Persistence Gold Group Ltd — Proxy Solicitation & Information Statement 2006

Mar 24, 2006

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 your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shanghai Merchants Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or 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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SHANGHAI MERCHANTS HOLDINGS LIMITED

*

(incorporated in Bermuda with limited liability)

(Stock Code: 1104)

PROPOSED CHANGE OF AUDITORS

AND

NOTICE OF SPECIAL GENERAL MEETING

A notice convening the special general meeting of Shanghai Merchants Holdings Limited to be held at Victoria Room 5, 3/F., Regal Hongkong Hotel of 88 Yee Wo Street, Causeway Bay, Hong Kong on Wednesday, 12th April, 2006 at 10:00 am or any adjournment thereof is set out on page 5 of this circular.

A form of proxy for use at the special general meeting of Shanghai Merchants Holdings Limited is enclosed with this circular. Whether or not you are able to attend and vote at the special general meeting, please complete and return the enclosed proxy form in accordance with the instructions printed thereon and return the same to the branch share registrar of Shanghai Merchants Holdings Limited in Hong Kong, Secretaries Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the special general meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting at the special general meeting or any adjournment thereof should you so wish.

* for identification purpose only

23rd March, 2006

DEFINITIONS

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

“Board”	the board of Directors
“Bye-Laws”	the existing bye-laws of the Company
“Change of Auditors”	the proposed appointment of Graham H. Y. Chan & Co.,
	Certified Public Accountants, as new auditors of the
	Company following the resignation of Deloitte, upon the
	passing of an ordinary resolution by the Shareholders at
	the SGM and to hold office until the conclusion of the
	next annual general meeting of the Company
“Company”	Shanghai Merchants Holdings Limited, a limited liability
	company incorporated in Bermuda, the shares of which
	are listed on The Stock Exchange of Hong Kong Limited
“Deloitte”	Deloitte Touche Tohmatsu
“Director(s)”	the director(s) of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“SGM”	the special general meeting of the Company to be
	convened and held at Victoria Room 5, 3/F., Regal
	Hongkong Hotel of 88 Yee Wo Street, Causeway Bay,
	Hong Kong on Wednesday, 12th April, 2006 at 10:00 am
	(or any adjournment thereof), the notice of which is set
	out on page 5 of this circular
“Share(s)”	ordinary shares of nominal value of HK$0.10 each in the
	capital of the Company
“Shareholder(s)”	holder(s) of the Shares(s)

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LETTER FROM THE BOARD

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SHANGHAI MERCHANTS HOLDINGS LIMITED

*

(incorporated in Bermuda with limited liability)

(Stock Code: 1104)

Executive Directors:

Mr. Yue Jialin (Chairman)

Mr. Lau Yau Cheung, Brent

Independent Non-Executive Directors:

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

Mr. Wong Wing Kuen, Albert

Mr. Tsui Robert Che Kwong

Mr. Wu Guo Jian

Head office and principal place of business in Hong Kong: Rooms 2808-10

28/F., Wing On House 71 Des Voeux Road Central Hong Kong

23rd March, 2006

To the Shareholders

Dear Sir or Madam,

PROPOSED CHANGE OF AUDITORS

Introduction

On 23rd March, 2006, the Board announced the proposal for the Change of Auditors.

The purposes of this circular are to provide the Shareholders with (i) information on the Change of Auditors; and (ii) the notice of the SGM to be convened and held for the purpose of considering and, if thought fit, approving the necessary resolution for the Change of Auditors.

* For identification purpose only

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LETTER FROM THE BOARD

Proposed Change of Auditors

As no consensus could be reached between the Company and its auditors, Deloitte, with regard to the audit fees, the Company proposed Graham H. Y. Chan & Co. to be appointed as the auditors of the Company, following the resignation of Deloitte on 22nd March, 2006, upon the passing of an ordinary resolution by the Shareholders at the SGM and to hold office until the conclusion of the next annual general meeting of the Company.

The Board confirms that there are no circumstances in respect of the Change of Auditors that it considers should be brought to the attention of the Shareholders. In the letter of resignation, Deloitte confirm that there are no circumstances or matters that need to be brought to the attention of the Shareholders in relation to their resignation.

It is expected that the change of auditors of the Company will not affect the audit and release of annual results of the Group for the financial year ended 31st December, 2005.

SGM

Set out on page 5 of this circular is a notice convening the SGM to consider and, if thought fit, to approve the ordinary resolution relating to the Change of Auditors.

A form of proxy for use at the SGM is enclosed herewith. Whether or not you are able to attend and vote at the SGM, please complete the enclosed form of proxy and return it to the Company’s branch share registrar in Hong Kong, Secretaries Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof if you so wish.

PROCEDURES FOR DEMANDING A POLL

Under the Bye-Laws, any resolution put to the vote at a general meeting of the Company shall be decided on a show of hands, unless voting by poll has been demanded before or on the declaration of the result of the show of hands or on the withdrawal of another demand for a poll to be taken.

Under the Bye-Laws, a poll may be properly demanded at a general meeting of the Company in one of the following manners:

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

• (b) by at least three Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

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LETTER FROM THE BOARD

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

• (d) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a corporation by its duly authorised 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.

RECOMMENDATION

The Board considers that the proposed ordinary resolution for the Change of Auditors is fair and reasonable and is in the best interest of the Company and accordingly, recommends the Shareholders to vote in favour of the ordinary resolution at the SGM.

By Order of the Board Shanghai Merchants Holdings Limited Yue Jialin Chairman

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NOTICE OF SGM

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SHANGHAI MERCHANTS HOLDINGS LIMITED

---

(incorporated in Bermuda with limited liability)

(Stock Code: 1104)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the special general meeting (the “Meeting”) of Shanghai Merchants Holdings Limited (the “Company”) will be held at Victoria Room 5, 3/F., Regal Hongkong Hotel of 88 Yee Wo Street, Causeway Bay, Hong Kong on Wednesday, 12th April, 2006 at 10:00 am for the purpose of considering and, if thought fit, passing, with or without modifications, the following as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT Graham H. Y. Chan & Co, Certified Public Accountants, be and is hereby appointed as auditors of the Company to fill the vacancy following the resignation of Deloitte Touche Tohmatsu, and to hold office until the conclusion of the next annual general meeting of the Company and that the board of directors of the Company be authorised to fix their remuneration.”

By Order of the Board Shanghai Merchants Holdings Limited Yue Jialin Chairman

Hong Kong, 23rd March, 2006

Registered office: Head office and principal place of business in Clarendon House Hong Kong: 2 Church Street Rooms 2808-10, 28/F., Hamilton HM11 Wing On House Bermuda 71 Des Voeux Road Central Hong Kong

Notes:

• (1) Any member of the Company entitled to attend and vote at the meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A proxy need not be a member of the Company. A member who is the holder of two or more shares of the Company may appoint more than one proxy to represent him to attend and vote on his behalf.

• (2) A form of proxy for use in connection with the special general meeting is enclosed with this circular. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of that power of attorney or authority must be deposited at the branch share registrars of the Company in Hong Kong, Secretaries Limited, 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

* For identification purpose only

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