Sanbase Corporation Limited — Proxy Solicitation & Information Statement 2020

Jun 30, 2020

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 adviser.

If you have sold or transferred all your shares in Sanbase Corporation Limited, you should at once hand this circular together with the enclosed proxy form, 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 transferee.

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

SANBASE CORPORATION LIMITED 莊 皇 集 團 公 司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 8501)

PROPOSALS FOR

(1) GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES; (2) RE-ELECTION OF DIRECTORS; AND

(3) NOTICE OF AGM

Capitalised terms used in this cover page shall have the same meanings as those defined in this circular.

A letter from the Board is set out on pages 4 to 9 of this circular. A notice convening the AGM to be held at 2:30 p.m., on Friday, 31 July 2020 at Portion 2, 12/F, The Center, 99 Queen’s Road Central, Hong Kong or its adjournment to approve matters referred to this circular is set out on pages 20 to 24 of this circular. A proxy form for use in connection with the AGM is also enclosed with this circular. Such proxy form is also published on the GEM website at www.hkgem.com and the Company’s website at www.sclhk.com.

Whether or not that you are able or intend to attend the AGM, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible, but in any event not later than 48 hours before the time appointed for the holding of the AGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM or any adjourned meeting thereof (as the case may be) should you so wish, and in such case, the proxy form previously submitted shall be deemed to be revoked.

This circular will remain on the ‘‘Latest Company Announcements’’ page of the GEM websites at www.hkgem.com for at least 7 days from the date of its publication and on the website of the Company at www.sclhk.com.

30 June 2020

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

– i –

CONTENTS

				Page
Characteristics		of GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		i
Definitions	. . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			4
Appendix I		–	Explanatory Statement on the Repurchase Mandate . . . . . . . . . . . . . . .	10
Appendix II		–	Particulars of Directors for re-election . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Notice of AGM			. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20

– ii –

DEFINITIONS

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

• ‘‘AGM’’

the annual general meeting of the Company to be held at 2:30 p.m., on Friday, 31 July 2020 at Portion 2, 12/F, The Center, 99 Queen’s Road Central, Hong Kong

• ‘‘AGM Notice’’

• the notice for convening the AGM as set out on pages 20 to 24 of this circular

• ‘‘Articles’’

• the articles of association of the Company, as amended, supplemented and/or otherwise modified from time to time

• ‘‘Board’’ the board of Directors

• ‘‘Close Associate(s)’’

• has the meaning ascribed thereto in the GEM Listing Rules

• ‘‘Company’’

• Sanbase Corporation Limited 莊皇集團公司, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the GEM (Stock Code: 8501)

• ‘‘Companies Law’’ the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands

• ‘‘Controlling Shareholder(s)’’

• has the meaning ascribed thereto under the GEM Listing Rules, including any person or group of persons who are entitled to exercise 30% or more of the voting power at the Company’s general meeting or are in a position to control the composition of a majority of the Board, which as at the Latest Practicable Date, consist of Mr. Wong Sai Chuen and Madison Square International Investment Limited

• ‘‘Core Connected Person’’

has the same meaning as defined in the GEM Listing Rules

• ‘‘Director(s)’’

• the director(s) of the Company

• ‘‘Extension Mandate’’

a general and unconditional mandate proposed to be granted to the Directors at the AGM to the effect that any Shares repurchased under the Repurchase Mandate will be added to the total number of Shares which may be allotted and issued under the Issue Mandate

• ‘‘GEM’’

GEM of the Stock Exchange

– 1 –

DEFINITIONS

‘‘GEM Listing Rules’’

the Rules Governing the Listing of Securities on GEM, as amended, supplemented and/or otherwise modified from time to time

• ‘‘Group’’

the Company and its subsidiaries from time to time

• ‘‘HK$’’

Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’

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

• ‘‘Issue Mandate’’

a general and unconditional mandate proposed to be granted to the Directors at the AGM to exercise all the power to allot, issue or otherwise deal with Shares of up to a maximum of 20% of the total number of Shares in issue of the Company as at the date of passing of the relevant resolution granting such mandate (such mandate to be extended to Shares with the number of any Shares repurchased by the Company pursuant to the Repurchase Mandate)

• ‘‘Latest Practicable Date’’ 23 June 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• ‘‘Nomination Committee’’ the nomination committee of the Company

• ‘‘Remuneration Committee’’ the remuneration committee of the Company

• ‘‘Repurchase Mandate’’

a general and unconditional mandate proposed to be granted to the Directors at the AGM to exercise all powers to repurchase Shares on the Stock Exchange up to a maximum of 10% of the total number of Shares in issue of the Company as at the date of passing the relevant resolution granting such mandate

• ‘‘SFO’’

• ‘‘Share(s)’’

• the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong), as amended, supplemented and/or otherwise modified from time to time ordinary share(s) of US$0.001 each in the issued share capital of the Company

– 2 –

DEFINITIONS

‘‘Shareholder(s)’’	the holder(s) of the Share(s)
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited
‘‘Takeovers Code’’	the Codes on Takeovers and Mergers and Share Buy-backs
	issued by the Securities and Futures Commission, as
	amended, supplemented and/or otherwise modified from
	time to time
‘‘US$’’	United States dollars, the lawful currency in the United
	States of America
‘‘%’’	per cent

– 3 –

LETTER FROM THE BOARD

SANBASE CORPORATION LIMITED 莊 皇 集 團 公 司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 8501)

Executive Directors:

Mr. Wong Sai Chuen (Chairman and Chief Executive Officer) Mr. Wong Kin Kei (Chief Operating Officer) Ms. Hui Man Yee, Maggie Dr. Sung Tak Wing, Leo

Registered Office: 4th Floor, Harbour Place 103 South Church Street P.O. Box 10240 Grand Cayman, KY1-1002 Cayman Islands

Independent Non-executive Directors:

Mr. Cheung Chi Man, Dennis Mr. Chan Chi Kwong, Dickson Mr. Pang Chung Fai, Benny

Principal Place of Business in Hong Kong: 16/F, Loon Kee Building 267-275 Des Voeux Road Central Hong Kong

30 June 2020

Dear Shareholder(s),

PROPOSALS FOR

(1) GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES; (2) RE-ELECTION OF DIRECTORS; AND

(3) NOTICE OF AGM

1. INTRODUCTION

The purpose of this circular is to (i) provide you with all the information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the ordinary resolutions to be proposed at the AGM for the approval of (1) the proposed grant of the Issue Mandate, the Repurchase Mandate and Extension Mandate; (2) the proposed reelection of the relevant Directors; (3) the re-appointment of the Company’s independent auditor, and (ii) to give you the AGM Notice.

– 4 –

LETTER FROM THE BOARD

2. GENERAL MANDATE TO ISSUE SHARES

At the annual general meeting of the Company held on 10 September 2019, the then Shareholders granted a general mandate to the Directors to allot, issue and deal with the Shares. Such mandate will remain in effect until:

• (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 Articles or any applicable laws of the Cayman Islands to be held; or

• (iii) being revoked or varied or renewed by an ordinary resolution of the Shareholders at a general meeting of the Company,

whichever occurs first.

In order to ensure that the flexibility and discretion be given to the Directors in the event that it becomes desirable to allot, issue and deal with the Shares, approval is being sought from the Shareholders for the granting of the Issue Mandate to the Directors to allot, issue and deal with additional Shares of up to a maximum of 20% of the total number of Shares in issue as at the date of the passing of the ordinary resolution contained in item 4 of the AGM Notice and adding to such general mandate any Shares representing the total number of the Shares repurchased by the Company under the Repurchase Mandate. If the resolution is passed and no Share is repurchased by the Company, exercise in full of the Issue Mandate (on the basis of 200,000,000 Shares in issue as at the Latest Practicable Date) would result in up to 40,000,000 new Shares being allotted, issued and dealt with by the Company.

It is recommended that the Extension Mandate be granted to the Directors.

The Directors have no immediate plans to issue any new Shares other than Shares which may fall to be issued under the share option scheme of the Company or any scrip dividend scheme as may be approved by the Shareholders.

3. GENERAL MANDATE TO REPURCHASE SHARES

At the annual general meeting of the Company held on 10 September 2019, the then Shareholders granted a general mandate to the Directors to allot, issue and deal with the Shares. Such mandate will remain in effect until:

• (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 Articles or any applicable laws of the Cayman Islands to be held; or

• (iii) being revoked or varied or renewed by an ordinary resolution of the Shareholders at a general meeting of the Company,

whichever occurs first.

– 5 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, a total of 200,000,000 Shares were in issue. A resolution to grant the Directors the Repurchase Mandate will be proposed at the AGM to enable the Directors to exercise the powers of the Company to repurchase its own issued and fully paid Shares up to a maximum of 10% of the total number of Shares in issue as at the date of the passing of the ordinary resolution contained in item 6 of the AGM Notice (i.e. a total of 20,000,000 Shares, assuming that the number of issued Shares remains unchanged after the Latest Practicable Date and up to the date of the AGM). The Directors have no immediate plans to repurchase any Shares pursuant to the Repurchase Mandate.

In accordance with Rule 13.08 of the GEM Listing Rules, an explanatory statement containing information reasonably necessary for the Shareholders to make an informed decision on whether to vote for or against the granting of the Repurchase Mandate is set out in Appendix I to this circular.

4. RE-ELECTION OF DIRECTORS

As at the Latest Practicable Date, the executive Directors are Mr. Wong Sai Chuen, Mr. Wong Kin Kei, Ms. Hui Man Yee, Maggie and Dr. Sung Tak Wing, Leo; and the independent non-executive Directors are Mr. Cheung Chi Man, Dennis, Mr. Chan Chi Kwong, Dickson and Mr. Pang Chung Fai, Benny.

Article 113 of the Articles states that any Director appointed by the Board to fill a casual vacancy shall hold office until the first general meeting of members after his appointment and be subject to re-election at such meeting and any Director appointed by the Board as an addition to the existing Board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election.

Article 109(a) of the Articles states that notwithstanding any other provisions in the Articles, at each annual general meeting one-third of the Directors for the time being (or, if their number is not a multiple of three (3), the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director shall be subject to retirement at an annual general meeting at least once every three years.

Mr. Wong Kin Kei, Dr. Sung Tak Wing, Leo, Mr. Cheung Chi Man, Dennis, Mr. Chan Chi Kwong, Dickson and Mr. Pang Chung Fai, Benny (collectively, the ‘‘Retiring Directors’’) will retire at the AGM and are eligible for re-election at the AGM.

Pursuant to Rule 17.46A of the GEM Listing Rules, particulars of each of the Retiring Directors proposed to be re-elected at the AGM are set out in Appendix II to this circular.

– 6 –

LETTER FROM THE BOARD

All of the independent non-executive Directors, namely Mr. Cheung Chi Man, Dennis, Mr. Chan Chi Kwong, Dickson and Mr. Pang Chung Fai, Benny, have made confirmation of independence pursuant to the independence guidelines set out in Rule 5.09 of the GEM Listing Rules. The Company is of the view that Mr. Cheung Chi Man, Dennis, Mr. Chan Chi Kwong, Dickson and Mr. Pang Chung Fai, Benny are independent in accordance with the independence guidelines.

The Nomination Committee has also evaluated the performance of the Retiring Directors, which is of the opinion that their performance are satisfactory. In addition, with the nomination of the Nomination Committee, the Board has recommended that all the Retiring Directors stand for re-election at the AGM. As a good corporate governance practice, each of the Retiring Directors has abstained from voting at the relevant Board meeting on the respective propositions of their recommendations for re-election by the Shareholders.

5. RE-APPOINTMENT OF PRICEWATERHOUSECOOPERS AS THE INDEPENDENT AUDITORS OF THE COMPANY

The Board proposes to re-appoint PricewaterhouseCoopers as the independent auditors of the Company to hold office until the conclusion of the next annual general meeting. A resolution will be proposed to authorise the Board to fix the auditor ’s remuneration. PricewaterhouseCoopers has indicated its willingness to be re-appointed as the Company’s independent auditors for the said period.

6. NOTICE OF AGM AND PROXY FORM

The AGM Notice is set out on pages 20 to 24 of this circular.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder is required to abstain from voting on the resolutions to be proposed at the Annual General Meeting.

A proxy form for use in connection with the AGM is enclosed with this circular and such proxy form is also published on the GEM website at www.hkgem.com and the Company’s website at www.sclhk.com. Whether or not you are able or intend to attend the AGM, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the AGM (i.e. 2:30 p.m. on Wednesday, 29 July 2020) or any adjournment thereof. Completion and return of the proxy form shall not preclude you from attending and voting in person at the AGM or any adjournment thereof should you so wish. If you attend and vote at the AGM, the authority of your proxy will be revoked.

– 7 –

LETTER FROM THE BOARD

7. CLOSURE OF REGISTER OF MEMBERS FOR AGM

In order to ascertain the entitlement of Shareholders to attend and vote at the AGM, the transfer books and register of members of the Company will be closed from Tuesday, 28 July 2020 to Friday, 31 July 2020 (both days inclusive), during of which no transfer of Shares will be effected. In order to qualify for attending and voting at the AGM, all transfer documents accompanied by the relevant share certificates must be lodged for registration with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 27 July 2020.

8. VOTING BY POLL

Pursuant to Rule 17.47(4) of the GEM Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman of the meeting, in good faith and in compliance with the GEM Listing Rules, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Therefore, all resolutions proposed at the AGM shall be voted by poll. The Company will appoint Tricor Investor Services Limited, the Hong Kong branch share registrar and transfer office of the Company, as the scrutineer to handle the vote-taking procedures at the AGM. An announcement on the poll vote results will be made by the Company after the AGM in the manner prescribed under Rule 17.47(5) of the GEM Listing Rules.

9. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors have made all reasonable enquires, confirm that, to the best of their knowledge and belief, (i) the information contained in this circular is accurate and complete in all material aspects and not misleading or deceptive; (ii) there are no other matters the omission of which would make any statement herein misleading; and (iii) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

– 8 –

LETTER FROM THE BOARD

10. RECOMMENDATION

The Directors are of the opinion that the (1) the proposed grant of the Issue Mandate, the Repurchase Mandate and the Extension Mandate; (2) the proposed re-election of Retiring Directors, in each case as described in this circular; and (3) the re-appointment of the Company’s independent auditors are all in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favor of the relevant resolutions to be proposed at the AGM.

11. MISCELLANEOUS

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

Yours faithfully For and on behalf of the Board Sanbase Corporation Limited Wong Sai Chuen Chairman, Chief Executive Officer and Executive Director

– 9 –

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

APPENDIX I

This is an explanatory statement given to all the Shareholders relating to a resolution to be proposed at the AGM authorising the Repurchase Mandate.

This explanatory statement contains all the information required pursuant to Rule 13.08 and other relevant provisions of the GEM Listing Rules which are set out as follows:

1. SHARE CAPITAL

As at the Latest Practicable Date, the Company has 200,000,000 Shares in issue.

Subject to the passing of the ordinary resolution set out in item 4 of the AGM Notice in respect of the grant of the Repurchase Mandate and assuming that the total number of Shares in issue remains the same at 200,000,000 Shares from the Latest Practicable Date up to the date of passing such resolution, the Directors would be authorised under the Repurchase Mandate to repurchase, during the period in which the Repurchase Mandate remains in force, up to 20,000,000 Shares, representing 10% of the total number of issued Shares at the date of the AGM.

2. REASONS FOR SHARE REPURCHASES

The Directors have no present intention to repurchase any Shares but consider that the Repurchase Mandate will provide the Company the flexibility to make such repurchase when appropriate and beneficial to the Company. Repurchases of the Shares will only be made when the Directors believe that it is the best interests of the Company and the Shareholders to seek a general authority from Shareholders as such repurchases will benefit the Company and the Shareholders as a whole. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or its earnings per share.

3. FUNDING OF REPURCHASES

In repurchasing shares, the Company may only apply funds legally available for such purpose in accordance with the Articles, the Companies Law, the applicable laws of the Cayman Islands and the GEM Listing Rules.

It is presently proposed that any repurchase of Shares will be made out of the profits of the Company or from sums standing to the credit of the share premium account of the Company or the proceeds of a fresh issue of shares made for the purpose of the purchase, and, in the case of any premium payable on the purchase, out of the profits of the Company or from sums standing to the credit of the share premium account of the Company. Subject to the Companies Law, a repurchase of Shares may also be paid out of capital.

– 10 –

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

APPENDIX I

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements contained in the annual report of the Company for the year ended 31 March 2020) in the event that the Repurchase Mandate is exercised in full.

The Directors do not intend to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or its gearing levels which, in the opinion of the Directors, are from time to time appropriate for the Company.

The Company may not purchase its own shares on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

4. CONNECTED PERSONS

As at the Latest Practicable Date, none of the Directors nor, to the best of the knowledge of the Directors, having made all reasonable enquiries, any of their respective Close Associates, has any present intention to sell any Shares to the Company or its subsidiaries, in the event that the Repurchase Mandate is approved by the Shareholders.

As at the Latest Practicable Date, no Core Connected Persons have notified the Company that he/she/it has a present intention to sell any Shares to the Company, nor has he/she/it undertaken not to do so, in the event that the Repurchase Mandate is approved by the Shareholders.

5. DIRECTORS’ UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules, the Companies Law, the Articles and the applicable laws of the Cayman Islands.

6. EFFECT OF TAKEOVERS CODE

If, as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting in concert (within the meaning under the Takeovers Code), depending on the level of increase in the Shareholder’s interests, could obtain or consolidate control of the Company and become(s) obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

– 11 –

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

APPENDIX I

As at the Latest Practicable Date, based on disclosures made under Part XV of the SFO and to the best of the knowledge and belief of the Directors, the interests of substantial Shareholders were as follows:

			Percentage of
			shareholding
			if Repurchase
		Percentage of	Mandate is
	Number of	existing	exercised
Substantial shareholders	Shares held	shareholding	in full
Madison Square International Investment Limited
(Note 1)	112,500,000	56.25%	62.50%
Mr. Wong Sai Chuen (Note 1)	112,500,000	56.25%	62.50%
Ms. Hui Man Yee, Maggie (Note 1)	112,500,000	56.25%	62.50%
J&J Partner Investment Group Limited (Note 2)	37,500,000	18.75%	20.83%
Mr. Wong Kin Kei (Note 2)	37,500,000	18.75%	20.83%
Ms. Ho Sin Ying (Note 2)	37,500,000	18.75%	20.83%

Notes:

1. Mr. Wong Sai Chuen is a Controlling Shareholder. He is also a director and the ultimate beneficial owner of Madison Square International Investment Limited. Ms. Hui Man Yee, Maggie, the spouse of Mr. Wong Sai Chuen, is deemed to be interested in the 112,500,000 Shares held by him, through his controlled corporation, Madison Square International Investment Limited, pursuant to the SFO.

2. Mr. Wong Kin Kei is a substantial shareholder of the Company. He is also a director and the ultimate beneficial owner of J&J Partner Investment Group Limited. Ms. Ho Sin Ying, the spouse of Mr. Wong Kin Kei, is deemed to be interested in the 37,500,000 Shares held by him, through his controlled corporation, J&J Partner Investment Group Limited, pursuant to the SFO.

On the basis that the total number of Shares in issue of the Company remains unchanged and no further Shares are issued or repurchased prior to the date of the AGM, in the event that the Directors exercise in full the Repurchase Mandate, the interests of all of the above substantial Shareholders would be increased to such percentages of the total number of issued Shares as set out in the fourth column of the above table. On the basis of the current shareholding of all of the above substantial Shareholders as at the Latest Practicable Date, all of the above substantial Shareholders may be obliged to make a mandatory offer under Rule 26 of the Takeovers Code if the Repurchase Mandate is exercised in full.

– 12 –

EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

APPENDIX I

Nevertheless, the Directors have no present intention to exercise the Repurchase Mandate to such extent would result in takeover obligation or the public holding of Shares would be reduced below the prescribed minimum percentage of 25%.

7. SHARE REPURCHASE MADE BY THE COMPANY

No repurchases of Shares have been made by the Company, whether on the Stock Exchange or otherwise in the six months preceding the Latest Practicable Date.

8. SHARE PRICES

The highest and lowest prices per Share at which the Shares were traded on the Stock Exchange in the last 12 months prior to the Latest Practicable Date were as follows:

	Highest	Lowest
	Price	Price
	(HK$)	(HK$)
2019
June	1.280	0.920
July	1.100	1.100
August	1.110	1.110
September	N/A	N/A
October	0.900	0.900
November	0.990	0.950
December	0.950	0.460
2020
January	0.730	0.495
February	0.670	0.435
March	0.560	0.430
April	0.800	0.375
May	0.900	0.375
June (up to the Latest Practicable Date)	1.030	0.335

– 13 –

PARTICULARS OF DIRECTORS FOR RE-ELECTION

APPENDIX II

The following are the particulars of the Directors who will retire and, being eligible, shall offer themselves for re-election at the AGM pursuant to the Articles.

EXECUTIVE DIRECTORS

Mr. Wong Kin Kei

Mr. Wong Kin Kei, aged 43, is the Chief Operating Officer and an executive Director of the Company. He joined the Group in April 2010 and was appointed as a Director on 24 March 2017. He is responsible for business development, daily operations, and technical and project management. Mr. Wong Kin Kei is also a director of certain subsidiaries of the Company.

Mr. Wong Kin Kei has about 20 years of experience in the fit-out industry. Mr. Wong Kin Kei obtained a higher diploma in building services engineering from the City University of Hong Kong in November 1999. He then obtained a bachelor’s degree in engineering from the University of Central Lancashire by distance learning in January 2007. He has also obtained the postgraduate diploma in building services engineering from Heriot-Watt University by distance learning in June 2013.

Mr. Wong Kin Kei has entered into the director’s service agreement for his directorship with the Company with an initial term of three years commencing from 4 January 2018 and subject to the rotational retirement and re-election provisions of the Articles. Mr. Wong Kin Kei is entitled to a fix remuneration as a director of the Company of HK$20,000 per month and such other remuneration and discretionary bonus as may be determined by the Board with reference to the performance of the Company, Mr. Wong Kin Kei’s duties and responsibilities with the Group, and prevailing market conditions. Such remuneration is covered in his service agreement with the Company. His remuneration will be subject to review by the Remuneration Committee and approval by the Board from time to time. Save as disclosed above, Mr. Wong Kin Kei is not entitled to any other remuneration. The aggregate remuneration of Mr. Wong Kin Kei received from the Group for the year ended 31 March 2020 amounted to HK$2,193,000.

Save as disclosed above, Mr. Wong Kin Kei is not related to any other Directors, member of the senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Wong Kin Kei is interested in 37,500,000 Shares held by J&J Partner Investment Group Limited, a company wholly owned by him, in which Mr. Wong Kin Kei is deemed to be interested under Part XV of the SFO.

Save as disclosed above, there is no other matter in relation to the re-election of Mr. Wong Kin Kei that needs to be brought to the attention of the Shareholders nor any information that is required to be disclosed pursuant to Rules 17.50(2)(h) to 17.50(2)(v) of the GEM Listing Rules.

– 14 –

PARTICULARS OF DIRECTORS FOR RE-ELECTION

APPENDIX II

Dr. Sung Tak Wing, Leo (‘‘Dr. Sung’’)

Dr. Sung, aged 59, is an executive Director, company secretary and a compliance officer of the Company. He joined the Group in September 2019 and was appointed as an executive Director on 11 March 2020. He is responsible for daily operations, business development, public relations and company secretarial matter of the Group. Dr. Sung is also a director of a subsidiary of the Company.

Prior to joining the Group, Dr. Sung served as an executive director, chief executive officer, joint company secretary and authorised representative of New Western Group Limited (‘‘New Western’’) (formerly known as Megalogic Technology Holdings Limited), a company listed on GEM of the Stock Exchange (stock code: 8242), from March 2014 to May 2019 and was responsible for accounting and finance management, and business development as well as company secretarial matter. From September 2004 to February 2014, Dr. Sung served as the managing director and a responsible officer of King’s HT Securities Limited (now known as Tensant Securities Limited), a licensed corporation under the SFO, Dr. Sung has over 15 years of experience in the financial and securities industry. Before entering into the financial and securities industry, Dr. Sung has worked for several solicitors’ firms in Hong Kong for about 17 years.

Dr. Sung obtained a bachelor’s degree of Commerce in Management and Marketing from Curtin University of Technology in Australia in February 2002 and also obtained a master’s degree of Accountancy from Lingnan University in November 2012. Dr. Sung has been awarded the distinction of an honorary doctor in Business Administration from American Purlinton University in January 2013. Dr. Sung is an associate member of the Association of International Accountants, a fellow of the Institute of Public Accountants of the Australia, a fellow of the Institute of Financial Accountants of the United Kingdom, an international affiliate of The Hong Kong Institute of Certified Public Accountants, and a fellow of the Institute of the Certified Management Accountants of the Australia.

Dr. Sung has entered into the director’s service agreement for his directorship with the Company with an initial term of one year commencing from 11 March 2020 and subject to the rotational retirement and re-election provisions of the Articles. Dr. Sung is entitled to a fixed remuneration of HK$200,000 per month and such other remuneration and discretionary bonus as may be determined by the Board with reference to the performance of the Company, Dr. Sung’s duties and responsibilities with the Group, and prevailing market conditions. Such remuneration is covered in his service agreement with the Company. His remuneration will be subject to review by the Remuneration Committee and approval by the Board from time to time.

Save as disclosed above, Dr. Sung is not related to any other Directors, member of the senior management, substantial shareholders or controlling shareholders of the Company and does not have any interest in the Shares within the meaning of Part XV of the SFO. As at the Latest Practicable Date, Dr. Sung does not have interest or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

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PARTICULARS OF DIRECTORS FOR RE-ELECTION

APPENDIX II

Save as disclosed above, there is no other matter in relation to the re-election of Dr. Sung that needs to be brought to the attention of the Shareholders nor any information that is required to be disclosed pursuant to Rules 17.50(2)(h) to 17.50(2)(v) of the GEM Listing Rules.

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Cheung Chi Man, Dennis (‘‘Mr. Cheung’’)

Mr. Cheung, aged 52, is an independent non-executive Director of the Company. He joined the Group as an independent non-executive Director with effect from 21 January 2020. Mr. Cheung has over 20 years of experience in financial management, treasury and company secretarial matters.

Mr. Cheung was appointed as an independent non-executive director of the Prosper Construction Holdings Limited, a company listed on the Main Board of the Stock Exchange (stock code: 6816), since August 2017. From April 2015 to June 2020, Mr. Cheung served as an independent non-executive director of New Western.

Mr. Cheung holds a master’s degree in commerce from The University of New South Wales, Australia and a bachelor’s degree in mechanical engineering from Imperial College, London, the United Kingdom. He is a fellow member of The Hong Kong Institute of Certified Public Accountants and a certified tax adviser of The Taxation Institute of Hong Kong.

Mr. Cheung has entered into the appointment letter for his directorship with the Company with an initial term of one year commencing from 21 January 2020 and subject to the rotational retirement and re-election provisions of the Articles. Mr. Cheung is entitled to a fixed remuneration of HK$18,000 per month which is determined by reference to his duties and responsibilities with the Comapny and prevailing market conditions. Such remuneration is covered in his appointment letter with the Company. His remuneration will be subject to review by the Remuneration Committee and approval by the Board from time to time.

Save as disclosed above, Mr. Cheung is not related to any other Directors, member of the senior management, substantial shareholders or controlling shareholders of the Company and does not have any interest in the Shares within the meaning of Part XV of the SFO. As at the Latest Practicable Date, Mr. Cheung does not have interest or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

Save as disclosed above, there is no other matter in relation to the re-election of Mr. Cheung that needs to be brought to the attention of the Shareholders nor any information that is required to be disclosed pursuant to Rules 17.50(2)(h) to 17.50(2)(v) of the GEM Listing Rules.

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PARTICULARS OF DIRECTORS FOR RE-ELECTION

APPENDIX II

Mr. Chan Chi Kwong, Dickson (‘‘Mr. Chan’’)

Mr. Chan, aged 48, is as an independent non-executive Director of the Company. He joined the Group as an independent non-executive Director with effect from 21 January 2020. Mr. Chan has over 20 years of experience in accounting, auditing and taxation matters.

Since June 2018, Mr. Chan has been appointed as an independent non-executive director of eBroker Group Limited, a company listed on GEM of the Stock Exchange (stock code: 8036).

Mr. Chan is a fellow member and CPA (Practising) of The Hong Kong Institute of Certified Public Accountants and a fellow member of The Association of Chartered Certified Accountants. In November 2004, Mr. Chan obtained a master’s degree in corporate finance from The Hong Kong Polytechnic University and a bachelor of laws degree from the City University of Hong Kong in October 2014.

Mr. Chan has entered into the appointment letter for his directorship with the Company with an initial term of one year commencing from 21 January 2020 and subject to the rotational retirement and re-election provisions of the Articles. Mr. Chan is entitled to a fixed remuneration of HK$18,000 per month which is determined by reference to his duties and responsibilities with the Comapny and prevailing market conditions. Such remuneration is covered in his appointment letter with the Company. His remuneration will be subject to review by the Remuneration Committee and approval by the Board from time to time.

Save as disclosed above, Mr. Chan is not related to any other Directors, member of the senior management, substantial shareholders or controlling shareholders of the Company and does not have any interest in the Shares within the meaning of Part XV of the SFO. As at the Latest Practicable Date, Mr. Chan does not have interest or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

Save as disclosed above, there is no other matter in relation to the re-election of Mr. Chan that needs to be brought to the attention of the Shareholders nor any information that is required to be disclosed pursuant to Rules 17.50(2)(h) to 17.50(2)(v) of the GEM Listing Rules.

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PARTICULARS OF DIRECTORS FOR RE-ELECTION

APPENDIX II

Mr. Pang Chung Fai, Benny (‘‘Mr. Pang’’)

Mr. Pang, aged 47, is an independent non-executive Director of the Company. He joined the Group as an independent non-executive Director with effect from 8 December 2017.

Mr. Pang, currently is a partner of F. Zimmern & Co. (in association with Grandall Legal Group (Hong Kong). He continues to serve as the sole proprietor of Benny Pang & Co. He was appointed as an independent non-executive director of Janco Holdings Limited, a company listed on GEM of the Stock Exchange (stock code: 8035) with effect from 27 September 2019. He continues to serve as a non-executive director of Huabang Financial Holdings Limited and an independent non-executive director of Yuanda China Holdings Limited, both companies are listed on the Main Board of the Stock Exchange (stock code: 3638 and 2789, respectively).

Mr. Pang obtained a bachelor degree in laws (honors) from Bond University, Australia, in 1996. He obtained his master degree in laws from The University of New South Wales, Australia in October 1997 and his graduate diploma in legal practice from The College of Law, Sydney in Australia in November 1997. He has been admitted as a legal practitioner of the Supreme Court of New South Wales, Australia since 1997 and as a solicitor of the High Court of Hong Kong since 2009. He is a member of each of the Law Society of New South Wales, Australia and the Law Society of Hong Kong.

Mr. Pang has entered into the appointment letter for his directorship with the Company with an initial term of three years commencing from 4 January 2018 and subject to the rotational retirement and re-election provisions of the Articles. Mr. Pang is entitled to a fixed remuneration of HK$20,000 per month which is determined by reference to his duties and responsibilities with the Company and prevailing market conditions. Such remuneration is covered in his appointment letter with the Company. His remuneration will be subject to review by the Remuneration Committee and approval by the Board from time to time.

Mr. Pang has been criticized by the Listing Committee of GEM of the Stock Exchange on 15 July 2019 in relation to his breach of Rule 5.01(6) of the GEM Listing Rules and his obligations under the Declaration and Undertaking given by him to the Stock Exchange in the form set out in Appendix 6-A of the GEM Listing Rules, in discharging his duties as an independent non-executive director (which he had retired since 1 June 2018) of China Regenerative Medicine International Limited (Stock Code: 8158) (‘‘CRMI’’), and for failing to use his best endeavours to procure CRMI to comply with the GEM Listing Rules in relation to certain lending activity conducted by CRMI (the ‘‘Criticism’’). At all material times, Mr. Pang had raised his concern over the lending activity conducted by CRMI in numerous occasions, although his recommendations were not accepted. For the full details of this matter has been set out in the announcement of the Company dated 9 August 2019 and published on the websites of the Stock Exchange and the Company.

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PARTICULARS OF DIRECTORS FOR RE-ELECTION

APPENDIX II

Save as disclosed above, Mr. Pang is not related to any other Directors, member of the senior management, substantial shareholders or controlling shareholders of the Company and does not have any interest in the Shares within the meaning of Part XV of the SFO. As at the Latest Practicable Date, Mr. Pang does not have interest or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

Save as disclosed above, there is no other matter in relation to the re-election of Mr. Pang that needs to be brought to the attention of the Shareholders nor any information that is required to be disclosed pursuant to Rules 17.50(2)(h) to 17.50(2)(v) of the GEM Listing Rules.

GENERAL

Save as disclosed herein, all of the above Retiring Directors are not connected with any Directors, senior management, substantial Shareholders or controlling Shareholders of the Company or an associate of any of them nor they did not hold any directorship in any other listed companies on the Stock Exchange and any other stock exchange or other major appointments or professional qualifications during the three years preceding the Latest Practicable Date.

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NOTICE OF AGM

SANBASE CORPORATION LIMITED 莊 皇 集 團 公 司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 8501)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the annual general meeting (the ‘‘AGM’’) of Sanbase Corporation Limited 莊皇集團公司 (the ‘‘Company’’) will be held at 2:30 p.m., on Friday, 31 July 2020 at Portion 2, 12/F, The Center, 99 Queen’s Road Central, Hong Kong for the following purposes:

ORDINARY RESOLUTIONS

1. to receive and adopt the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors (the ‘‘Director(s)’’) and the independent auditor of the Company for the year ended 31 March 2020;

2. to consider and approve, each as a separate resolution, if thought fit, the following resolutions:

3. (a) to re-elect Mr. Wong Kin Kei as an executive Director;

4. (b) to re-elect Dr. Sung Tak Wing, Leo as an executive Director;

5. (c) to re-elect Mr. Cheung Chi Man, Dennis as an independent non-executive Director;

6. (d) to re-elect Mr. Chan Chi Kwong, Dickson as an independent non-executive Director;

7. (e) to re-elect Mr. Pang Chung Fai, Benny as an independent non-executive Director; and

8. (f) to authorise the board of Directors (the ‘‘Board’’) to fix the remuneration of the Directors;

9. to re-appoint Messrs. PricewaterhouseCoopers as the independent auditor of the Company for the year ending 31 March 2021 and authorise the Board to fix their remuneration;

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NOTICE OF AGM

As a special business, to consider and, if thought fit, pass with or without modifications the following resolutions as ordinary resolutions of the Company:

1. ‘‘THAT:

2. (a) subject to paragraph (c) below, and pursuant to the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’), a general mandate be and is hereby generally and unconditionally given to the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of US$0.001 each in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such powers;

3. (b) the approval in paragraph (a) above shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

4. (c) the aggregate number of shares allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to:

   • (i) a Right Issue (as hereinafter defined); or

   • (ii) the exercise of rights of subscription or conversion under the terms of any existing warrants, bonds, debentures, notes or other securities issued by the Company which carry rights to subscribe for or are convertible into shares of the Company; or

   • (iii) the exercise of any options granted under the share option scheme of the Company; or

   • (iv) any scrip dividend 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 articles of association of the Company (the ‘‘Articles’’) in force from time to time shall not exceed 20% of the total number of shares of the Company in issue at the date of the passing this resolution and the said approval shall be limited accordingly;

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NOTICE OF AGM

• (d) for the purpose of the following ordinary resolutions:

‘‘Relevant Period’’ means the period from the date of the 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 Articles, or any other applicable laws to be held; and

• (iii) the passing of an ordinary resolution by the shareholders in general meeting revoking or varying the authority given to the Directors by this resolution.

‘‘Rights Issue’’ means an offer of shares or issue of options, warrants or other securities giving rights to subscribe for shares of the Company open for a period fixed by the Directors to holders of shares on the register of members of the Company on a fixed record date in proportion to their holdings of shares of the Company (subject to such exclusion or other arrangements as the Directors 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 applicable to the Company).’’

1. ‘‘THAT:

2. (a) subject to paragraph (b) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares on GEM or any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for such purpose, in accordance with the rules and regulations of the Securities and Futures Commission of Hong Kong, the Stock Exchange or of any other stock exchange as amended from time to time and all applicable laws in this regard, be and is hereby generally and unconditionally approved;

3. (b) the total number of shares of the Company which may be repurchased by the Company pursuant to the approval in paragraph (a) above during the Relevant Period shall not exceed 10% of the total number of the issued share of the Company as at the date of the passing of this resolution and the authority pursuant to paragraph (a) above shall be limited accordingly; and

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NOTICE OF AGM

• (c) for the purpose of this resolution:

‘‘Relevant Period’’ means the period from the date of the 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 Articles, or any other applicable laws to be held; and

• (iii) the passing of an ordinary resolution by the shareholders in general meeting revoking or varying the authority given to the Directors by this resolution.

• ‘‘THAT:

conditional upon to the passing of resolution nos. 4 and 5 above, the general mandate granted to the Directors and for the time being in force to exercise the power of the Company to allot, issue and otherwise deal with shares pursuant to the said resolution no. 4 be and is hereby extended by the addition thereto of the total number of shares repurchased by the Company under the authority granted pursuant to the said resolution no. 5, provided that such number of shares so repurchased shall not exceed 10% of the total number of the share of the Company in issue as at the date of the passing of the said resolution no. 5.’’

By order of the Board Sanbase Corporation Limited Wong Sai Chuen Chairman, Chief Executive Officer and Executive Director

Hong Kong, 30 June 2020

Registered Office: 4th Floor, Harbour Place 103 South Church Street P.O. Box 10240 Grand Cayman KY1-1002 Cayman Islands

Principal Place of Business in Hong Kong: 16/F, Loon Kee Building 267-275 Des Voeux Road Central Hong Kong

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NOTICE OF AGM

Notes:

1. All resolutions at the AGM must be taken by poll (except where the chairman decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands) pursuant to the GEM Listing Rules. The results of the poll will be published on the GEM website at www.hkgem.com and the Company’s website at www.sclhk.com in accordance with the GEM Listing Rules.

2. Any shareholder of the Company entitled to attend and vote at the AGM is entitled to appoint another person (who must be an individual) as his proxy to attend and vote instead of him and a proxy so appointed shall have the same right as the shareholder to speak at the meeting. A shareholder of the Company who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the meeting. If more than one proxy is appointed, the number of shares of the Company in respect of which each such proxy so appointed must be specified in the relevant proxy form. A proxy need not be a shareholder of the Company.

3. To be valid, a proxy form, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority, must be deposited at the Company’s Hong Kong branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 48 Hours before the time appointed for holding the AGM or any adjourned meeting and in default thereof the proxy form shall not be treated as valid.

4. Delivery of an instrument appointing a proxy shall not preclude a shareholder from attending and voting in person at the AGM and in such event, the instrument appointing a proxy shall be deemed to be revoked.

5. Where there are joint registered holders of any share, any one of such persons may vote at the AGM, either in person or by proxy, in respect of such shares as if he was solely entitled thereto; but if more than one of such joint registered holders be present at the AGM either personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

6. To ascertain the entitlement of shareholders of the Company to attend and vote at the AGM, the transfer books and register of members of the Company will be closed from Tuesday, 28 July 2020 to Friday, 31 July 2020 (both days inclusive), during of which no transfer of shares will be effected. In order to qualify for attending and voting at the AGM, all transfer documents accompanied by the relevant share certificates must be lodged for registration with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 27 July 2020.

7. If Typhoon Signal No. 8 or above, or a ‘‘black’’ rainstorm warning is in effect any time after 12:00 noon on the date of the AGM, the meeting will be postponed. The Company will publish an announcement on the GEM website at www.hkgem.com and the Company’s website at www.sclhk.com to notify shareholders of the Company of the date, time and place of the rescheduled meeting.

8. Taking into account of the recent development of the epidemic caused by novel coronavirus (COVID-19) pneumonia, the Company will implement the following prevention and control measures at the AGM against the epidemic to protect the Shareholders from the risk of infection:- (i) Every Shareholder or proxy is required to wear surgical facial mask throughout the meeting; and (ii) No refreshment will be served. Furthermore, the Company wishes to advise the Shareholders, particularly Shareholders who are subject to quarantine in relation to COVID19, that they may appoint the chairman of the meeting as a proxy to vote on the resolution, instead of attending the meeting in person.

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