) a continuing connected transaction of the Company subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Independent Board Committee comprising Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Deposit Services are on normal commercial terms and are fair and reasonable so far

– 15 –

LETTER FROM GRAM CAPITAL

as the Independent Shareholders are concerned; (ii) whether the Deposit Services are in the interests of the Company and the Shareholders as a whole and in the ordinary and usual course of business of the Group; and (iii) how the Independent Shareholders should vote in respect of the resolution(s) to approve the Deposit Services (including the Annual Caps (as defined below)) and transactions contemplated thereunder at the SGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors’ representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning the Deposit Services. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, China Minsheng, CMBC HK Branch or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Deposit Services. Our opinion is

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LETTER FROM GRAM CAPITAL

necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Deposit Services, we have taken into consideration the following principal factors and reasons:

Information on the Group

With reference to the Board Letter, the Group is principally engaged in the securities business, investment and financing and asset management and advisory business.

Set out below are the audited consolidated financial information of the Group for the year ended 31 March 2017 and the nine months ended 31 December 2017 as extracted from the annual report of the Company for the financial period ended 31 December 2017 (the “ 2017 Annual Report ”):

	For the nine	For the
	months ended	year ended
	31 December	31 March
	2017	2017
	HK$’000	HK$’000
		(restated)
Revenue from continuing operation	165,180	83,705
Profit/(loss) for the period/year from
continuing operation	118,363	(1,048,037)

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LETTER FROM GRAM CAPITAL

		As at	As at
		31 December	31 March
		2017	2017
		HK$’000	HK$’000
Cash	and cash equivalents	616,902	207,979
Total	assets	5,314,847	1,735,276

Note: With reference to the announcement of the Company dated 14 July 2017, the financial year end date of the Company changed from 31 March to 31 December.

According to the above table, the Group recorded revenue from continuing operation of approximately HK$165.18 million for the nine months ended 31 December 2017, representing an increase of approximately 97.34% as compared to that for the year ended 31 March 2017. With reference to the 2017 Annual Report, such increase in revenue was mainly due to the contribution from the investment and financing segment and the asset management and advisory segment. The Group recorded a profit from continuing operation of approximately HK$118.36 million for the nine months ended 31 December 2017 as compared a loss of approximately HK$1.05 billion for the year ended 31 March 2017. With reference to the 2017 Annual Report, such turnaround in loss position was primarily attributed to the increase in revenue; net gains on investments at fair value through profit or loss; and the decrease in other losses arising from impairment and disposal of available-for-sales investments, change in fair value of contingent consideration and early settlement of promissory notes.

As at 31 December 2017, the Group had cash and cash equivalents, and total assets of approximately HK$616.90 million and HK$5.31 billion respectively.

Information on CMBC HK Branch

With reference to the Board Letter, CMBC HK Branch is the Hong Kong branch of China Minsheng, a controlling Shareholder as at the Latest Practicable Date. China Minsheng is principally engaged in commercial and retail banking business providing corporate and personal banking, treasury business, finance leasing, asset management and other financial services.

Reasons for and benefits of the Deposit Services Agreement

With reference to the 2017 Annual Report, the Group’s continuing operations are carried out in Hong Kong. With reference to the Board Letter, the Deposit Services Agreement is beneficial to the Group because it can facilitate the Group in enhancing fund management. In particular, it will enable the Group to reduce the remittance time and accelerate cash flows. As further advised by the Directors, due to the cooperation between CMBC HK Branch and the Group, both parties have developed an in-depth understanding of each other’s general business needs and are therefore able to provide higher quality services to meet the Group’s demand.

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LETTER FROM GRAM CAPITAL

Pursuant to Deposit Services Agreement, the interest rate to be paid by CMBC HK Branch for the Group’s deposits with CMBC HK Branch shall be determined based on the prevailing deposit interest rate promulgated by CMBC HK Branch for the same period and should not be lower than the deposit interest rates offered by major commercial banks in Hong Kong for comparable deposits of comparable periods. As such, the Directors consider the deposit arrangement will benefit the Company and Shareholders as a whole.

As further confirmed by the Directors, as the Deposit Services are entered into in the ordinary and usual course of business of the Group and the Group and its clients will place cash in CMBC HK Branch on a regular basis (subject to terms of the deposits), it would be costly and impractical to make regular disclosure of each of the relevant transactions and obtain the prior approval from the Independent Shareholders as required by the Listing Rules, if necessary. Accordingly, the Directors are of the view that the Deposit Services will be beneficial to the Company and the Shareholders as a whole.

Having considered the above, in particular (i) the Group’s continuing operations are carried out in Hong Kong; (ii) the Deposit Services can facilitate the Group in enhancing fund management; (iii) the interest rate to be paid by CMBC HK Branch for the Group’s deposit will be determined based on the prevailing deposit interest rate promulgated by CMBC HK Branch and compared against rates offered by major commercial banks in Hong Kong; and (iv) the Group and its clients will place cash in CMBC HK Branch on a regular basis (subject to terms of the deposits), we concur with the Directors that the Deposit Services are conducted in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole.

Principal terms of the Deposit Services Agreement

Date:

30 July 2018 (after trading hours)

Parties:

(i) the Company; and (ii) CMBC HK Branch (as service provider)

The transactions:

CMBC HK Branch agrees to provide the Group with the Deposit Services subject to the terms and conditions provided in the Deposit Services Agreement.

Term:

The period commencing from 31 May 2017 to 31 December 2019

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LETTER FROM GRAM CAPITAL

Basis of consideration:

The interest rate to be paid by CMBC HK Branch for the Group’s deposits with CMBC HK Branch pursuant to the Deposit Services Agreement shall be determined based on the prevailing deposit interest rate promulgated by CMBC HK Branch for the same period and should not be lower than the deposit interest rates offered by major commercial banks in Hong Kong for comparable deposits of comparable periods.

With reference to Board Letter, the Deposit Services will be provided on a non-exclusive basis and the Group may at its sole discretion to decide whether to accept any Deposit Services to be provided by CMBC HK Branch under the Deposit Services Agreement and shall not be restricted from placing and maintaining deposits with any Independent Third Party bank.

As mentioned the Board Letter, the Group will adopt certain internal control procedures in relation to the Deposit Services, details of which are set out in the section headed “INTERNAL CONTROL AND RISK MANAGEMENT OF THE COMPANY” of the Board Letter. Having considered, in particular, that

• (i) the Group will, on a regular basis, obtain quotations (setting out, among others, the applicable interest rates) from at least two of its other Independent Third Parties major commercial banks in Hong Kong to confirm the rate(s) offered by the CMBC HK Branch are not less favorable to the Group, and conduct assessment taking into account factors, including without limitation external customers’ needs, efficiency of financial resources arrangement, daily operation needs and the expected cash flow before making its decision as to the bank with which the deposits are to be placed;

• (ii) in the event that the Group is aware the rates(s) offered by the CMBC HK Branch become less favorable to the Group, the Group shall arrange to transfer deposits from CMBC HK branch to other financial institutions who are Independent Third Parties of the Group within a reasonable period of time;

• (iii) the Group will monitor the maximum balance of the deposits placed and maintained with CMBC HK Branch under the Deposit Services Agreement on a daily basis to ensure that such balance does not exceed the relevant annual caps;

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LETTER FROM GRAM CAPITAL

• (iv) the Group will prepare the CCT Report, which contains details of the Deposit Services and will be submitted to the Group’s audit committee for consideration, once every six months; and

• (v) the Company will engage its auditors to conduct an annual review of the Deposit Services,

we consider the effective implementation of the aforesaid internal control procedures would help to ensure fair pricing of the Deposit Services according to the pricing policy.

In light of that (i) pursuant to the Deposit Services Agreement, interest rate to be paid by CMBC HK Branch for the Group’s deposits shall be determined based on the prevailing deposit interest rate promulgated by CMBC HK Branch for the same period and should not be lower than the deposit interest rates offered by major commercial banks in Hong Kong for comparable deposits of comparable periods; and (ii) the Group will adopt certain internal control procedures to ensure fair pricing of the Deposit Services according to the pricing policy, we are of the view that the terms of the Deposit Services on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

Annual caps

Pursuant to the Deposit Services Agreement, the daily balance of the Group’s deposits (including any interest accrued therefrom) with CMBC HK Branch for the each of the three years ending 31 December 2019 shall not exceed HK$1,900,000,000 (the “ Annual Cap(s) ”).

With reference to the Board Letter, the Annual Caps are determined after taking into account of (i) the historical daily balance of the Group with CMBC HK Branch; (ii) the size of the total assets of the Group and the anticipated daily outstanding balance of deposits of the Group; and (iii) the anticipated growth of the business of the Group.

As advised by the Directors, the maximum daily balance of the Group’s deposits (including any interest accrued therefrom) with CMBC HK Branch during the year ended 31 December 2017 and the six months ended 30 June 2018 was approximately HK$1.66 billion (the “ Historical Maximum ”). The Historical Maximum represents approximately 87.37% of the Annual Caps for each of the three years ending 31 December 2019.

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LETTER FROM GRAM CAPITAL

To assess the possible demand for cash deposits of the Group, we also noted from the 2017 Annual Report the following current assets of the Group:

Accounts receivables Loans and advances (due within one year) Investments at fair value through profit or loss Cash and cash equivalents Total (the “Sum”)	As at 31 December 2017 (audited) HK$’000 827,121 1,212,426 1,330,479 616,902 3,986,928	As at 31 March 2017 (audited) HK$’000 698,057 Nil 379,107 207,979
		1,285,143

As illustrated in the table above, the Sum amounted to approximately HK$3.99 billion and HK$1.29 billion as at 31 December 2017 and 31 March 2017 respectively. The Annual Caps for each of the three years ending 31 December 2019 is within the range of Sum as at 31 December 2017 and 31 March 2017.

As mentioned above, the Annual Caps are determined after taking into account of, among others, the size of the total assets of the Group. The Group had total assets of approximately HK$5.31 billion as at 31 December 2017, and with reference to the Board Letter, the size of total assets of the Group was estimated to be approximately HK$9.5 billion as at 30 June 2018. The Annual Caps for each of the three years ending 31 December 2019 represent approximately 35.75% and 20% of the Group’s total assets as at 31 December 2017 and as at 30 June 2018. Although the Annual Caps are lower than the Group’s total assets as at 31 December 2017 and as at 30 June 2018, taking into account that the Deposit Services will be provided on a non-exclusive basis and the Group shall not be restricted from placing and maintaining deposits with any Independent Third Party bank, we consider the Annual Caps to be justifiable.

As advised by the Directors, it is difficult to forecast the Group’s total cash level for the two years ending 31 December 2019. Nevertheless, should there be any substantial increase in cash of the Group, the Group may opt to deposit larger portion of cash in commercial banks or re-comply with the applicable provisions of the Listing Rules governing continuing connected transaction to revise the Annual Caps for each of the two years ending 31 December 2019.

In light of the above, we consider the Annual Caps to be reasonable.

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LETTER FROM GRAM CAPITAL

Shareholders should note that as the Annual Caps are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2019, and they do not represent forecasts of cost to be incurred from the Deposit Services. Consequently, we express no opinion as to how closely the actual deposits to be placed under the Deposit Services will correspond with the Annual Caps.

Listing Rules implication

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.53 to 14A.59 of the Listing Rules pursuant to which (i) the maximum values of the Deposit Services must be restricted by the Annual Caps; (ii) the terms of the Deposit Services (including the Annual Caps) must be reviewed by the independent non-executive Directors annually; (iii) details of independent non-executive Directors’ annual review on the terms of the Deposit Services must be included in the Company’s subsequent published annual reports and financial accounts. Furthermore, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, among other things, whether anything has come to their attention that causes them to believe that the Deposit Services (i) have not been approved by the Board; (ii) were not entered into, in all material respects, in accordance with the relevant agreement governing the transactions; and (iii) have exceeded the Annual Caps. In the event that the total amounts of the Deposit Services are anticipated to exceed the Annual Caps, or that there is any proposed material amendment to the terms of the Deposit Services, as confirmed by the Directors, the Company shall comply with the applicable provisions of the Listing Rules governing continuing connected transaction.

Given the above stipulated requirements for continuing connected transactions pursuant to the Listing Rules, we are of the view that there are adequate measures in place to monitor the Deposit Services and thus the interest of the Independent Shareholders would be safeguarded.

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LETTER FROM GRAM CAPITAL

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Deposit Services are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the Deposit Services are conducted in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the SGM to approve the Deposit Services (including the Annual Caps) and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully, For and on behalf of Gram Capital Limited Graham Lam Managing Director

– 24 –

FINANCIAL INFORMATION

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

Details of the financial information of the Group for each of the years ended 31 March 2016 and 2017 and the nine months ended 31 December 2017 are disclosed in the annual reports of the Company for the years ended 31 March 2016 and 2017 and the nine months ended 31 December 2017, respectively. These annual reports are published on the website of the Stock Exchange (http://www.hkexnews.hk) and the website of the Company (http://www.cmbccap.com):

• annual report of the Company for the year ended 31 March 2016 published on 21 July 2016, pages 37 to 119;

• annual report of the Company for the year ended 31 March 2017 published on 28 June 2017, pages 54 to 145; and

• annual report of the Company for the nine months ended 31 December 2017 published on 27 April 2018, pages 68 to 179.

2. INDEBTEDNESS

As at the close of business on 30 June 2018, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this Circular, the Group had outstanding credit borrowings of approximately HK$7,286.9 million, details of which are as follows:

Borrowings:

Notes payable with nominal value of HK$150.0 million, unsecured and unguaranteed Bank loan from a branch of the ultimate holding company, unsecured and unguaranteed Loan from intermediate holding company, unsecured and unguaranteed Financial assets sold under repurchase agreements, secured and guaranteed Total	At 30 June 2018 HK$ million (unaudited) 148.8 494.3 5,739.2 904.6
	7,286.9

– 25 –

FINANCIAL INFORMATION

APPENDIX I

Pledged Assets

As at 30 June 2018, borrowings under financial assets sold under repurchase agreements are fully guaranteed by the Company and secured by the underlying assets that consist of certain of the Group’s financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income with total carrying amounts of HK$1,512.9 million.

Save as aforesaid, and apart from intra-group liabilities, at the close of business on 30 June, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this Circular, the Group did not have any other debt securities, any outstanding loan capital, any borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptances (other than normal trade bills) or other similar indebtedness, debentures, mortgages, charges, finance leases or hire purchase commitments, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

The Directors are of the opinion that, after taking into account of the Group’s internal resources, cash flow from operations and the present facilities available, the working capital available to the Group is sufficient for the Group’s requirements for at lease 12 months from the date of this Circular.

4. EFFECT OF THE DEPOSIT SERVICES AGREEMENT ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

As a result of the Deposit Services provided to the Group, it is expected that the Group’s assets will increase by the interest income received and there will not be any material financial effects on the Group’s liabilities. Given these financial effects, the Directors are of the view that there will be no significant adverse impact on the net asset value of the Group.

Since the interest income will be received by the Group for its deposits with CMBC HK Branch, the earnings of the Group will increase by an amount equivalent to such interest income deriving from such deposits. Given these financial effects, the Directors expect that there will be no significant adverse impact on the Group’s consolidated profit or loss account.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

During the nine months ended 31 December 2017, the Group’s revenue increased by 97.3% to approximately HK$165.2 million, compared to approximately HK$83.7 million in the previous financial year ended 31 March 2017. The Group had also achieved a net profit amounting to approximately HK$0.12 billion during the same period, compared to the net loss of approximately HK$1.04 billion for the year ended 31 March 2017.

– 26 –

APPENDIX I

FINANCIAL INFORMATION

Looking ahead, it is expected that in 2018 the global economic growth momentum will continue. However, it will be difficult to predict accurately the impact of the U.S. tax reform and the new foreign trade policies introduced by the U.S. government on the global economy, which to a large extent, are subject to the uncertainty of Trump’s administration. Of course, as the 19th National Congress of the Communist Party of China was successfully convened and new government officials had assumed office, it is expected that the Chinese government will continue to adhere to the principle of striving for steady progress and the concepts of new development. It is also expected that the Chinese government will focus on promoting high-quality development, implement intensive reform and opening, emphasize entrepreneurship and innovation, foster new momentum for economic growth and endeavor to protect and improve people’s livelihood.

6. MATERIAL ADVERSE CHANGE

The Directors confirm that they were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2017, being the date to which the latest published audited accounts of the Group were made up to, up to and including the Latest Practicable Date.

– 27 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this Circular misleading.

2. DISCLOSURE OF INTERESTS

Interest of Directors/chief executive of the Company

As at the Latest Practicable Date, none of the Directors nor chief executive of the Company or their respective associates had or was deemed to have any interest or short position in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV 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 they were taken or deemed to have under such provisions of the SFO) or which were required to be and were recorded in the register required to be kept by the Company under section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules.

Interest of substantial shareholders

As at the Latest Practicable Date, according to the register kept by the Company pursuant to Section 336 of the SFO and, so far as is known to the Directors or chief executive of the Company, the following shareholders (other than a Director or chief executive of the Company) had interests or short positions in the Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who 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 of any other member of the Group:

– 28 –

APPENDIX II

GENERAL INFORMATION

			Approximate
			total
		Number of	percentage
		shares of the	of interest in
Name	Nature of interest	Company	the Company
CMBC Investment	Beneficial owner	27,568,649,093	59.47%
China Minsheng	Interest of controlled	27,568,649,093	59.47%
	corporation
CMBCI	Interest of controlled	27,568,649,093	59.47%
	corporation

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the chief executive of the Company was aware of any other person, other than a Director or the chief executive of the Company, who had interests or short positions in the Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who 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 of any other member of the Group, or which was recorded in the register required to be kept by the Company pursuant to section 336 of the SFO.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into any service agreement with any member of the Group nor were there any other service agreements proposed which would not expire or be determinable by the member of the Group within one year without payment of compensation (other than statutory compensation).

As at the Latest Practicable Date, there was no service contract with the Company or any of its subsidiaries or associated companies in force for the Directors which: (i) (including both continuous and fixed term contracts) had been entered into or amended within 6 months before the date of the Announcement; (ii) was a continuous contract with a notice period of 12 months or more; or (iii) was a fixed term contract with more than 12 months to run irrespective of the notice period. There was no earlier service contract with the Company or any of its subsidiaries or associated companies for the Directors which had been replaced or amended within six months before the Latest Practicable Date.

– 29 –

GENERAL INFORMATION

APPENDIX II

4. DIRECTORS’ INTEREST IN ASSETS/CONTRACTS AND OTHER INTERESTS

Interests in assets

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been acquired or disposed of by, or leased to, or which were proposed to be acquired or disposed of by, or leased to, any member of the Group since 31 December 2017, being the date to which the latest published audited consolidated financial statements of the Company were made up.

Interests in contracts

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement subsisting and which was significant in relation to the business of the Group.

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or their respective close associates (as defined in the Listing Rules) had any interest in any business (apart from the Group’s business) which competes or is likely to compete, either directly or indirectly, with the businesses of the Group.

6. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the Group was engaged in any litigation or arbitration of material importance and, so far as the Directors were aware, there was no litigation or claim of material importance pending or threatened by or against the Company or any member of the Group.

7. EXPERT’S QUALIFICATIONS AND CONSENT

The following are qualifications of the expert who has given its opinion or advice which is included in this Circular:

Name Qualification Gram Capital Limited A licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO

– 30 –

APPENDIX II

GENERAL INFORMATION

As at the Latest Practicable Date, Gram Capital does not have any shareholding, directly or indirectly, in any member of the Group, nor did any of them have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor did it have any direct or indirect interest in any assets which have been acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2017, being the date to which the latest published audited financial statements of the Group were made up.

As at the Latest Practicable Date, Gram Capital has given its written consent and has not withdrawn its written consent to the issue of this Circular with the inclusion of its letters and/or reports and/or references to its name in the form and context in which they respectively appear.

8. MATERIAL CONTRACTS

The following material contracts, not being contracts entered into in the ordinary course of business of the Group, have been entered into by members of the Group within two years immediately preceding the Latest Practicable Date and are or may be material:

• (i) the China Soft Power Technology Holdings Limited (“ CSPT ”) disposal agreement dated 28 November 2016 in relation to (i) the disposal of one (1) share in the issued share capital of Sky Eagle Global Limited and (ii) the loan owing or incurred by Sky Eagle Global Limited to Gold Mission Limited to Celestial Lodge & Limited for an aggregate consideration of HK$227,000,000 and the CSPT supplemental agreement dated 7 March 2017 and entered into between the Celestial Lodge Limited and the Gold Mission Limited to amend certain terms of the CSPT disposal agreement;

• (ii) the conditional subscription agreement dated 7 March 2017 and entered into between the Company as issuer and the CMBC Investment and Brilliant Decent Limited as subscribers in relation to the subscription for a total of 26,950,000,000 new Shares issued by the Company;

• (iii) the acquisition agreement dated 27 July 2017 entered into between the Company and CMBCI for the entire issued share capital of CMBC Capital Finance Limited;

• (iv) the acquisition agreement dated 27 July 2017 entered into between the Company and CMBCI for the entire issued share capital of CMBC International Capital Limited;

– 31 –

APPENDIX II

GENERAL INFORMATION

• (v) a conditional placing agreement entered into between the Company and certain placing agents (CCB International Capital Limited, Haitong International Securities Company Limited, Zhongtai International Securities Limited and CMBC Securities Company Limited) dated 3 July 2018 in relation to the placing of up to 830,000,000 Shares;

• (vi) the conditional subscription agreement entered into between the Company and CMBC International Investment Limited dated 3 July 2018 in relation to the subscription of 1,350,000,000 Shares; and

• (vii) the Deposit Services Agreement.

9. DOCUMENTS FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m., at the principal place of the Company in Hong Kong at Units 6601A and 6607-6608, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong from the date of this Circular up to and including the date of the SGM (other than Saturdays, Sundays and public holidays):

• (a) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix;

• (b) the memorandum of association and the bye-laws of the Company;

• (c) the letter from the Board, the text of which is set out on pages 5 to 13 of this Circular;

• (d) the letter from the Independent Board Committee, the texts of which are set out on page 14 in this Circular;

• (e) the letter from Gram Capital to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 15 to 24 of this Circular;

• (f) the written consent referred to in the paragraph headed “Expert’s Qualifications and Consent” in this appendix;

• (g) the annual reports of the Company for the years ended 31 March 2016 and 2017, and the nine months ended 31 December 2017, respectively;

• (h) this Circular;

• (i) a circular of the Company dated 10 October 2017;

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GENERAL INFORMATION

APPENDIX II

• (j) a circular of the Company dated 21 October 2017;

• (k) a circular of the Company dated 25 May 2018; and

• (l) a circular of the Company dated 29 May 2018.

10. MISCELLANEOUS

• (a) The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

• (b) The company secretary of the Company is Mr. Dong Qizhen, a solicitor of qualified in Hong Kong.

• (c) The Company’s head office and principal place of business in Hong Kong is at Units 6601A and 6607-6608, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong.

• (d) The branch share registrar of the Company is, Tricor Tengis Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (e) The English texts of this Circular shall prevail over the Chinese texts.

– 33 –

NOTICE OF SGM

==> picture [218 x 43] intentionally omitted <==

CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “ SGM ”) of CMBC Capital Holdings Limited (the “ Company ”) will be held at Units 6601A & 6607-8, Level 66, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong on Thursday, 20 September 2018 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions. Words and expressions that are not expressly defined in this notice of SGM shall bear the same meaning as that defined in the circular to the shareholders of the Company dated 28 August 2018 (the “ Circular ”).

ORDINARY RESOLUTIONS

“ THAT :

• (a) the Deposit Services Agreement dated 30 July 2018 entered into between the Company and CMBC HK Branch in relation to the provision of the Deposit Services and the consummation of transactions contemplated thereunder (including the related proposed annual caps) as more particularly described in the Circular and on the terms and conditions set out in the Deposit Services Agreement be hereby approved, ratified and confirmed; and

• (b) authorization be granted to any one Director to complete and do all such acts or things (including executing all such documents, instruments and agreements as may be required) as the Company, such Director or, as the case may be, the Board may consider necessary, desirable or expedient or in the interest of the Company to give effect to the terms of the matters contemplated under the Deposit Services Agreement and all transactions contemplated thereunder and all other matters incidental thereto or in connection therewith.”

By order of the Board CMBC Capital Holdings Limited Li Jinze Chairman

Hong Kong, 28 August 2018

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NOTICE OF SGM

Registered Office: Principal place of business Clarendon House in Hong Kong: 2 Church Street Units 6601A and 6607-6608 Hamilton HM 11 Level 66 Bermuda International Commerce Centre 1 Austin Road West Kowloon Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the SGM is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him/her and vote on his/her behalf at the SGM. A proxy need not be a member of the Company. In addition, a proxy or proxies representing either a member of the Company who is an individual or a member of the Company which is a corporation is entitled to exercise the same powers on behalf of the member of the Company which he/she or they represent as such member of the Company could exercise.

2. The form of proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its common seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of a form of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such form of proxy on behalf of the corporation without further evidence of the fact.

3. For determining the entitlement to attend and vote at the SGM, the register of members of the Company will be closed from Monday, 17 September 2018 to Thursday, 20 September 2018, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the SGM, unregistered holders of shares should ensure that all the share transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Friday, 14 September 2018.

4. The form of proxy and (if required by the Board of Directors of the Company) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time fixed for holding the SGM or adjourned meeting thereof at which the person named in the form of proxy proposes to vote, and in default the form of proxy shall not be treated as valid.

5. Delivery of a form of proxy shall not preclude a member of the Company from attending and voting in person at the SGM convened and in such event, the form of proxy shall be deemed to be revoked.

6. Where there are joint holders of any share, any one of such joint holders may vote at the SGM, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders be present at the SGM the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

As at the date hereof, the executive Directors are Mr. Li Jinze, Mr. Ding Zhisuo and Mr. Ng Hoi Kam, the non-executive Directors are Mr. Ren Hailong and Mr. Liao Zhaohui, and the independent non-executive Directors are Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua.

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