Sino Splendid Holdings Limited — Proxy Solicitation & Information Statement 2001

Mar 25, 2001

IMPORTANT

The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant, or other professional adviser.

If you have sold all your shares in hongkong.com Corporation, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

This circular, for which the directors (“ Directors ”) of hongkong.com Corporation (the “ Company ”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange for the purpose of giving information with regard to the Company. The Directors of the Company having 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; (ii) there are no other matters the omission of which would make any statement in this circular 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.

**HONGKONG.COM CORPORATION ***

(Incorporated in the Cayman Islands with limited liability)

GENERAL MANDATES TO ISSUE AND

REPURCHASE SECURITIES

The notice convening the annual general meeting of the Company to be held at 34th Floor, Citicorp Centre, 18 Whitfield Road, Causeway Bay, Hong Kong, on Wednesday, 25th April, 2001, at 11:00 a.m. is set out on pages 63 to 66 of the annual report the Company for the financial year ended 31st December 2000 (the “ Annual Report 2000 ”).

A form of proxy for the annual general meeting is enclosed with the Annual Report 2000. Whether or not you intend to be present at the annual general meeting, you are requested to complete the form of proxy and return it to the branch share registrar of the Company, that is Central Registration Hong Kong Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the meeting. The completion of a form of proxy will not preclude you from attending and voting at the meeting in person.

This circular will remain on the GEM website on the “Latest Company Announcements” page for 7 days from the date of its posting and the website of the Company at www.corp.hongkong.com.

• For identification only

23rd March, 2001

LETTER FROM THE CHAIRMAN

HONGKONG.COM CORPORATION

*

(Incorporated in the Cayman Islands with limited liability)

Executive Directors: Ch’ien Kuo Fung, Raymond (Chairman) Yip Hak Yung, Peter (Vice-Chairman) Zhou Shun Ao (Vice-Chairman) Chan Kai Yu, Rudy (Chief Executive Officer) Hamilton, Peter John Hung Shuk Tak, Vicky Lin, Jack

Non-Executive Directors: Chan Wing Tak, Douglas Edelson, Harry

Registered Office: Huntlaw Building P O Box 2804 George Town Grand Cayman Cayman Islands

Principal Place of Business: 24th Floor, Citicorp Centre 18 Whitfield Road Causeway Bay Hong Kong

Independent Non-Executive Directors: Chou Kei Fong, Silas Koh Boon Hwee Wong Sin Just

23rd March, 2001

To Shareholders of the Company

Dear Sir or Madam,

GENERAL MANDATES TO ISSUE AND REPURCHASE SECURITIES

THE GENERAL MANDATES

On 25th February, 2000, resolutions were passed by the then sole shareholder of the Company giving general unconditional mandates (“ General Mandates ”) to the directors of the Company to:—

• (a) allot, issue and deal with securities of the Company not exceeding 20% of the aggregate of the total nominal value of the share capital of the Company in issue immediately following completion of the issue of the Bonus Shares (as defined in the Prospectus, as defined below) and the Placing (as defined in the Prospectus, as defined below) (together the “ Share Placing ”), and including, where applicable, the shares issued pursuant to the exercise of the over allotment option (“ Over Allotment ”) referred to in the prospectus (“ Prospectus ”) of the Company dated 28th February, 2000 (“ Allotment Mandate ”);

• For identification only

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LETTER FROM THE CHAIRMAN

• (b) to repurchase securities not exceeding 10% of the aggregate of the total nominal value of the share capital of the Company in issue after completion of the Share Placing and the Over Allotment (“ Repurchase Mandate ”); and

• (c) add to the Allotment Mandate for issuing securities set out in (a) above the number of securities repurchased by the Company pursuant to the Repurchase Mandate set out in (b) above.

The General Mandates will expire at the conclusion of the forthcoming annual general meeting of the Company convened for the financial year ended 31st December, 2000 (“ Annual General Meeting ”) to be held on Wednesday, 25th April, 2001 and the purpose of this circular is to request your support to renew the General Mandates at the Annual General Meeting.

EXPLANATORY STATEMENT

An explanatory statement containing all relevant information relating to the Repurchase Mandate and pursuant to the Rules Governing the Listing of Securities on the Growth Enterprise Market (the “GEM”) of the Stock Exchange, in particular Rule 13.08, set out in the Appendix to this circular. The information in the explanatory statement is to provide you with the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolutions relating to the Repurchase Mandate.

ANNUAL GENERAL MEETING

A notice of the Annual General Meeting to be held at 34th Floor, Citicorp Centre, 18 Whitfield Road, Causeway Bay, Hong Kong on Wednesday, 25th April, 2001, at 11:00 a.m. is set out on pages 63 to 66 of the Annual Report 2000. Resolutions 4A to 4C relate to the General Mandates and will be proposed as ordinary resolutions at the Annual General Meeting for your consideration and approval.

A form of proxy for the Annual General Meeting is enclosed with the Annual Report 2000. Whether or not you intend to be present at the Annual General Meeting, you are requested to complete the form of proxy and return it to the branch share registrar of the Company, that is Central Registration Hong Kong Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the meeting. The completion of a form of proxy will not preclude you from attending and voting at the meeting in person.

RECOMMENDATION

The Board of Directors is of the opinion that the proposals referred to in this circular are in the best interests of the Company and its shareholders and recommend all shareholders to vote in favor of the resolutions relating to the General Mandates to be proposed at the Annual General Meeting as they intend to do themselves in respect of their own shareholdings, if any.

Yours faithfully, Dr. Ch’ien Kuo Fung, Raymond Chairman

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EXPLANATORY STATEMENT

APPENDIX

This is an explanatory statement given to all shareholders relating to a resolution to be proposed at the Annual General Meeting authorizing the Repurchase Mandate.

This explanatory statement contains all the information required pursuant to Rule 13.08 and other relevant provisions of the Rules Governing the Listing of Securities on the GEM (the “GEM Listing Rules”) which are set out as follows:

1. REGULATIONS OF THE GEM LISTING RULES

(a) Shareholders’ approval

All repurchase of securities on the GEM by a company listing on the GEM must be approved in advance by an ordinary resolution, either by way of general mandate or by specific approval in relation to specific transactions.

(b) Source of funds

Any repurchase must be financed out of funds legally available for the purpose in accordance with the Company’s memorandum and articles of association and the applicable laws of the Cayman Islands.

(c) Trading restrictions

The securities to be repurchased by a company must be fully paid up. A company is authorized to repurchase on the GEM or on any other stock exchange recognized for this purpose by the Securities and Futures Commission in Hong Kong and the Stock Exchange the total number of shares which represent up to a maximum of 10% of the existing issued share capital of that company or warrants to subscribe for or purchase shares in the company representing up to 10% of the amount of warrants then outstanding at the date of the passing of the relevant resolution granting the repurchase mandate. A company may not issue or announce a proposed issue of new securities of the type that has been repurchased for a period of 30 days immediately following a repurchase of securities whether on the GEM or otherwise (expect pursuant to an exercise of warrants, share options or similar instruments requiring the company to issue securities which were outstanding prior to such repurchase) without the prior approval of the Stock Exchange. A company is also prohibited from making securities repurchases on the GEM if the result of the repurchase would be that the number of that Company’s listed securities which are in the hands of the public would fall below the relevant prescribed minimum percentage for that company as determined by the Stock Exchange. A company may only purchase securities on the GEM if (1) the purchase price is not higher than the latest (or current) independent bid price or the last independent sale (contract) price quoted or reported on the system (as defined in the Rules of the Stock Exchange), whichever is higher; and (2) the company has not made the opening bid nor any bid in the last 30 minutes before the close of normal trading hours as stipulated in the Rules of the Stock Exchange.

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EXPLANATORY STATEMENT

APPENDIX

(d) Status of repurchased securities

The listing of all repurchased securities (whether on the GEM or otherwise) is automatically cancelled and the relative certificates must be cancelled and destroyed. Under Cayman Islands law, a company’s repurchased securities shall be treated as cancelled and the amount of the company’s issued share capital shall be reduced by the aggregate nominal value of the repurchased securities accordingly although the authorized share capital of the company will not be reduced.

(e) Suspension of repurchase

A company shall not repurchase its own securities after a price-sensitive development has occurred or has been the subject of a decision until the price-sensitive information is made publicly available. In particular, during the period of one month immediately preceding either the preliminary announcement of a company’s annual results or the publication of the company’s half-yearly report or quarterly report, a company may not repurchase its securities on the GEM unless the circumstances are exceptional. In addition, the Stock Exchange may prohibit repurchases of securities on the GEM if a company has breached the GEM Listing Rules.

(f) Reporting requirements

Repurchases of securities on the GEM or otherwise must be reported to the Stock Exchange not later than 9:30 a.m. (Hong Kong time) on the following business day. In addition, a company’s annual report and accounts are required to include a monthly breakdown of securities repurchases made during the financial year under review, showing the number of securities repurchased each month (whether on the GEM or otherwise), the purchase price per share or the highest and lowest prices paid for all such repurchases and the total prices paid. The directors’ report is also required to contain reference to the repurchases made during the year and the directors’ reasons for making such repurchases. The company shall make arrangements with its broker who effects the repurchase to provide the company in a timely fashion the necessary information in relation to the purchase made on behalf of the company to enable the company to report to the Stock Exchange. A company shall procure that any broker appointed by it to effect the repurchase of securities shall disclose to the Stock Exchange such information with respect to repurchases made on behalf of the company as the Stock Exchange may request.

(g) Connected parties

Under the GEM Listing Rules, a company shall not knowingly repurchase securities from a connected person (as defined under the GEM Listing Rules) and a connected person shall not knowingly sell his securities to the company.

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EXPLANATORY STATEMENT

APPENDIX

As at 20th March, 2001, being the latest practicable date prior to the printing of this circular (the “Latest Practicable Date”) and to the best of the knowledge of the Directors having made all reasonable enquiries, none of the Directors or their respective associates (as defined in the GEM Listing Rules) has a present intention, in the event that the Repurchase Mandate is approved by the Shareholder, to sell securities to the Company.

2. EXERCISE OF THE REPURCHASE MANDATE

Exercise in full of the Repurchase Mandate, on the basis of 4,096,000,000 shares in issue as at the Latest Practicable Date could result in up to 409,600,000 shares being repurchased by the Company during the period from the passing of Resolution No. 4B as set out in the notice of the Annual General Meeting up to (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 of association of the Company or any applicable laws to be held; or (iii) the revocation, variation or renewal of the Repurchase Mandate by ordinary resolution of the Company’s shareholders in general meeting, whichever occurs first.

3. REASONS FOR REPURCHASES

Repurchases of securities will only be made when the Directors believe that such repurchases will benefit the Company and the Company’s shareholders. 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.

4. FUNDING OF REPURCHASES

In repurchasing securities, the Company may only apply funds legally available for such purpose in accordance with its memorandum and articles of association and the applicable laws of the Cayman Islands. The Company may not repurchase its own securities on the 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.

5. GENERAL

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 2000) in the event that the Repurchase Mandate is exercised in full. However, the Directors do not propose 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 on the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

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EXPLANATORY STATEMENT

APPENDIX

6. 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 memorandum and articles of association of the Company and the applicable laws of the Cayman Islands.

7. THE HONG KONG CODE ON TAKEOVERS AND MERGERS

If as a result of a repurchase of securities, 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 the Hong Kong Code on Takeovers and Mergers (the “Code”). As a result, a shareholder, or a group of shareholders acting in concert (within the meaning under the 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 Code.

As at the Latest Practicable Date, chinadotcom corporation, which is a substantial shareholder of the Company, held approximately 82.08% of the securities issued by the Company. In the event that the Directors exercise in full the power to repurchase securities in accordance with the terms of the ordinary resolution to be proposed at the Annual General Meeting, the total interests of chinadotcom corporation in the Company’s securities would be increased to approximately 91.20% of the aggregate nominal value of the Company in issue shares and chinadotcom corporation will not be obliged to make a mandatory offer under Rule 26 of the Code in this aspect.

However, as the minimum amount of securities to be held by the public cannot be less than 15% of the issued securities of the Company, the Directors do not intend to exercise in full the power to repurchase securities under the Repurchase Mandate.

8. SECURITIES REPURCHASE MADE BY THE COMPANY

No repurchases of securities have been made by the Company in the previous twelve months since the listing of the Company’s securities on the GEM on 9th March, 2000, whether on the Stock Exchange or otherwise.

9. CONNECTED PERSON

No connected person (as defined in the GEM Listing Rules) has notified the Company that it has a present intention to sell shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by the shareholders.

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EXPLANATORY STATEMENT

APPENDIX

10. SHARE PRICES

The highest and lowest prices at which the Company’s shares were traded on the GEM during each of the previous 12 months since listing of the Company’s shares on the GEM on 9th March, 2000 are as follows:—

	Highest	Lowest
	HK$	HK$
2000
March	9.100	2.225
April	2.275	1.070
May	2.025	1.200
June	1.480	1.020
July	1.170	0.850
August	0.970	0.740
September	0.900	0.550
October	0.620	0.355
November	0.620	0.420
December	0.500	0.375
2001
January	0.500	0.370
February	0.450	0.380

11. PROXY

A form of proxy for use at the Annual General Meeting is enclosed with the Annual Report 2000. Whether or not you intend to attend the meeting, shareholders are requested to complete and return the form of proxy to the branch share registrar and transfer office of the Company in Hong Kong, that is Central Registration Hong Kong Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the Annual General Meeting should the shareholders so desire.

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