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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in Riche Multi-Media 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, licensed securities dealer 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 the circular.

RICHE MULTI-MEDIA HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 764)

(1) PROPOSED SHARE CONSOLIDATION;
(2) PLACING OF NEW SHARES SUBJECT TO SHAREHOLDERS' APPROVAL;
(3) REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SECURITIES;
(4) REFRESHMENT OF THE SCHEME MANDATE LIMIT; AND
(5) NOTICE OF SPECIAL GENERAL MEETING

Placing Agent

KINGSTON SECURITIES LIMITED

Independent financial adviser to the Independent Board

Committee and the Independent Shareholders

大華證券(香港)有限公司

GRAND CATHAY SECURITIES (HONG KONG) LIMITED

A letter from the Independent Board Committee is set out on page 24 of the circular and a letter from Grand Cathay Securities (Hong Kong) Limited to the Independent Shareholders is set out on pages 25 to 32 of this circular.

A notice convening the special general meeting of Riche Multi-Media Holdings Limited to be held at 11:00 a.m. on Friday, 18 May 2007 at Room 3408, 34/F, Shun Tak Centre, West Tower, 168-200 Connaught Road Central, Hong Kong is set out on pages 33 to 36 of this circular. Whether or not you are able to attend the special general meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the branch share registrar of the Company in Hong Kong, Standard Registrars Limited, 26/F., Tesbury Centre, 28 Queen's Road East, Wanchai, Hong Kong as soon as possible but 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 of a form of proxy will not preclude you from attending and voting at the special general meeting or any adjournment thereof in person if you so wish.

2 May 2007

CONTENTS

Page

DEFINITIONS ... 1
EXPECTED TIMETABLE ... 6
LETTER FORM THE BOARD ... 8
LETTER FROM THE INDEPENDENT BOARD COMMITTEE ... 24
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER ... 25
NOTICE OF SGM ... 33

— i —

DEFINITIONS

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

"AGM"
the annual general meeting of the Company held on 23 June 2006

"Announcement"
the announcement dated 10 April 2007 issued by the Company in relation to, among other things, the Share Consolidation and the Placing

"associate(s)"
has the meaning ascribed thereto under the Listing Rules

"Board"
board of Directors

"CCASS"
The Central Clearing and Settlement System established and operated by HKSCC

"Company"
Riche Multi-Media Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange

"Consolidated Share(s)"
consolidated ordinary share(s) of HK$0.10 each in the issued and unissued share capital of the Company upon the Share Consolidation becoming effective

"Director(s)"
director(s) of the Company

"Existing General Mandate"
the general mandate approved and granted to the Directors to allot and issue securities not exceeding 20% of the issued share capital of the Company at the date of passing the resolution at the AGM

"Eligible Persons"
means:
(i) (a) any director or proposed director (whether executive or non-executive, including any independent non-executive director), employee or proposed employee (whether full time or part time) of, or
(b) any individual for the time being seconded to work for,

— 1 —

DEFINITIONS

any member of the Group or any controlling Shareholder or any company controlled by a controlling Shareholder; or

(ii) any holder of any securities issued by any member of the Group or any controlling Shareholder or any company controlled by a controlling Shareholder; or

(iii) (a) any business or joint venture partner, contractor, agent or representative of,

(b) any person or entity that provides research, development or other technological support or any advisory, consultancy, professional or other services to,

(d) any customer, licensee (including any sub-licensee) or distributor of films, television programmes, video features, goods or services of, or

(e) any landlord or tenant (including any sub-tenant) of,

any member of the Group or any controlling Shareholder or any company controlled by a controlling Shareholder;

and, for the purposes of the New Share Option Scheme, shall include any company controlled by one or more persons belonging to any of the above classes of participants

“Existing Share(s)”

existing ordinary share(s) of HK$0.01 each in the issued and unissued share capital of the Company, before the implementation of the Share Consolidation

“Group”

the Company and its subsidiaries

“HKSCC”

Hong Kong Securities Clearing Company Limited

“Hong Kong”

the Hong Kong Special Administrative Region of the Peoples’s Republic of China

— 2 —

DEFINITIONS

“Independent Board Committee” an independent committee of the Board comprising Mr. Tang Chak Lam, Gilbert, Mr. Ho Wai Chi, Paul and Mr. Lien Wai Hung established by the Board to advise the Independent Shareholders on the refreshment of the general mandate to allot and issue securities

“Independent Financial Adviser” Grand Cathay Securities (Hong Kong) Limited, a licensed corporation to conduct type 1 (dealing in securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders

“Independent Shareholders” Shareholders other than the Directors (excluding the independent non-executive Directors) and the chief executive of the Company and their respective associates, who are Mr. Heung and Ms. Chen and their respective associates (including Classical Statue Limited)

“Kingston Securities” or “Placing Agent” Kingston Securities Limited, a licensed corporation to conduct type 1 regulated activity (dealing in securities) under the SFO

“Last Trading Date” 3 April 2007, being the last full trading day for the Shares before the date of the Announcement

“Latest Practicable Date” 30 April 2007, being the latest practicable date prior to the printing of this circular for ascertaining information contained in this circular

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

“Mr. Heung” Mr. Heung Wah Keung, an executive Director

“Ms. Chen” Ms. Chen Ming Yin, Tiffany, an executive Director

“New General Mandate” the general mandate proposed to be granted to the Directors at the SGM to allot and issue securities not exceeding 20% of the issued share capital of the Company at the date of passing such resolution at the SGM

“New Share Option Scheme” the share option scheme adopted by the Company on 21 January 2002

— 3 —

DEFINITIONS

"Old Share Option Scheme" the share option scheme adopted by the Company on 19 January 2000 and terminated on 21 January 2002

"Options" share options issued or to be issued by the Company under the New Share Option Scheme

"Placee(s)" any individual(s), institutional or other professional investor(s) or any of their respective subsidiaries or associates procured by the Placing Agent to subscribe for any of the Placing Shares pursuant to the Placing Agent's obligations under the Placing Agreement

"Placing" placing of 155,620,000 new Consolidated Shares pursuant to the terms of the Placing Agreement

"Placing Agreement" the conditional placing agreement entered into between the Company and the Placing Agent dated 4 April 2007 in relation to the Placing

"Placing Price" HK$ 0.55 per Placing Share

"Placing Shares" an aggregate of 155,620,000 new Consolidated Shares to be placed pursuant to the Placing Agreement

"Registrar" Standard Registrars Limited, the branch share registrar of the Company in Hong Kong

"Scheme Mandate Limit" the total number of Shares (being up to 10% of Shares in issue at the date of the SGM) which may be issued upon exercise of all options to be granted under the New Share Option Scheme as at the date of adoption of the New Share Option Scheme or as refreshed

"SFO" the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

"SGM" a special general meeting of the Company to be held at 11:00 a.m. on Friday, 18 May 2007 at Room 3408, 34/F, Shun Tak Centre, West Tower, 168-200 Connaught Road Central, Hong Kong for the purpose of considering and, if thought fit, approving, among other things, (i) the Share Consolidation, (ii) the Placing; (iii) the refreshment of the general mandate to allot and issue securities; and (iv) the refreshment of the Scheme Mandate Limit

— 4 —

DEFINITIONS

“Share(s)”	Existing Share(s) and/or Consolidated Share(s), as the case may be
“Share Consolidation”	the proposed consolidation of every ten (10) Existing Shares into one (1) Consolidated Share
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

— 5 —

EXPECTED TIMETABLE

Set out below is an indicative timetable for the implementation of the Share Consolidation. The timetable is subject to the results of the SGM. The Company will notify the Shareholders of any changes to the expected timetable by way of announcement(s) as and when appropriate.

2007

Despatch of the circular regarding, among other matters, the Share Consolidation Wednesday, 2 May

Latest time for lodging the form of proxy for the SGM 11:00 a.m. Wednesday, 16 May

SGM 11:00 a.m. Friday, 18 May

Announcement of results of the SGM Monday, 21 May

Effective date of the Share Consolidation Monday, 21 May

Original counter for trading in Existing Shares in board lots of 10,000 Existing Shares (in the form of existing share certificates in purple) temporarily closes 9:30 a.m. Monday, 21 May

Temporary counter for trading in Consolidated Shares in board lots of 1,000 Consolidated Shares (in the form of existing share certificates in purple) opens 9:30 a.m. Monday, 21 May

First day for free exchange of existing share certificates in purple for new share certificates in brown Monday, 21 May

First day of operation of odd lots trading facility Monday, 21 May

Original counter for trading in Consolidated Shares in board lots of 10,000 Consolidated Shares (in the form of new share certificates in brown) reopens 9:30 a.m. Tuesday, 5 June

Parallel trading in Consolidated Shares (in the forms of both existing and new share certificates) commences 9:30 a.m. Tuesday, 5 June

Temporary counter for trading in Consolidated Shares in board lots of 1,000 Consolidated Shares (in the form of existing share certificates in purple) closes 4:00 p.m. Wednesday, 27 June

— 6 —

EXPECTED TIMETABLE

2007

Parallel trading in Consolidated Shares (in the forms of both existing and new share certificates) ends 4:00 p.m. Wednesday, 27 June

Last day of operation of odd lots trading facility Wednesday, 27 June

Latest time for free exchange of share certificates 4:00 p.m. Tuesday, 3 July

LETTER FROM THE BOARD

RICHE MULTI-MEDIA HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 764)

Executive Directors:

Mr. Heung Wah Keung (Chairman)

Ms. Chen Ming Yin, Tiffany (Vice Chairman)

Independent Non-executive Directors:

Mr. Tang Chak Lam, Gilbert

Mr. Ho Wai Chi, Paul

Mr. Lien Wai Hung

Registered Office:

Clarendon House

2 Church Street

Hamilton HM 11

Bermuda

Head office and principal place of business in Hong Kong:

Room 3408

34/F, Shun Tak Centre, West Tower

168-200 Connaught Road Central

Hong Kong

2 May 2007

To the Shareholders and, for information only, the holders of the Options

Dear Sir or Madam,

(1) PROPOSED SHARE CONSOLIDATION;

(2) PLACING OF NEW SHARES SUBJECT TO SHAREHOLDERS' APPROVAL;

(3) REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SECURITIES;

(4) REFRESHMENT OF THE SCHEME MANDATE LIMIT;

AND

(5) NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

On 10 April 2007, the Company announced that (i) the Board proposes that every ten (10) issued and unissued Existing Shares be consolidated into one (1) Consolidated Share; and (ii) on 4 April 2007, the Company has conditionally agreed to place, through the Placing Agent, on a fully underwritten basis 155,620,000 Placing Shares to independent investors at a price of HK$0.55 per Placing Share.

LETTER FROM THE BOARD

The Board also proposes, inter alia, to refresh (i) the general mandate for the Directors to exercise the powers of the Company to allot and issue securities not exceeding 20% of the issued share capital of the Company as at the date of the SGM; and (ii) the Scheme Mandate Limit for the Directors to exercise the powers of the Company to grant Options entitling holders thereof to subscribe for Shares not exceeding 10% of the issued share capital of the Company as at the date of the SGM.

As the refreshment of the general mandate to allot and issue securities is proposed to the Shareholders prior to the Company's next annual general meeting, the grant of the New General Mandate will be subject to Independent Shareholders' approval by way of poll at the SGM pursuant to Rule 13.36(4)(a) of the Listing Rules.

The SGM will be convened and held for the Shareholders or Independent Shareholders, as the case may be, to consider and, if thought fit, approve (i) the Share Consolidation; (ii) the Placing; (iii) the grant of New General Mandate; and (iv) the refreshment of Scheme Mandate Limit. The purpose of this circular is to provide you with further information regarding, among other things, (i) the Share Consolidation; (ii) the Placing; (iii) the grant of the New General Mandate; (iv) the refreshment of the Scheme Mandate Limit; (v) the recommendation from the Independent Board Committee on the grant of the New General Mandate; (vi) the recommendation from the Independent Financial Adviser to the Independent Board Committee and Independent Shareholders on the grant of the New General Mandate; and (vii) the notice convening the SGM.

PROPOSED SHARE CONSOLIDATION

The Board proposes that every ten (10) issued and unissued Existing Shares be consolidated into one (1) Consolidated Share.

As at the Latest Practicable Date, the authorised share capital of the Company is HK$200,000,000 divided into 20,000,000,000 Existing Shares of which 7,781,199,745 Existing Shares have been issued which are fully paid or credited as fully paid. As at the Latest Practicable Date, save for the Options eligible for exercise to subscribe for up to an aggregate of 940,900,000 Existing Shares, there are no other outstanding options, warrants or securities convertible or exchangeable into Shares.

Based on the existing issued share capital of the Company and assuming no further Shares will be issued from the Latest Practicable Date up to date of the implementation of the Share Consolidation, the authorised share capital of the Company will remain at HK$200,000,000 but divided into 2,000,000,000 Consolidated Shares of which 778,119,974 Consolidated Shares will be in issue which are fully paid or credited as fully paid following the implementation of the Share Consolidation.

— 9 —

LETTER FROM THE BOARD

Conditions of the Share Consolidation

The implementation of the Share Consolidation is conditional upon:

(i) the passing of the resolution by the Shareholders to approve the Share Consolidation at the SGM; and
(ii) the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Consolidated Shares in issue upon the Share Consolidation becoming effective and any Consolidated Shares which may fall to be issued upon exercise of the Options.

Subject to the fulfillment of the conditions of the Share Consolidation, the effective date of the Share Consolidation is expected to be on Monday, 21 May 2007, being the business day immediately after the SGM.

Effects of the Share Consolidation

The Consolidated Shares will rank pari passu in all respects with each other and the Share Consolidation will not result in any change in the relative rights of the Shareholders. Fractional Consolidated Shares will not be issued by the Company to the Shareholders. Any fractional entitlements to the Consolidated Shares will be aggregated, sold and retained for the benefit of the Company.

As at the Latest Practicable Date, Existing Shares are traded in board lots of 10,000 Existing Shares. Following the Share Consolidation, there will be no change to the existing board lot size for share trading. The Consolidated Shares will be traded in board lots of 10,000 Consolidated Shares. Based on the adjusted closing price of HK$0.64 per Consolidated Share (assuming the Share Consolidation becoming effective) on the Last Trading Date (based on the closing price of HK$0.064 per Existing Share as quoted on the Stock Exchange on the Last Trading Date), the value of each board lot will be changed from HK$640 (before the Share Consolidation becoming effective) to HK$6,400 (assuming the Share Consolidation becoming effective).

Other than the expenses to be incurred by the Company in relation to the Share Consolidation, the implementation thereof will not, by itself, affect the underlying assets, business operations, management or financial position of the Group nor would it affect the interests and rights or the respective shareholdings in the Company of the Shareholders as a whole.

— 10 —

LETTER FROM THE BOARD

Reasons for the Share Consolidation

Taking into account that the Share Consolidation will increase the nominal value of the Existing Shares and their trading price per board lot, and hence reducing the overall transaction and handling costs for dealings in the Consolidated Shares, and for the compliance with the requirements under Rule 13.64 of the Listing Rules, the Directors are of the view that the Share Consolidation is fair and reasonable, and in the interests of the Company and the Shareholders as a whole.

Application for listing of the Consolidated Shares

Application will be made by the Company to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Consolidated Shares in issue upon the Share Consolidation becoming effective and any Consolidated Shares which may fall to be issued upon exercise of the Options.

Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on the Stock Exchange or, under contingent situation, such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Arrangement for odd lot trading

In order to facilitate the trading of odd lots (if any) of the Consolidated Shares arising from the Share Consolidation, the Company has appointed Kingston Securities to match the purchase and sale of odd lots of the Consolidated Shares at the relevant market price per Consolidated Share for the period from Monday, 21 May 2007 to Wednesday, 27 June 2007 (both dates inclusive). Holders of odd lots of the Consolidated Shares who wish to take advantage of this facility either to dispose of their odd lots of the Consolidated Shares or top up to a full board lot may, directly or through their brokers, contact Ms. Rosita Kiu (Tel.: 2298-6215 and Fax: 2295-0682) of Kingston Securities during this period. Holders of odd lots of the Consolidated Shares should note that the matching of the sale and purchase of odd lots of the Consolidated Shares is on best effort only and successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed. Any Shareholder, who is in any doubt about the odd lot facility, is recommended to consult his/her/its own professional advisers.

— 11 —

LETTER FROM THE BOARD

Exchange of certificates for Consolidated Shares

Subject to the Share Consolidation becoming effective, which is expected to be on Monday, 21 May 2007, being the business day immediately after the SGM, Shareholders may on or after Monday, 21 May 2007 until 4:00 p.m. on Tuesday, 3 July 2007 (both dates inclusive), deliver their existing share certificates in purple for the Existing Shares to the Registrar for exchange for new share certificates in brown for the Consolidated Shares free of charge at the expense of the Company.

Shareholders should note that after the prescribed time for free exchange of share certificates, a fee of HK$2.50 (or such higher amount as may from time to time be allowed by the Stock Exchange) will be payable by the Shareholders to the Registrar for each new share certificate to be issued.

It is expected that new share certificates for the Consolidated Shares will be available for collection on or after the tenth business day from the date of submission of the certificates for the Existing Shares to the Registrar. Unless otherwise instructed, new share certificates for the Consolidated Shares will be issued in board lots of 10,000 Consolidated Shares.

With effect from Thursday, 28 June 2007, trading will only be in Consolidated Shares which share certificates will be issued in brown. Existing share certificates in purple for the Existing Shares will cease to be marketable and valid for trading and settlement purposes, but will remain valid and effective as documents of title.

Adjustments in relation to the Options

As at the Latest Practicable Date, there are outstanding Options entitling the holders thereof to subscribe for up to an aggregate of 940,900,000 Existing Shares (equivalent to 94,090,000 Consolidated Shares). The Share Consolidation may cause adjustments to the subscription price and/or the number of Consolidated Shares to be issued under the Options. The Company will appoint the Company's auditors to review and confirm that the basis of such adjustments to the Options comply with Chapter 17 of the Listing Rules and the supplementary guidance issued by the Stock Exchange on 5 September 2005 and in accordance with the rules of the New Share Option Scheme. The Company will inform the holders of the Options of the adjustment accordingly.

— 12 —

LETTER FROM THE BOARD

Effects of the Share Consolidation on the share capital of the Company

The following table shows the total authorised share capital of the Company as at the Latest Practicable Date and immediately after the Share Consolidation becoming effective:

	As at the Latest Practicable Date Existing Shares HK$		Immediately after the Share Consolidation becoming effective Consolidated Shares HK$
Total authorised	20,000,000,000	200,000,000.00	2,000,000,000	200,000,000.00
Total issued	7,781,199,745	77,811,997.45	778,119,974	77,811,997.40
Total unissued	12,218,800,255	122,188,002.55	1,221,880,026	122,188,002.60

THE PLACING

The Placing Agreement

Date

4 April 2007

Issuer

The Company

Placing Agent

The Placing Agent has conditionally agreed to place in an aggregate of 155,620,000 Placing Shares on a fully underwritten basis and will receive a placing commission of 2.5% on the gross proceeds of the Placing. The Directors (including the independent non-executive Directors) are of the view that the placing commission is fair and reasonable. The Placing Agent and its ultimate beneficial owners are independent of and not connected persons (as defined in the Listing Rules) of the Company and its connected persons (as defined in the Listing Rules).

— 13 —

LETTER FROM THE BOARD

Placees

The Placing Agent has agreed to place the Placing Shares on a fully underwritten basis, to not fewer than six Placees who and whose ultimate beneficial owners will not be connected persons (as defined in the Listing Rules) of the Company and its connected persons (as defined in the Listing Rules). It is not expected that any individual Placee will become a substantial Shareholder (as defined under the Listing Rules) immediately after the Placing.

Placing Shares

As at the Latest Practicable Date, the 155,620,000 Placing Shares represent (i) approximately 19.99% of the issued share capital of the Company of 778,119,974 Consolidated Shares (assuming the Share Consolidation becoming effective) and (ii) approximately 16.67% of the Company's issued share capital of 933,739,974 Consolidated Shares as enlarged by the Placing (assuming the Share Consolidation becoming effective).

Ranking of the Placing Shares

The Placing Shares will rank, upon issue, pari passu in all respects with the Shares in issue on the date of allotment and issue of the Placing Shares.

Placing Price

The Placing Price of HK$0.55 represents:

(i) a discount of approximately 14.06% to the adjusted closing price of HK$0.64 per Consolidated Share (assuming the Share Consolidation becoming effective) as quoted on the Stock Exchange on the Last Trading Date;

(ii) a discount of approximately 4.84% to the adjusted average closing price of approximately HK$0.578 per Consolidated Share (assuming the Share Consolidation becoming effective) as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Date;

(iii) a premium of approximately 7.0% over the adjusted average closing price of HK$0.514 per Consolidated Share (assuming the Share Consolidation becoming effective) as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Date; and

(iv) a discount of approximately 31.25% to the adjusted closing price of HK$0.80 per Consolidated Share (assuming the Share Consolidation becoming effective) as quoted on the Stock Exchange as at the Latest Practicable Date.

— 14 —

LETTER FROM THE BOARD

The Placing Price was determined with reference to the sluggish Share price and the historical business performance of the Group and was negotiated on an arm’s length basis between the Company and the Placing Agent. The Directors (including the independent non-executive Directors) consider that the terms of the Placing are on normal commercial terms and are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

Conditions of the Placing

Completion of the Placing is conditional upon:

(i) the Share Consolidation becoming effective;

(ii) the passing of the resolution by the Shareholders to approve the allotment, issue and dealing with the Placing Shares at the SGM;

(iii) the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Placing Shares; and

(iv) the obligations of the Placing Agent under the Placing Agreement becoming unconditional and not being terminated in accordance with the terms of the Placing Agreement, including provisions regarding force majeure event.

Termination and force majeure

The Placing Agreement may be terminated by the Placing Agent if at any time at or before 10:00 a.m. on the date for completion of the Placing Agreement, there occurs:

(i) the introduction of any new law or regulation or any change in existing laws or regulations (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

(ii) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before and/or after the date of the Placing Agreement) of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national, international outbreak or escalation of hostilities or

— 15 —

LETTER FROM THE BOARD

armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or adversely prejudices the success of the placing of the Shares by potential investor(s) or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the Placing; or

(iii) any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction on trading in securities) occurs which affect the success of the Placing (such success being the placing of the Shares to potential investor(s)) or otherwise in the reasonable opinion of the Placing Agent make it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the Placing.

The Directors are not aware of the occurrence of any of such events as at the Latest Practicable Date.

Completion of the Placing

The conditions set out in the Placing Agreement is expected to be fulfilled on or before 31 May 2007, or such later date as may be agreed by the Company and the Placing Agent and the completion of the Placing will take place on or before the fourth business day after the Placing Agreement becomes unconditional.

As the Placing may or may not proceed and is subject to Shareholders’ approval, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

Reasons for the Placing and Use of Proceeds

The Directors consider various ways of raising funds. In the view that there are investors showing their interests to invest in the Company, and the Directors consider that the Placing represents an opportunity to raise capital for possible diversified investments of the Group while broadening the Shareholder base and capital base of the Company. Accordingly, the Directors consider the Placing Agreement is in the interests of the Company and the Shareholders as a whole.

The gross proceeds from the Placing will be approximately HK$85.59 million. The net proceeds of approximately HK$83.30 million from the Placing is intended to be used for financing possible diversified investments of the Group and the general working capital of the Group but the allocation of the net proceeds has not yet been determined. As at the Latest Practicable Date, no such investment has been identified by the Group. The net proceeds raised per Placing Share upon the completion the Placing is approximately HK$0.535.

— 16 —

LETTER FROM THE BOARD

Fund Raising Activities in the Past Twelve Months

Save as disclosed below, the Company has not conducted any fund raising activities in the past twelve months before the date of the Announcement and up to the Latest Practicable Date:

Date of announcement	Event	Net proceeds (approximately)	Intended use of proceeds	Actual use of proceeds
19 March 2007	Placing of 1,296,860,000 Existing Shares and subscription of 1,296,860,000 new Existing Shares	HK$50,500,000	For financing possible diversified investments of the Group and the general working capital of the Group	Not yet utilised

Effects on Shareholding Structure

	As at the Latest Practicable Date		Immediately after the Share Consolidation and before the Placing		Immediately after the Share Consolidation and the Placing
	Existing Shares	Approximate %	Consolidated Shares	Approximate %	Consolidated Shares	Approximate %
Classical Statue Limited (Note 1)	2,232,510,000	28.69%	223,251,000	28.69%	223,251,000	23.91%
Northbay Investments Holdings Limited (Note 2)	1,330,321,745	17.10%	133,032,174	17.10%	133,032,174	14.25%
Public:
— Places	—	—	—	—	155,620,000	16.67%
— Other public Shareholders	4,218,368,000	54.21%	421,836,800	54.21%	421,836,800	45.17%
	7,781,199,745	100.00%	778,119,974	100.00%	933,739,974	100.00%

Notes:

Classical Statue Limited is an indirect wholly-owned subsidiary of China Star Entertainment Limited which is listed on the Stock Exchange. Mr. Heung and Ms. Chen, both being the executive Directors, are the only directors of Classical Statue Limited.
$35.5\%$ and $64.5\%$ of the shareholding of Northbay Investments Holdings Limited are respectively owned by Asia Vest Partners VII Limited and Asia Vest Partners X Limited, and both of them are indirectly wholly-owned by Mr. Andrew Nan Sherrill through Asia Vest Partners Limited. Northbay Investments Holdings Limited and its ultimate beneficial owners do not hold any management position or directorship in the Company.

LETTER FROM THE BOARD

REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SECURITIES

At the AGM, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Existing General Mandate to (i) allot up to 1,296,867,949 Existing Shares, which is equivalent to 20% of the then issued share capital of the Company. As the Existing General Mandate granted to the Directors at the AGM has been substantially utilised by the top-up placing of 1,296,860,000 new Existing Shares as announced on 19 March 2007, the Directors will seek the approval of the Independent Shareholders by a resolution at the SGM for refreshment of the general mandate to the Directors to exercise the powers of the Company to allot and issue securities not exceeding 20% of the issued share capital of the Company as at the date of passing the relevant resolution at the SGM.

Based on the 7,781,199,745 Existing Shares in issue as at the Latest Practicable Date and assuming that no further Existing Shares are repurchased and issued prior to the SGM, subject to the passing of the relevant ordinary resolutions to approve the refreshment of the general mandate to allot and issue securities at the SGM, the Directors will be authorised to allot and issue up to a limit of 1,556,239,949 Existing Shares (equivalent to 155,623,994 Consolidated Shares assuming the Share Consolidation becoming effective) under the New General Mandate.

The refreshment of the general mandate to allot and issue securities is proposed to the Shareholders prior to the Company's next annual general meeting, and therefore, pursuant to Rule 13.36(4) of the Listing Rules, the refreshment will be subject to the Independent Shareholders' approval by way of poll at the SGM, and the Directors, Mr. Heung and Ms. Chen and their respective associates (including Classical Statue Limited of which Mr. Heung and Ms. Chen are the only directors), are required to abstain from voting in favour thereon. As at the Latest Practicable Date, Classical Statue Limited was interested in an aggregate of 2,232,510,000 Existing Shares, representing approximately 28.69% of the existing issued share capital of the Company of 7,781,199,745 Existing Shares.

The Directors believe that it is in the interests of the Company and its Shareholders as a whole if the New General Mandate is granted at the SGM. The need for an issue of securities under the New General Mandate could, for example, arise in the context of a transaction, such as an acquisition by the Group where securities are to be issued as consideration, which has to be completed speedily. Save for the Placing, the Directors currently have no intention of any acquisition by the Company nor any plan for raising capital by issuing new securities. In this respect, the Company will comply with the relevant requirements of the Listing Rules.

REFRESHMENT OF THE SCHEME MANDATE LIMIT

Pursuant to a resolution passed at the special general meeting of the Company held on 21 January 2002, the New Share Option Scheme was adopted and the Old Share Option Scheme was terminated.

— 18 —

LETTER FROM THE BOARD

The purpose of the New Share Option Scheme is to provide incentives and rewards to Eligible Persons for their contribution or potential contribution to the Group. The exercise price of an Option must be the highest of: (i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant, which must be a business day; (ii) the average closing price of the Shares as stated in the Stock Exchange’s daily quotations sheets for the five business day immediately preceding the date of grant; and (iii) the nominal value of the Share.

Old Share Option Scheme

As the Old Share Option Scheme was terminated, no further options can be granted under the Old Share Option Scheme. Moreover, no outstanding share options granted under the Old Share Option Scheme prior to the said termination on 21 January 2002 shall remain valid and exercisable in accordance with the provisions of the Old Share Option Scheme.

Apart from the New Share Option Scheme, the Company has no other share option scheme in place as at the Latest Practicable Date.

New Share Option Scheme

Pursuant to the New Share Option Scheme, the total number of Shares which may be issued upon exercise of all Options to be granted by the Company under the New Share Option Scheme and any other options to be granted by the Company under any other share option schemes of the Company must not in aggregate exceed 10% of the Shares in issue as at the date of approval of the New Share Option Scheme (being the “Scheme Mandate Limit”). Options, lapsed in accordance with the terms of the New Share Option Scheme shall not be counted for the purpose of calculating the Scheme Mandate Limit. The Scheme Mandate Limit may be refreshed by Shareholders in general meeting from time to time.

At the special general meeting held on 14 January 2005, the Scheme Mandate Limit was refreshed to allow the Company to grant Options entitling holders to subscribe for Shares not exceeding 10% of the issued share capital of the Company as at the date approving the refreshment, which amounted to 475,200,000 Options.

On 22 March 2007, the Company granted a total of 475,200,000 Options to certain Eligible Persons to allow them to subscribe for 475,200,000 Existing Shares, which represented 100% of the Scheme Mandate Limit as refreshed at the special general meeting held on 14 January 2005.

Up to the Latest Practicable Date, the Company has granted an aggregate of 950,400,000 Options (after adjustment) under the New Share Option Scheme pursuant to the Scheme Mandate Limit as last refreshed on 14 January 2005. No Options were exercised and lapsed respectively and 9,500,000 Option was cancelled under the New Share Option Scheme.

— 19 —

LETTER FROM THE BOARD

Therefore, as at the Latest Practicable Date, there are 940,900,000 Options outstanding and unexercised under the New Share Option Scheme to which holders were entitled to subscribe for 940,900,000 Existing Shares.

As 100% of the Scheme Mandate Limit of 475,200,000 Options as refreshed on 14 January 2005 has been used, the Directors are of the view that in order to provide incentives and rewards to the Eligible Persons for their contribution or potential contribution to the Group by granting Options to them, the Scheme Mandate Limit shall be refreshed to provide the Company with greater flexibility.

As at the Latest Practicable Date, there were 7,781,199,745 Existing Shares in issue. Assuming there is no further allotment and issue of Shares and no further grant of Options under the New Share Option Scheme, upon the granting of a refreshment of the Scheme Mandate Limit by the Shareholders at the SGM, the Scheme Mandate Limit (as refreshed) will allow the Company to grant Option entitling holders thereof to subscribe for Shares not exceeding 10% of the issued share capital of the Company as at the date of approving the refreshment of the Scheme Mandate Limit which are 778,119,974 Existing Shares.

The limit on the number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the New Share Option Scheme and any other share option schemes adopted by the Company including the Old Share Option Scheme must not exceed 30% of the Shares in issue from time to time. As at the Latest Practicable Date, such number of Shares which may by issued upon exercise of all outstanding Options granted and yet to be exercised under the New Share Option Scheme and any other share option schemes adopted by the Company including the Old Share Option Scheme does not exceed 30% of the Shares in issue.

The refreshment of the Scheme Mandate Limit is conditional upon:

(i) the passing by the Shareholders of an ordinary resolution at the SGM to approve, among other things, the refreshment of the Scheme Mandate Limit; and
(ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, 10% of the Shares in issue at the date of approval of the refreshment of the Scheme Mandate Limit which may be issued pursuant to the exercise of Options to be granted under the New Share Option Scheme.

Application will be made to the Listing Committee of the Stock Exchange for the grant of listing of, and permission to deal in, 10% of the Shares in issue at the date of approval of the refreshment of the Scheme Mandate Limit which may be issued pursuant to the exercise of Options to be granted under the New Share Option Scheme.

— 20 —

LETTER FROM THE BOARD

GENERAL

The Group is principally engaged in the distribution of films, sub-licensing of film rights, sales of financial assets and property investment. As at the Latest Practicable Date, the existing authorised share capital of the Company consists of 20,000,000,000 Existing Shares out of which 7,781,199,745 Existing Shares are issued and fully paid up or credited as fully paid.

Application will be made by the Company to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Consolidated Shares, the Placing Shares and 10% of the Shares in issue at the date of approval of the refreshment of the Scheme Mandate Limit which may be issued pursuant to the exercise of Options to be granted under the New Share Option Scheme.

The Independent Board Committee comprising Mr. Tang Chak Lam, Gilbert, Mr. Ho Wai Chi, Paul and Mr. Lien Wai Hung, all being independent non-executive Directors, has been formed to advise the Independent Shareholders on the refreshment of the general mandate to allot and issue securities. Grand Cathay Securities (Hong Kong) Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and Independent Shareholders on the refreshment of the general mandate to allot and issue securities.

The text of the letter from the Independent Board Committee is set out on page 24 of this circular and the text of the letter from the Independent Financial Adviser containing its advice is set out on pages 25 to 32 of this circular.

An announcement of the poll results at the SGM will be made by the Company in the next business day following the SGM.

SGM

A notice convening the SGM is set out on pages 33 to 36 of this circular. The SGM will be convened for the purpose of considering and, if thought fit, passing the ordinary resolutions to approve (i) the Share Consolidation; (ii) the Placing; (iii) the grant of the New General Mandate; and (iv) the refreshment of the Scheme Mandate Limit.

Pursuant to Rule 13.36(4)(a) of the Listing Rules, the grant of the New General Mandate requires the approval of the Independent Shareholders by poll at the SGM. Since there is no controlling Shareholder, the Directors (excluding the independent non-executive Directors) and the chief executive of the Company and their respective associates, who are Mr. Heung and Ms. Chen and their respective associates (including Classical Statue Limited of which Mr. Heung and Ms. Chen are the only directors), shall abstain from voting in favour thereon. As at the Latest Practicable Date, Classical Statue Limited was interested in an aggregate of 2,232,510,000 Existing Shares, representing approximately 28.69% of the existing issued share capital of the Company of 7,781,199,745 Existing Shares.

— 21 —

LETTER FROM THE BOARD

To the best of the Directors' knowledge, information and belief having made all reasonable enquires, no Shareholder is required to abstain from voting for the Share Consolidation, the Placing and the refreshment of the Scheme Mandate Limit at the SGM. The resolutions in respect of the Share Consolidation, the Placing and the refreshment of the Scheme Mandate Limit will be voted on a show of hands unless a poll is demanded in accordance with bye-law 66 of the bye-laws of the Company which provision is summarised under the paragraph headed "Right to demand a poll" in this circular.

A form of proxy for use at the SGM is enclosed. Whether or not you are able to attend the meeting in person, please complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong, Standard Registrars Limited at 26/F., Tesbury Centre, 28 Queen's Road East, Wanchai, Hong Kong, the branch share registrar and transfer office of the Company in Hong Kong and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of a form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

RIGHT TO DEMAND A POLL

Pursuant to the bye-law 66 of the bye-laws of the Company, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by:

(i) the chairman of the meeting; or
(ii) 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
(iii) 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 the Shareholders having the right to vote at the meeting; or
(iv) Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised corporate representative or by proxy and holding Shares 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 the Shares conferring that right.

— 22 —

LETTER FROM THE BOARD

On a show of hands every Shareholder presents in person or by proxy or (being a corporation) is represented by a representative duly authorised shall have one vote, and on a poll every Shareholder presents in person or, in case of a Shareholder being a corporation by its duly authorised representative or by proxy shall have one vote for every fully paid Share.

RECOMMENDATION

The Board is of the opinion that the terms of the Placing Agreement are on normal commercial terms and are fair and reasonable and the Share Consolidation, the Placing, the grant of New General Mandate and the refreshment of the Scheme Mandate Limit are in the interests of the Company and Shareholders as a whole, and recommends you to vote in favour of the resolutions to be proposed at the SGM to approve the relevant resolutions.

DIRECTORS' RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility of the accuracy of the information contained in this circular, and confirm, having made all reasonable enquiries, that to the best of their knowledge, information and belief, there are no other facts the omission of which would make any statement herein misleading.

Yours faithfully,

By order of the Board

Riche Multi-Media Holdings Limited

Mr. Heung Wah Keung

Chairman

— 23 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

RICHE MULTI-MEDIA HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 764)

2 May 2007

To the Independent Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATE TO ISSUE AND ALLOT SECURITIES

We refer to the circular of the Company to the Shareholders dated 2 May 2007 (the "Circular"), of which this letter forms part. Terms defined herein shall have the same meanings as defined in the Circular unless the context otherwise requires.

We have been appointed by the Board to advise the Independent Shareholders as to whether the grant of New General Mandate is fair and reasonable so far as the Independent Shareholders are concerned. Grand Cathay Securities (Hong Kong) Limited has been appointed as the Independent Financial Adviser to advise us and the Independent Shareholders in this respect. Details of its advise, together with the principal factors and reasons taken in to account in arriving at such advice, are set out in their letter of advice on pages 25 to 32 of the Circular.

Having considered the advice of Grand Cathay Securities (Hong Kong) Limited, we consider that the grant of New General Mandate are fair and reasonable so far as the Independent Shareholders are concerned and the grant of New General Mandate are in the interests of the Company and its Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the SGM to approve the grant of New General Mandate.

Yours faithfully,

The Independent Board Committee

Mr. Tang Chak Lam, Gilbert Mr. Ho Wai Chi, Paul Mr. Lien Wai Hung

Independent non-executive Directors

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of the letter of advice to the Independent Board Committee and the Independent Shareholders from the Independent Financial Adviser prepared for incorporation in this circular.

大華證券(香港)

GRAND CATHAY SECURITIES (HONG KONG) LIMITED
香港中環花園道3號中國工商銀行大廈7樓701至704室
Room 701-704, 7/F., ICBC Tower, Citibank Plaza, 3 Garden Road, Central, Hong Kong
Tel: 852-2521-2982 Fax: 852-2521-0085 www.gcsc.com.tw

2 May 2007

To the Independent Board Committee and
the Independent Shareholders

Dear Sirs,

REFRESHMENT OF GENERAL MANDATE
TO ALLOT AND ISSUE SECURITIES

INTRODUCTION

We refer to our engagement as independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed refreshment of general mandate to allot and issue securities, particulars of which are set out in the letter from the Board (the "Letter from the Board") contained in the circular of the Company dated 2 May 2007 (the "Circular"), of which this letter forms part. Unless the context requires otherwise, capitalised terms used in this letter shall have the same meanings as those defined in the Circular.

As stated in the Letter from the Board, the Board proposes, inter alia, to refresh the general mandate for the Directors to exercise the powers of the Company to allot and issue securities not exceeding 20% of the issued share capital of the Company as at the date of the SGM.

Pursuant to Rule 13.36(4) of the Listing Rules, the grant of the New General Mandate is subject to the approval of the Independent Shareholders at the SGM by way of poll with the controlling Shareholders and their associates or, where there are no controlling Shareholders, Directors (excluding the independent non-executive Directors) and the chief executive and their respective associates abstain from voting in favour.

Since there is no controlling Shareholder, the Directors (excluding the independent non-executive Directors) and the chief executive of the Company and their respective associates, who are Mr. Heung and Ms. Chen and their respective associates (including Classical Statue Limited), shall abstain from voting in favour thereon.

— 25 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee, comprising Mr. Tang Chak Lam, Gilbert, Mr. Ho Wai Chi, Paul, and Mr. Lien Wai Hung, all being independent non-executive Directors, has been established to advise the Independent Shareholders as to whether the grant of the New General Mandate is fair and reasonable and is in the interests of the Company and the Shareholders as a whole. We, Grand Cathay Securities (Hong Kong) 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, we have relied on the information, opinion and representations contained or referred to in the Circular and the information, opinion and representations provided to us by the management of the Company and the Directors. We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the management of the Company and the Directors, for which they are solely and wholly responsible, were true, accurate and complete at the time when they were made and continue to be so at the date hereof.

Accordingly, 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 representations contained in the Circular, or the reasonableness of the opinions expressed by the management of the Company and the Directors provided to us. The Directors collectively and individually accept full responsibility for the accuracy of the information in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts the omission of which would make any statement in the Circular misleading. Furthermore, we relied on that the Company has provided us sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have relied on such information and opinions but have not, however, conducted any independent in-depth investigation into the business, financial conditions and affairs or the future prospects of the Group.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion regarding the grant of the New General Mandate, we have considered the following principal factors and reasons:

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Background

The Directors were authorised to allot and issue up to 1,296,867,949 Existing Shares under the Existing General Mandate which was granted by the Shareholders at the annual general meeting of the Company held on 23 June 2006.

On 19 March 2007, the Company announced that the placing agreement and the top-up subscription agreement were entered into by the Company and pursuant to which, a total of 1,296,860,000 new Existing Shares were issued upon the completion of the top-up subscription agreement on 30 March 2007. Pursuant to the Company’s announcement dated 19 March 2007, the net proceeds of approximately HK$50.5 million from the top-up subscription was intended to be used for financing the possible diversified investments of the Group and the general working capital of the Group but the allocation of the net proceeds has not yet been determined.

As a result of the top-up subscription, the Existing General Mandate was substantially utilised as to 1,296,860,000 Existing Shares, representing approximately 99.99% of the Existing General Mandate. If the New General Mandate is not granted, only 7,949 Existing Shares may be allotted and issued by the Directors under the Existing General Mandate.

In this regard, the Board therefore proposes an ordinary resolution to the Independent Shareholders in accordance with Rule 13.36(4) of the Listing Rules for the granting of the New General Mandate at the SGM, by which if passed, will allow the Directors to exercise the powers of the Company to allot and issue securities not exceeding 20% of the issued share capital of the Company as at the date of the SGM. Based on the total number of 7,781,199,745 Existing Shares in issue as at the Latest Practicable Date and assuming that no Existing Shares are purchased and issued prior to the SGM, it is anticipated that the Directors will be granted the power to allot and issue further 1,556,239,949 Existing Shares or 155,623,994 Consolidated Shares (assuming the Share Consolidation becoming effective), representing 20% of the issued share capital of the Company as at the date of SGM, under the New General Mandate if it is approved by the Independent Shareholders at the SGM.

Fund raising activities of the Company in the past twelve months and current resources

Subsequent to the top-up placing of 1,296,860,000 new Existing Shares as mentioned in the above paragraph headed “Background” in this letter, the Company announced on 10 April 2007 that (i) the Board proposes that every ten (10) issued and unissued Existing

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Shares be consolidated into one (1) Consolidated Share; and (ii) on 4 April 2007, the Company has conditionally agreed to place, through the Placing Agent on a fully underwritten basis 155,620,000 new Consolidated Shares to not fewer than six independent investors for an aggregate gross proceeds of HK$85.59 million.

As detailed in the Circular, the Placing is conditional upon (i) the Share Consolidation becoming effective; (ii) the passing of the resolution by the Shareholders to approve the allotment, issue and dealing with the Placing Shares at the SGM; (iii) the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Placing Shares; and (iv) the obligations of the Placing Agent under the Placing Agreement becoming unconditional and not being terminated in accordance with the terms of the Placing Agreement, including provisions regarding force majeure event.

The net proceeds of approximately HK$83.3 million from the Placing is intended to be used for financing possible diversified investments of the Group and the general working capital of the Group but the allocation of net proceeds has not yet been determined as at the Latest Practicable Date.

We note from the Letter from the Board that the net proceeds of approximately HK$50.5 million from the top-up placing of 1,296,860,000 new Existing Shares as announced on 19 March 2007 has not yet utilised and is retained as general working capital as at the Latest Practicable Date. On the assumption that the Placing is duly completed, the Company will have successfully banked an aggregate of HK$133.8 million through the previous two equity financing in recent months.

We would like to draw your attention on the 2006 annual results of the Group which has just been released and announced on 26 April 2007. The cash and cash equivalents of the Group was approximately HK$63.1 million as at 31 December 2006. The total indebtedness of the Group amounted to HK$357.4 million as at 31 December 2006, of which the non-current portion of the secured bank loans were high as HK$352.0 million which drive the Group's gearing ratio to 0.89 (Total debt/total equity) (2005: 0.21). We have advised by the Directors that, taking into account of the net proceeds of HK$133.8 million from the recent two fund raising activities (assuming the Placing is duly completed), the Directors consider that the existing cash and facilities resources of the Group are sufficient for its daily operations.

— 28 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. The reasons for the refreshment

Financial requirement for the possible diversified investments

The Company is an investment holding company and its subsidiaries are principally engaged in the distribution of films, sub-licensing of film rights, sales of financial assets and property investment.

On 23 February 2006, the Group announced an acquisition of property assets in Beijing for a consideration of approximately HK$266.1 million. The consideration was satisfied by issuing a total of 1,330,321,745 new Existing Shares at a price of HK$0.20 each. Details of such acquisition was set out in the Company’s announcements dated 23 February 2006 and 22 May 2006 and the Company’s circular dated 19 May 2006.

We have been advised by the Directors that the Directors are still proactively identifying suitable investment opportunities to develop and diversify the Group’s business so as to broaden the revenue base of the Group but the investment size has not yet been determined. Though the Directors consider that the existing cash and facilities resources of the Group are sufficient for its daily operations, there is no certainty or guarantee that the current financial resource of the Group (including the funding from the recent capital raising activities and assuming the Placing is successfully completed) will be adequate for any appropriate investments in a transaction size like the property acquisition in 2006 that may be identified and materialise in the future. Additional funding may still be needed for financing the possible future diversified investments may suitable investment opportunities arises.

We have been advised by the Directors that the next annual general meeting will not be held until around the end of June 2007, which is about two months away from the Latest Practicable Date. Given the Existing General Mandate has been almost fully utilised, may any investment opportunities arise that would require issuance of new securities as consideration, a specific mandate may have to be sought and the Directors are uncertain as to whether such approval from the Independent Shareholders could be obtained in a timely manner so as to grasp the investment opportunities.

On such basis, we consider that the refreshment of the general mandate to allot and issue securities before the next annual general meeting is for a prudent sake.

— 29 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Financial flexibility

Notwithstanding that the Group has no immediate capital requirement for its current operation nor has any concrete plan for any diversified investment at present, the Directors are of the view that the New General Mandate will provide the Directors with higher degree of flexibility to capture the favourable market sentiment to raise funds by issuing new securities so as to strengthen the capital and shareholder base of the Company. The Directors are therefore of the view that the grant of the New General Mandate is in the interests of the Company and the Shareholders as a whole.

We concur with the Directors' view in this respect. The grant of the New General Mandate would avail the Company of a high degree of flexibility as allowed under the Listing Rules to issue and allot new Shares for equity fund raising, such as placing of new Shares, or as consideration for the potential future investments or acquisition which the Directors may think fit and appropriate. The grant of New General Mandate will also offer the Directors a high degree of financial flexibility to invest in the potential diversified investments in a timely manner. As such, we agree with the Directors that the grant of the New General Mandate will be in the interests of the Company and the Shareholders as a whole.

Other financing alternatives

Apart from equity financing, the Directors confirmed that they will also consider other financing alternatives such as debt financing, bank borrowings and internal cash resources to meet the Company's financing requirements for future business development and potential diversified investments but depend on the financial position, capital structure, the cost of funding of the Group and the then market conditions. However, the Directors consider that the debt financing or bank borrowings may be subject to a lengthy negotiation process, which may not facilitate the Directors for a prompt investment decision as compared to equity financing through the New General Mandate. The Directors indicates that they will evaluate the available financing methods with due care in considering to fund any future investment opportunities so as to protect the interests of the Company and the Shareholders as a whole.

We consider that the New General Mandate can facilitate the Directors with an additional financing option and it is reasonable for the Company to have the flexibility in deciding the best financing methods for any future investments or business developments.

On the above basis, we are of the opinion that the grant of the New General Mandate is in the interests of the Company and the Shareholders as a whole.

— 30 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Potential dilution to shareholding of the Shareholders

The table below set out the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately after the Share Consolidation and the Placing (assuming the Share Consolidation becoming effective and the Placing having completed); and (iii) for illustrative purpose, the potential dilution effect upon full utilisation of the New General Mandate, assuming that no Shares are issued and/or repurchased by the Company.

	As at the Latest Practicable Date		Immediately after the Share Consolidation and the Placing (assuming the Share Consolidation becoming effective and the Placing having completed)		Issued shares of the Company upon full utilisation of the New General Mandate
	No. of Existing Shares	Approximate %	No. of Consolidated Shares	Approximate %	No. of Consolidated Shares	Approximate %
Classical Statue Limited (Note 1)	2,232,510,000	28.69%	223,251,000	23.91%	223,251,000	20.49%
Northbay Investments Holdings Limited (Note 2)	1,330,321,745	17.10%	133,032,174	14.25%	133,032,174	12.21%
Placees	—	—	155,620,000	16.67%	155,620,000	14.29%
Existing Public Shareholders (including the Placees)	4,218,368,000	54.21%	421,836,800	45.17%	421,836,800	38.72%
Consolidated Shares to be issued under the New General Mandate	—	—	—	—	155,623,994	14.29%
Total	7,781,199,745	100.00%	933,739,974	100.00%	1,089,363,968	100.00

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Notes:

Classical Statue Limited is an indirect wholly-owned subsidiary of China Star Entertainment Limited which is listed on the Stock Exchange.
35.5% and 64.5% of the shareholding of Northbay Investments Holdings Limited are respectively owned by Asia Vest Partners VII Limited and Asia Vest Partners X Limited, and both of them are indirectly wholly-owned by Mr. Andrew Nan Sherrill through Asia Vest Partners Limited. Northbay Investments Holdings Limited and its ultimate beneficial owners do not hold any management position or directorship in the Company.

The above table illustrates that the shareholding of the existing public Shareholders will decrease from approximately 54.21% to approximately 45.17% upon the completion of the Share Consolidation and the Placing and further drop to approximately 38.72% upon full utilisation of the New General Mandate (assuming no other Shares are issued or repurchased by the Company).

Taking into account that the shareholding of all the Shareholders will be diluted to the same extent upon any utilisation of the New General Mandate, we consider that the potential dilution to the shareholding of the existing public Shareholders is acceptable.

Shareholders should note that upon the approval of the New General Mandate at the SGM, the Existing General Mandate will be revoked and the New General Mandate will be and continue to be in force until the earliest of (i) the conclusion of the Company's next annual general meeting; (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable law to be held; and (iii) the revocation or variation of the authority given under the relevant resolution to be proposed by ordinary resolution of the Shareholders in general meeting. Such duration is in compliance with Rule 13.36(3) of the Listing Rules.

RECOMMENDATION

Having considered the above principal factors, we are of the opinion that the grant of the New General Mandate are fair and reasonable so far as the Independent Shareholders are concerned and the grant of the New General Mandate is in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Shareholders, and also recommend the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the resolution approving the grant of the New General Mandate at the SGM.

Yours faithfully,

For and on behalf of

Grand Cathay Securities (Hong Kong) Limited

Kim Chan

Director

Kevin Chan

Director

— 32 —

NOTICE OF SGM

RICHE MULTI-MEDIA HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 764)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Riche Multi-Media Holdings Limited (the "Company") will be held at 11:00 a.m. on Friday, 18 May 2007 at Room 3408, 34/F, Shun Tak Centre, West Tower, 168-200 Connaught Road Central, Hong Kong for the following purposes of considering and, if thought fit, passing, with or without modification, the following resolutions:

ORDINARY RESOLUTIONS

"THAT subject to and conditional upon the granting by the Listing Committee of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") of the listing of, and permission to deal in, the ordinary shares of the Company consolidated in the manner as set out in paragraph (a) of this resolution below:

(a) every ten (10) issued and unissued ordinary shares of HK$0.01 each (each an "Existing Share") in the capital of the Company be consolidated into one (1) share of HK$0.10 each (each a "Consolidated Share"), such Consolidated Share(s) shall rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions in respect of ordinary shares contained in the bye-laws of the Company;

(b) all fractions of the Consolidated Shares to which holders of issued shares of HK$0.10 each in the capital of the Company would otherwise be entitled, if any, shall be aggregated, sold and retained for the benefit of the Company; and

(c) the directors of the Company (the "Directors") be and are generally authorised to do all such acts and things and execute all such documents, including under the seal of the Company, where applicable, as they consider necessary or expedient to give effect to the foregoing arrangements."

"THAT:

(a) the conditional placing agreement (the "Placing Agreement") dated 4 April 2007 between the Company and Kingston Securities Limited (the "Placing Agent")

NOTICE OF SGM

pursuant to which, inter alia, the Placing Agent agreed to (i) procure placees to subscribe for 155,620,000 new Consolidated Shares (the “Placing Shares”) to be issued by the Company, on a fully underwritten basis (a copy of which has been produced to this meeting marked “A” and initialled by the chairman of the meeting for the identification purpose) be and is hereby confirmed, approved and ratified;

(b) the allotment and issue of the Placing Shares pursuant to and in accordance with the terms and conditions of the Placing Agreement be and is hereby approved; and

(c) any one director of the Company be and is hereby authorised to take such actions or execute such documents to effect the allotment and issue of the Placing Shares and to do such other things (including affixing the Company’s common seal) and to take all such action as he or she considers necessary or desirable for the purpose of giving effect to the Placing Agreement.”

“THAT:

(a) the general mandate granted to the directors of the Company to exercise the powers of the Company to allot, issue and deal with securities of the Company as approved by the shareholders of the Company at the annual general meeting of the Company held on 23 June 2006 be and is hereby revoked (without prejudice to any valid exercise of such general mandate prior to the passing of this resolution);

(b) subject to paragraph (d) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.01 each in the share capital of the Company (the “Shares”) and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into Shares) which would or might require the exercise of such powers during or after the end of the Relevant Period, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

(c) the approval in paragraph (b) above shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into Shares) which would or might require the exercise of such powers after the end of the Relevant Period;

(d) the aggregate nominal amount of share capital of the Company allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the directors of the Company pursuant to the approval in paragraph (b) above, otherwise than pursuant to:

NOTICE OF SGM

(i) a Rights Issue (as hereinafter defined); or
(ii) an issue of Shares upon the exercise of rights of subscription or conversion attaching to any warrants issued by the Company or any securities which are convertible into Shares, the issue of which warrants and other securities has previously been approved by shareholders of the Company; or
(iii) an issue of Shares upon the exercise of any options granted under any share option scheme or similar arrangement for the time being adopted for the grant or issue to eligible persons of Shares or rights to acquire Shares; or
(iv) an issue of Shares as scrip dividends or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the bye-laws of the Company, shall not in total exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this resolution and the said approval shall be limited accordingly; and

(e) for the purpose of this resolution, "Relevant Period" means the period from the date of passing of this resolution until whichever is the earliest of:

(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company, the Companies Act (1981) of Bermuda (as amended) or any applicable laws of Bermuda to be held; and
(iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the directors of the Company under this resolution.

"Rights Issue" means an offer of Shares or an offer of warrants, options or other securities giving rights to subscribe for Shares, open for a period fixed by the directors of the Company to holders of Shares or any class thereof whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such Shares or any class thereof (subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in any territory outside Hong Kong).

NOTICE OF SGM

"THAT conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, 10% of the Shares in issue at the date of approval of this resolution which may be issued pursuant to the exercise of options to be granted under the share option scheme adopted by the Company on 21 January 2002 (the "Share Option Scheme") and any other share option schemes of the Company, and pursuant to rule 4 of the rules of the Share Option Scheme, approval be and is hereby granted for "refreshing" the Scheme Mandate (as defined in the rules of the Share Option Scheme) under the Share Option Scheme provided that (i) the total number of Shares in the share capital of the Company which may be issued upon the exercise of all options to be granted under the Share Option Scheme and any other share option schemes of the Company under the limit as "refreshed" hereby shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution; and (ii) options previously granted under the Share Option Scheme and any other share option schemes of the Company (including options outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme or any other share option schemes of the Company) shall not be counted for the purpose of calculating the 10% limit as "refreshed" hereby."

By Order of the Board
Riche Multi-Media Holdings Limited
Chan Kin Wah, Billy
Company Secretary

Hong Kong, 2 May 2007

Notes:

To be valid, the instrument appointing a proxy must be in writing under the hand of the appointor or of his attorney authorised in writing or if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised.
Any member of the Company entitled to attend and vote at the meeting shall be entitled to appoint person as his proxy to attend and vote instead of him. A proxy duly appointed pursuant to the articles of association of the Company is entitled to vote on a show of hands at the meeting. On a poll votes may be given either personally or by proxy. A proxy need not be a member of the Company. A member may appoint more than one proxy to attend on the same occasion.
The instrument appointing a proxy and the power of attorney or other authority, if any under which it is signed or a notarially certified copy of that power or authority must be deposited at the Company's share registrar in Hong Kong, Standard Registrars Limited, 26/F., Tesbury Centre, 28 Queen's Road East, Wanchai, Hong Kong not less than 48 hours before the time for holding the meeting or the adjourned meeting or poll (a the case may be) at which the person named in such instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid.
Where there are joint registered holders of any share, any one of such persons may vote at the meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members in respect of such share shall alone be entitled to vote in respect thereof.

— 36 —

AI assistant

Samsonite Group S.A. — Proxy Solicitation & Information Statement 2007

50259_rns_2007-05-02_33d44a6d-e283-4417-9f39-ae280958f07b.pdf

RICHE MULTI-MEDIA HOLDINGS LIMITED

RICHE MULTI-MEDIA HOLDINGS LIMITED

INTRODUCTION

PROPOSED SHARE CONSOLIDATION

Conditions of the Share Consolidation

Effects of the Share Consolidation

Reasons for the Share Consolidation

Application for listing of the Consolidated Shares

Arrangement for odd lot trading

Exchange of certificates for Consolidated Shares

Adjustments in relation to the Options

Effects of the Share Consolidation on the share capital of the Company

THE PLACING

The Placing Agreement

Placees

Placing Shares

Ranking of the Placing Shares

Placing Price

Conditions of the Placing

Termination and force majeure

Completion of the Placing

Reasons for the Placing and Use of Proceeds

Fund Raising Activities in the Past Twelve Months

Effects on Shareholding Structure

Notes:

REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SECURITIES

REFRESHMENT OF THE SCHEME MANDATE LIMIT

Old Share Option Scheme

New Share Option Scheme

GENERAL

SGM

RIGHT TO DEMAND A POLL

RECOMMENDATION

DIRECTORS' RESPONSIBILITY STATEMENT

RICHE MULTI-MEDIA HOLDINGS LIMITED

REFRESHMENT OF GENERAL MANDATE TO ISSUE AND ALLOT SECURITIES

BASIS OF OUR OPINION

PRINCIPAL FACTORS CONSIDERED

3. The reasons for the refreshment

Financial requirement for the possible diversified investments

Financial flexibility

Other financing alternatives

4. Potential dilution to shareholding of the Shareholders

RICHE MULTI-MEDIA HOLDINGS LIMITED

NOTICE OF SPECIAL GENERAL MEETING

ORDINARY RESOLUTIONS

More from Samsonite Group S.A.

Samsonite Group S.A. Proxy Solicitation & Information Statement 2007