Rego Interactive Co., Ltd — Proxy Solicitation & Information Statement 2002

Mar 1, 2002

	(a joint stock company incorporated in the People’s Republic of China with limited liability)

NOTICE OF ANNUAL GENERAL MEETING AND CLASS MEETING FOR HOLDERS OF
COMPANY’S DOMESTIC SHARES AND H SHARES FOR THE ISSUE OF
A SHARES CONVERTIBLE BONDS OF THE COMPANY

NOTICE IS HEREBY GIVEN that the tenth Annual General Meeting (“AGM”) of members and class meeting for holders of Company’s Domestic shares (“Domestic Shares class meeting”) and H shares, respectively (“H Shares class meeting”) for the issue of A shares convertible bonds of Tianjin Capital Environmental Protection Company Limited (the “Company”) will be held at 4/F., Conference Room, Tianjin Capital Environmental Protection Company Limited, 45 Guizhou Road, Heping District, Tianjin, the People’s Republic of China (the “PRC”) on 16th April, 2002 at 9:30 am, 11:00 am and 11:30 am, respectively for the purpose of passing the resolutions as listed below:

I. As ordinary resolutions:

1. To consider and approve the Annual Report of the Company for the year ended 31st December, 2001;

2. To consider and approve the Report of the Director of the Company for the year ended 31st December, 2001;

3. To consider and approve the Report of the Supervisory Committee 2001;

4. To review the Auditors’ Reports as submitted by PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd., Certified Public Accountants, PRC and PricewaterhouseCoopers, Certified Public Accountants, Hong Kong on the Financial Statements of the Company for 2001, and to consider and approve the Financial Statements of the Company, as respectively audited by the domestic and overseas certified public accountants;

5. To consider and approve the Financial Report of the Company for the year 2001 and Financial Budget for the year 2002;

6. To consider and approve the proposed distribution of profits of the Company for the year ended 31st December, 2001;

7. To consider and approve the re-appointment of PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd., Certified Public Accountants, PRC and PricewaterhouseCoopers, Certified Public Accountants, Hong Kong as the auditors of the Company for the year ending 31st December, 2002 and to authorize chairman of the board of directors of the Company to determine the terms for such appointment;

8. To consider and approve the rules governing the procedures for the shareholders’ general meeting of the Company. The Rules standardise the matters to be discussed in the shareholders’ general meeting, the procedures for convening extraordinary meeting and annual general meeting;

9. To consider and approve the application of Mr. Li Weibin and Mr. Guan Weili for the resignation as the independent non-executive directors, and to consider and approve the resolution concerning the nomination of Mr. Gao Zong Ze and Mr. Wang Xiang Fei for the independent directors (please refer to today’s announcement for relevant details);

10. To consider and approve the 2002 development plan of the Company, and to confirm or endorse the matters that the Board implements pursuant to the development plan;

11. To consider and approve the proposed scheme of remuneration for the directors;

II. As special resolutions:

1. To consider and approve the amendment of the Articles of Association of the Company (Annex 1).

2. To consider and approve of the proposal on the issue of A Shares Convertible Bonds of the Company (please refer to today’s announcement for relevant details):

(1) the major terms in respect of the proposal on the issue of A Shares Convertible Bonds including but not limited to the issue size, the arrangement for placing to the Company’s existing shareholders, use of proceeds, conversion price, the adjustment principle and the amendment to the conversion price;

(2) the feasibility study in respect of the use of proceeds from the issue of A Shares Convertible Bonds;

(3) the report on the use of proceeds from the previous fund raising exercise (note 7);

(4) authorizing the board of directors of the Company with full power to issue the A Shares Convertible Bonds and to implement all related matters in respect thereof;

(5) the validity period for the issue of A Shares Convertible Bonds;

1. To consider and approve the proposal to grant the mandate to the Board to allot and issue new Shares not exceeding 20% of existing H shares issued and outstanding (H Shares):

a) Subject to paragraphs c) and d), and pursuant to the Rules governing the listing of securities of Hong Kong Stock Exchange Limited (as amended from time to time) and the Company Law of the People’s Republic of China (“PRC”), the Directors of the Company are authorized to exercise all the rights of the Company, to allot and issue new Shares individually and collectively during the Relevant Period is generally and unconditionally approved, and the terms and conditions for the Directors to exercise their authority to determine the allotment and issue of new Shares include, inter alia:

(1) the number of new Shares to be issued;

(2) the Issue Price of the new Shares;

(3) the date for the commencement and closing of the issue;

(4) the number of new Shares to be issued to the existing shareholders; and

(5) to make or grant offer proposals, agreements and options as may be necessary in the exercise of such powers.

b) To make or grant offer proposals, agreements and options to the Directors of the Company as required or may be required in the exercise of such powers during the Relevant Period as referred to in paragraph a) or after the expiry of the Relevant Period.

c) The total nominal amount of overseas listed foreign shares (other than those issued under the PRC Company Law and the Articles of Association of the Company (the “Articles of Association”) by the capitalisation of the statutory public welfare funds) agreed to allot or conditionally or unconditionally agreed to allot by the Directors of the Company pursuant to paragraph a) (whether pursuant to the exercise of options or otherwise) shall not exceed 20% of the overseas listed foreign shares of the Company existing in issue.

d) Upon the exercise of the powers pursuant to paragraph a) above, the Directors of the Company shall

(1) comply with the PRC Company Law and the Rules governing the listing of securities of Hong Kong Stock Exchange Limited (as amended from time to time) and

(2) obtain the approval from China Securities Regulatory Commission.

e) For the purpose of this resolution:

“Relevant Period” refers to the period from the date of the passing of this resolution to the earliest of following three:

(1) twelve months after the passing of this resolution;

(2) conclusion of the forthcoming annual general meeting of the Company; and

(3) the date of the passing of a special resolution to revoke or amend the mandate as referred to in this resolution by shareholders in shareholders general meeting.

f) Subject to the approval by the relevant authorities of the PRC and pursuant to the PRC Company Law, the Directors of the Company is authorized to increase the registered capital of the Company to the required amount respectively when exercising the powers under paragraph a) above.

g) Subject to the approval by the relevant authorities of the PRC, the Board of Directors is authorized to make appropriate and necessary amendments to the Articles of Association, so as to reflect the changes in the capital of the Company that may have arisen under this mandate.

III. Resolutions to be passed at the Class Meeting for holders of Company’s H Shares

To consider and approve the proposal on the issue of A Shares Convertible Bonds of the Company (please refer to today’s announcement for relevant details).

(1) the major terms in respect of the proposal on the issue of A Shares Convertible Bonds including but not limited to the issue size, arrangement for placing to the Company’s existing shareholders, use of proceeds, conversion price, the adjustment principle and the amendment to the conversion price;

(2) the feasibility study in respect of the use of proceeds from the issue of A Shares Convertible Bonds;

(3) the report on the use of proceeds from the previous fund raising exercise (note 7);

(4) authorizing the board of directors of the Company with full power to issue the A Shares Convertible Bonds and to implement all related matters in respect thereof;

(5) the validity period for the issue of A Shares Convertible Bonds;

IV. Resolutions to be passed at the class meeting for holders of Company’s Domestic Shares

To consider and approve the proposal on the issue of A Shares Convertible Bonds of the Company (please refer to today’s announcement for relevant details).

(1) the major terms in respect of the proposal on the issue of A Shares Convertible Bonds including but not limited to the issue size, arrangement for placing to the Company’s existing shareholders, use of proceeds, conversion price, the adjustment principle and the amendment to the conversion price;

(2) the feasibility study in respect of the use of proceeds from the issue of A Shares Convertible Bonds;

(3) the report on the use of proceeds from the previous fund raising exercise (note 7);

(4) authorizing the board of directors of the Company with full power to issue the A Shares Convertible Bonds and to implement all related matters in respect thereof;

(5) the validity period for the issue of A Shares Convertible Bonds;

V. Other business

		By order of the Board
		Fu Yana	Ip Pui Sum
		Company Secretaries

Tianjin, the PRC

28th February, 2002

Legal address of the Company:		No. 18 Jinlong Apartment Shuishang Park North Road Nankai District Tianjin, The PRC
Telephone:	(8622)-23523036
Facsimile:	(8622)-23523100

Notes:

1. The register of members of the Company’s H Shares will be closed from 15th March, 2002 to 16th April, 2002, both days inclusive, for the purpose of determining a Shareholder’s List for the AGM and the H Shares class meeting. The last lodgement for share transfer must be made on 14th March, 2002 at Hong Kong Registrars Limited by or before 4:00 pm;

2. Each Shareholder having the rights to attend and vote at the AGM and/or the Domestic Shares class meeting and/or the H Shares class meeting is entitled to appoint one or more proxies (whether a Shareholder or not) to attend and vote on his behalf. Should more than one proxy be appointed by one Shareholder, such proxy shall only exercise his voting rights on a poll.

3. Shareholders can appoint a proxy by an instrument in writing (i.e. by using the Proxy Form enclosed). The Proxy Form shall be signed by the person appointing the proxy or an attorney authorised by such person in writing. If the Proxy Form is signed by an attorney, the power of attorney or other documents of authorisation shall be notarially certified. To be valid, the Proxy Form and the notarially certified power of attorney or other documents of authorisation must be delivered to the above legal address of the Company in not less than 24 hours before the time scheduled for the holding of the AGM and/or the Domestic Shares class meeting and/or the H Shares class meeting.

4. Shareholders or proxies who intend to attend the AGM and/or the Domestic Shares class meeting and/or the H Shares class meeting are asked to send the reply slip for attendance duly completed and signed to the Secretarial Office on or before 26th March, 2001 in person, by post or by fax. Please use the Proxy Form or its duplicate in writing.

5. Shareholders or their proxies shall present proofs of their identities upon attending the AGM and/or the Domestic Shares class meeting and/or the H Shares class meeting. Should a proxy be appointed, the proxy shall also present the Proxy Form.

6. The AGM and the Domestic Shares class meeting and the H Shares class meeting are expected to last for about half a day. The shareholders and proxies attending the AGM and/or the Domestic Shares class meeting and/or the H Shares class meeting shall be responsible for their own travelling and accommodation expenses.

7. After the asset restructuring, which was approved by the shareholders of the Company in the extraordinary meeting held on 20th December, 2000, all the existing assets of the Company are not related to the funds raised previously and the use of such funds is not relevant to the existing operation of the Company. As such, the PRC accountants of the Company are unable to produce a report on the use of funds raised previously.

Annex 1 Proposal for the amendment of the articles of association

In accordance with the relevant requirements of the governance of listed companies published and enacted by the China Securities Regulatory Commission and the State Economic and Trade Commission jointly on 7th January 2002, the Company proposes to amend and supplement the relevant sections of the Articles of Association, so as to further govern its operation and to enhance the corporate governance of the enterprises legal person, and to reflect the content of the Guidance Opinion for the establishment of the system of independent directors of the Listed Companies.

It is hereby proposed to amend Article 6 of the Articles of Association as follows:

Original:	Since the date the Company is established, the original articles of association of the Company become effective. The original articles of association will lapse when the new articles of association become effective subject to the passing of a special resolution in the extraordinary general meeting and the approval by the State Economic and Trade Commission.
	From the date the Articles of Association become effective, the Articles of Association become a legally binding document governing the organization and action of the company, rights and obligations between the company and its shareholders, and amongst the shareholders.
Proposed amendment:	Since the date the Company is established, the original articles of association of the Company become effective. The original articles of association will lapse when the new articles of association become effective subject to the passing of a special resolution in the shareholders’ general meeting and the approval by the State Economic and Trade Commission.
	From the date the Articles of Association become effective, the Articles of Association become a legally binding document governing the organization and action of the company, rights and obligations between the company and its shareholders, and amongst the shareholders.

It is hereby proposed to amend Article 65 of the Articles of Association as follows:

Original:	A shareholder (including proxy) when voting at a shareholders’ general meeting may exercise voting rights in accordance with the number of shares carrying the right to vote and each share shall have one vote.
Proposed amendment:	A shareholder (including proxy) when voting at a shareholders’ general meeting may exercise voting rights in accordance with the number of shares carrying the right to vote and each share shall have one vote.
	When there is any shareholder that holds 30% or more in the Company, the election of two or more directors in the shareholders’ general meeting will adopt accumulative voting system.
	Accumulative voting system shall mean every share of the shareholder carry votes that equal to the total number of directors to be elected. The shareholder can vote for one director, or to vote for various directors. The number of votes will determine which director to be elected.

It is hereby proposed to add a new Chapter 11 - Independent Non-executive Directors to the Articles of Association as follows:

Article 101	The independent directors shall perform fiduciary duties and diligence to the Company and all shareholders. The independent directors shall perform its duties in a serious manner, and to protect the overall benefits of the Company in accordance with the laws, regulations, constitution and Articles of Association. In particular, concern will be made as to the protection for the legal rights of the significant and minority shareholders. The independent directors shall perform his duties independently and not being influenced by the major shareholders, beneficial controlling parties or other units or individuals with interests in the Company. The independent directors shall ensure that he has adequate time and effort devoted to perform his duties as an independent director.
Article 102	The independent director does not have a position in the company apart from being a director. There is no relation between the company and its major shareholders and the independent director that will prevent the independent director forming an independent and objective judgment. If the independent director fails to satisfy the criteria for his independence, or there is any event occurred as a result of which it is not appropriate for the independent director to perform his duties, there is not enough independent directors for the company, the company shall reappoint adequate number of independent directors.
Article 103	The independent director shall enjoy independence in the company. The following parties shall not be appointed as an independent director:
	(I)	the staff and his immediate family members and major social associates (immediate family members shall mean spouse, parents, children; major social associates shall mean brothers and sisters, father and mother in law, son and daughter in law, spouses of brothers and sisters, and brothers and sisters of spouses) that are employed by the Company and its subsidiaries;
	(II)	the natural person shareholders and his immediate family members directly and indirectly hold 1% or above of the issued share capital of the Company;
	(III)	the staff and his immediate family member that are employed in the units of shareholders which directly and indirectly hold 5% or above of the issued share capital of the Company or the top five shareholders of the Company;
	(IV)	any party that fall into the conditions as described in the three paragraphs above;
	(V)	the professionals that provide financial, legal, management consultancy and technical consultancy services to the Company or its subsidiaries;
	(VI)	other parties as provided in the articles of association;
	(VII)	other parties as endorsed by the China Securities Regulatory Commission.
Article 104	The independent director shall be eligible as to:
	(I)	be the director of listed companies pursuant to the laws, administrative regulations and other relevant requirements;
	(II)	satisfy the criteria of independence as mentioned above;
	(III)	having basic knowledge on the operation of the Company, and familiar with the relevant laws, administrative regulations, constitutions and rules;
	(IV)	have five or more years of experience in law, economics or the working experience necessary to the performance of his duties as a director;
	(V)	other conditions as provided in the Articles of Association.
Article 105	The nomination, election and the change of independent directors shall be conducted pursuant to and governed by the laws.
	(I)	The Company’s Board of Directors, Supervisory Committee, shareholder individually or joint holding 1% or more of the issued shares of the company may nominate proposed independent director, subject to the election in the shareholders’ general meeting.
	(II)	The nominator shall seek the consent of the party being nominated before nominating the same as the independent director. The nominator shall thoroughly understand the profession, academic qualification, title, career history and all part-time positions of the party being nominated, and issue an opinion as to the qualification and the independence of the independent directors. The party being nominated shall publish a declaration to the public concerning that there is no relation between the company and its major shareholders and the independent director that will prevent the independent director forming an independent and objective judgment.
		Before the shareholders’ general meeting for the election of independent directors is convened, the Company’s Board of Directors shall publish the content above pursuant to the relevant provisions.
	(III)	Before the shareholders’ general meeting for the election of independent directors is convened, the Company shall deliver the relevant information of all the parties being nominated to China Securities Regulatory Commission, the local offices of the China Securities Regulatory Commission at the place of business of the Company and the stock exchange where the Company’s shares are listed. If there is any dispute arising from the Company’s Board of Directors as to the party being nominated, such opinion of the Board of Directors shall also be delivered in writing accordingly.
		If China Securities Regulatory Commission disagree with the party being nominated, he will only become the proposed director but not the proposed independent director.
		When the shareholders’ general meeting is convened to elect the independent directors, the Company’s Board of Directors shall explain whether China Securities Regulatory Commission disagree with the proposed independent director or not.
	(IV)	The term of each independent director shall be the same as that of other directors of the company. The independent director is eligible for re-election subject to the occupation of office for a maximum of six years.
	(V)	If any independent director fails to attend the meeting of the Board of Directors in person for three consecutive times, the Board of Directors may request the shareholders’ general meeting to remove him accordingly.
		Save as the aforesaid condition, and the conditions as provided in the Company Law concerning disqualifications of directors, independent directors shall not be removed from office without any reason before the expiration of his term. In the event that the independent director is removed before the expiration of his term, the Company shall disclose the details accordingly as a special item. The independent director may publish a declaration to the public if he considers that the reason for his removal is not sound.
	(VI)	The independent directors may resign before the expiration of his term. The resigned independent director shall submit the written report on his resignation to the Board of Directors, and explain in details any matter that shall be noted by the shareholders and creditors of the Company that is related to his resignation.
		If the resignation of the independent director lead to the number of independent directors to the total number of the Board of Directors falling below the minimum requirement as provided in relevant constitutional provisions, the resignation report of such independent director shall become effective on the date the appointment of the succeeding independent director becomes effective.
Article 106	Apart from the authorities as granted to the directors pursuant to the Company Law and other relevant laws and regulations, the Company shall confer the following special authority to the independent director:
	(I)	Substantial connected transaction (shall mean the amount for the connected transaction propose to be entered into between the Company and the connected party exceeds 3,000,000 or 5% of the audited net assets of the Company) shall be presented to the Board of Directors for discussion after being endorsed by the independent directors;
		Before the independent directors arrive at a conclusion, they may engage intermediaries to provide report by the independent financial advisers as the basis of their conclusion.
	(II)	To propose to the Board of Directors regarding the appointment or removal of registered accountant;
	(III)	To propose to the Board of Directors for convening the extraordinary general meeting;
	(IV)	To engage for external auditor and consulting firm independently;
	(V)	To solicit votes from the shareholders in the public before the shareholders’ general meeting is convened;
	The exercise of authorities by the independent directors shall obtain the consent of more than half of all the independent directors. In the event that the proposals as mentioned above were not adopted, or the authorities were not capable to exercise in its usual manner, the Company shall disclose the details accordingly.
	In the event that the Company’s Board of Directors has established remuneration committee, audit committee and nomination committee, the independent director shall represent half of the members in such committees.
Article 107	Apart from performing the aforesaid duties the independent directors shall issue its independent opinion to the Board of Directors or the shareholders’ general meeting:
	(I)	the nomination, appointment and removal of directors;
	(II)	the appointment and removal of senior officers;
	(III)	remuneration of the directors and senior officers of the Company;
	(IV)	amounts due to or from the shareholders, beneficial controlling party of the Company and its associates exceeding 3,000,000 or 5% of the last audited net asset of the Company that is existing or created recently, and whether the Company adopts any measures for the collection of the amounts due;
	(V)	matters that the independent directors consider to be detrimental to the interest of the minority shareholders;
	(VI)	other matters provided in the articles of association.
	The independent directors shall issue their opinion for the aforesaid matters as to whether they agree, agree with qualified opinion and their reasons, disagree and their reasons, not able to form an opinion and the reasons thereof.
	If the relevant matters are discloseable, the Company shall publish the opinion of the independent directors. If there is no consensus among the independent directors, the Board of Directors shall separately state the opinion of each of the independent director.
Article 108	The Company shall ensure that the independent directors are entitled to the right of information as other directors have. For matters to be decided by the Board of Directors, the Company shall inform the independent directors and provide adequate information in advance pursuant to the statutory time frame. If the independent directors consider that the information is not sufficient, they may require supplementary information. If two or more independent directors consider that information is not sufficient or the evidence is not certain as to arriving at a conclusion, they may request the Board of Directors jointly in writing to postpone the date for convening the meeting for the Board of Director or to consider the matter at a later date. The Board of Directors shall adopt accordingly.
	The Company and the independent directors shall keep the information provided by the Company to the independent directors for a period of at least five years.
Article 109	The Company shall provide to the independent directors the working condition necessary to the performance of their duties. The secretary to the Board of the Company shall actively provide assistance to the independent directors, such as briefings and information. When an announcement shall be made regarding the independent opinion, proposal and statement in writing issued by the independent directors, the Secretary to the Board shall prepare the announcement and submit to the stock exchange accordingly.
	When the independent directors exercises his authority, the officers of the Company shall assist and shall not reject, obstruct or conceal any matter that will prevent him to exercise his authority.
Article 110	The cost of engaging intermediaries and other costs incurred during the course of performing his duties by the independent director shall be assumed by the company.
	The Company shall grant an appropriate sum to the independent directors as allowance. The standard of the allowance shall be set by the Board of Directors and approved by the shareholders’ general meeting. Such allowance will also be disclosed in the annual report.
	Apart from the allowance as mentioned above, the independent directors shall not obtain additional benefits from the Company and its major shareholders or organizations and officers with interests in the Company that is not disclosed.
	The listed company may establish independent directors liability insurance system, if necessary, so as to minimize the risk incurred by the independent directors when performing their duties.
	In addition to the rules and regulations of the PRC and the articles of association of the Company governing the responsibilities of the independent directors, the independent directors must also comply with the Rules governing the Listing of securities on the Stock Exchange of Hong Kong Limited.
	Other sections and articles shall be renumbered accordingly.
	The aforesaid proposals were discussed by the Board of Directors and will present to the 10th shareholders’ general meeting for consideration. The chairman of the Board/directors/Board of Directors is hereby authorized to complete the procedures for the changes accordingly.

Please also refer to the published version of this announcement in the Hong Kong iMail.