Tingyi (Cayman Islands) Holding Corp. — Proxy Solicitation & Information Statement 2005

Sep 29, 2005

THIS CIRCULAR IS SOLELY FOR YOUR INFORMATION AND YOU ARE ADVISED TO READ AND NOTE THE CONTENTS OF THIS CIRCULAR

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representations 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, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional advisor.

If you have sold or transferred all your shares in Johnson Electric Holdings Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser.

JOHNSON ELECTRIC HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 179)

DISCLOSEABLE TRANSACTION

ACQUISITION OF PARLEX CORPORATION

29 September 2005

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Chairman. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix – Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

DEFINITIONS

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

• “Acquisition” the acquisition of all the issued and outstanding shares of Parlex by the Company through its wholly-owned subsidiaries

• “associate(s)” has the meaning ascribed thereto in the Listing Rules “Company” Johnson Electric Holdings Limited, a company incorporated in Bermuda with limited liability and whose shares are listed on the Stock Exchange

• “Directors” the directors of the Company “J.E.C. Electronics Sub One Inc.” J.E.C. Electronics Sub One Inc., a Massachusetts corporation and an indirect wholly-owned subsidiary of the Company. Its principal business activity is investment holding

• “J.E.C. Electronics Sub Two Inc.” J.E.C. Electronics Sub Two Inc., a Massachusetts corporation and a wholly-owned subsidiary of J.E.C. Electronics Sub One Inc. Its principal business activity is investment holding

• “Johnson Electric Group” the Company and its subsidiaries “Latest Practicable Date” 26 September 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

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

• “Merger Agreement” the merger agreement in relation to the Acquisition of all the issued and outstanding shares of Parlex by the Company through its wholly-owned subsidiaries

• “Multilayer” the multilayer flexible printed circuit board operations of Parlex. In a separate transaction, Parlex has agreed to divest certain assets of the multilayer operation to Amphenol Corporation

• “Parlex” Parlex Corporation, a company organised in Massachusetts, U.S.A. and whose shares are listed on The NASDAQ Stock Market

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DEFINITIONS

“SFO”	The Securities and Futures Ordinance (Chapter 571 of
	the Laws of Hong Kong)
“Shareholders”	registered holders of the Shares in issue
“Shares”	shares of HK$0.0125 each in the share capital of the
	Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“US$”	United States Dollars

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LETTER FROM THE CHAIRMAN

JOHNSON ELECTRIC HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 179)

Non-Executive Directors: Wang Koo Yik Chun (Honorary Chairman) Peter Suart Allenby Edwards Patrick Blackwell Paul Arkadi Kuhlmann Oscar De Paula Bernardes Neto Michael John Enright Laura May-Lung Cha Peter Wang Kin Chung

Executive Directors:

Patrick Wang Shui Chung (Chairman & Chief Executive) Winnie Wang Wing Yee (Vice Chairman) Richard Wang Li-Chung

• Independent Non-Executive Director

Registered Office:

Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Principal place of business in Hong Kong: Johnson Building 6-22 Dai Shun Street Tai Po Industrial Estate New Territories Hong Kong

29 September 2005

ACQUISITION OF PARLEX CORPORATION DISCLOSEABLE TRANSACTION

To the Shareholders,

Dear Sir or Madam,

INTRODUCTION

On 18 August 2005, the Company and certain indirect wholly-owned subsidiaries entered into a definitive Merger Agreement to acquire Parlex Corporation, a company organized under the laws of Massachusetts, U.S.A., and listed on The NASDAQ Stock Market.

The Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The purpose of this circular is to give you further details of the Acquisition and other information prescribed by the Listing Rules.

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LETTER FROM THE CHAIRMAN

THE MERGER AGREEMENT

The Merger Agreement dated 18 August 2005 contains, inter alia, terms set out below:

Parties:

The Company, J.E.C. Electronics Sub One Inc., J.E.C. Electronics Sub Two Inc., and Parlex.

Terms:

Under the Merger Agreement, the Company, through its indirect wholly-owned subsidiaries J.E.C. Electronics Sub One Inc. and J.E.C. Electronics Sub Two Inc., will acquire all the issued and outstanding shares of common stock of Parlex for US$6.75 per share in cash. There are no restrictions regarding the subsequent sale of Parlex and/or its shares of common stock.

Separately, Parlex has also announced that it has entered into an agreement to divest certain assets of its loss-making Multilayer operation to a division of Amphenol Corporation.

Consideration:

The cash consideration for the shares of common stock of Parlex amounts to US$43.8 million. In addition, the Company will redeem the outstanding preferred stock at its aggregate par value of US$3.25 million. The total cash consideration is due on completion and is expected to be financed from Johnson Electric Group’s internal cash reserves. In addition, the Johnson Electric Group will assume Parlex’s existing net debt of US$27.5 million, which includes approximately US$8 million of debt obligations associated with a lease on a property where the Multilayer operation is presently located.

Conditions:

Completion of the Acquisition is subject to certain conditions, including approval by Parlex shareholders, various regulatory approvals, and certain other customary closing conditions.

Completion:

Completion of the Acquisition is presently expected to take place during the fourth quarter of 2005.

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LETTER FROM THE CHAIRMAN

INFORMATION ON PARLEX

Parlex is a global provider of flexible interconnect solutions to a wide range of endmarket applications, including automotive components, home appliances, telecommunications, computers and business equipment, medical devices, and electronic identification. Its product offerings include flexible circuits, polymer thick-film circuits, flexible interconnect hybrid circuits, laminated cable, and flexible interconnect assemblies. Its primary manufacturing facilities are in the People’s Republic of China, the United States of America, and the United Kingdom.

On 15 September 2005 Parlex announced its preliminary results for the financial year ended 30 June 2005. In these results, which are unaudited, the Multilayer operations of Parlex that are presently in the process of being divested have been accounted for as discontinued operations for financial reporting purposes.

Revenues from Parlex’s continuing operations (which exclude the Multilayer operations) for the year ended 30 June 2005 were US$105.9 million compared to US$83.5 million for the same period in the previous year. Operating income from continuing operations for the year ended 30 June 2005 was US$2.6 million compared to US$2.2 million in the prior year.

After interest payments of US$3.1 million Parlex reported a pre-tax loss from continuing operations of US$556,422 for the year ended 30 June 2005 compared to a pretax loss from continuing operations of US$327,446 for the same period in the prior year. After tax and minority interests, Parlex reported a loss from continuing operations of US$843,336 compared to a loss from continuing operations of US$427,825 for the same period in the prior year. As at 30 June 2005, Parlex had total assets of US$93.6 million (including approximately US$2.8 million in current assets held for sale as part of the divestment of the Multilayer operation). As at 30 June 2005, Parlex had stockholders’ equity of approximately US$38 million. This stockholders’ equity figure is prior to any adjustments that may be required as a result of the Multilayer divestment that is presently ongoing and therefore means that an adjusted net book value excluding the Multilayer operation is presently unavailable.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Parlex is a third party independent of the Company and its connected persons (as defined in the Listing Rules).

REASONS FOR AND EFFECTS OF THE ACQUISITION

The Company is among the world’s leading producers of micro motors and integrated motor systems serving automotive and commercial customers worldwide. The Company considers the Acquisition of Parlex to be consistent with its strategy of strengthening its capabilities in electronics and investing in businesses adjacent to its core motor systems operations that offer above average growth prospects.

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LETTER FROM THE CHAIRMAN

Among the factors that the Company considers relevant in its Acquisition of Parlex

are:

• Electronics are becoming an increasingly important factor in many of the Johnson Electric Group’s end-user markets and in the range of motor systems it supplies. The Johnson Electric Group intends to utilize Parlex’s expertise in interconnection technology and electronics assembly capabilities in the development of its own motor systems business.

• A significant proportion of Parlex’s existing revenues are derived from customers that are also customers of the Johnson Electric Group. The acquisition therefore presents an opportunity to provide customers with new “motion” system product solutions that draw on the expertise and technology of the combined businesses.

• Johnson Electric Group expects to be able to assist Parlex in extending its market penetration in customer segments where the Johnson Electric Group has a strong existing presence, including automotive components, home appliances, and business equipment.

The consideration was agreed between the parties after arm’s length negotiations, taking into account a due diligence process undertaken by the Company and its advisors. Many factors were taken into account including the cash flow and earnings of the business of Parlex to be acquired and an assessment of its future growth potential. The Directors consider that the terms of the Acquisition are fair and reasonable and the Acquisition is in the interests of the Company and the shareholders as a whole.

Upon completion, Parlex will become an indirect wholly-owned subsidiary of the Company and will cease to be listed on the NASDAQ Stock Market. The results, assets and liabilities of Parlex will be consolidated into the financial statements of the Company. The Company is presently reviewing the potential for all or part of the assumed debt associated with the Acquisition to be restructured or refinanced following completion. This fact, along with the ongoing divestment of the Multilayer operations and negotiations related to certain property leases, therefore means that it is presently not possible to meaningfully estimate the effect of the Acquisition on the overall assets and liabilities of the Company.

GENERAL

Your attention is drawn to the appendix of this circular which contains certain additional information in relation to the Company.

Yours faithfully,

Patrick Wang Shui Chung

Chairman

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APPENDIX

ADDITIONAL INFORMATION

1. 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 for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement in this circular misleading.

2. DISCLOSURE OF INTERESTS

A. Interests of Directors and Chief Executive

As at the Latest Practicable Date, the directors and chief executive of the Company had the following interests in the Shares of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Division 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), the Model Code for Securities Transactions by Directors of Listed Companies of Listed Companies and which are required to be entered in the register required to be kept under section 352 of the SFO:–

	Shares of the Company	Shares of the Company
	of HK$0.0125 each
	Personal	Other
Name	Interests	Interests
Wang Koo Yik Chun	–	2,183,600,640
		(Notes a & b)
Peter Stuart Allenby Edwards	–	100,000
		(Note c)
Patrick Blackwell Paul	50,000	–
Notes

• a. These shares are held, directly or indirectly, by the trustees of various trusts associated with the Wang family.

• b. Duplications of shareholdings occur among and between the parties shown below under the Section B Interests of Shareholders Discloseable Pursuant to the SFO.

• c. These shares are held under a trust of which Peter Stuart Allenby Edwards is one of the beneficiaries.

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APPENDIX

ADDITIONAL INFORMATION

B. Interests of Shareholders Discloseable Pursuant to the SFO

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, had an interest or short position in the Shares of the Company which would fall to be disclosed to the Company under the provision of Divisions 2 and 3 of Part XV of the SFO:-

		Number of	Approximate %
Name of Shareholder	Capacity	Shares held	of shareholding
Ms. Wang Koo Yik Chun	Beneficiary of	2,135,600,640	58.13
	Family trusts	(Notes a & b)
HSBC International Trustee	Trustee	947,282,000	25.78
Limited		(Notes a & c)
Ansbacher (Bahamas) Limited	Trustee	887,040,000	24.15
		(Note a)
Bermuda Trust (Guernsey)	Trustee	358,972,480	9.77
Limited		(Note a)
Ceress International	Trustee	223,014,080	6.07
Investment Corporation		(Note d)
Merriland Overseas Limited	Trustee	211,943,040	5.77
		(Note e)

Notes

• a. The shares in which Ansbacher (Bahamas) Limited and Bermuda Trust (Guernsey) Limited were interested and 937,588,160 of the shares in which HSBC International Trustee Limited was interested were held, directly or indirectly, by them as the trustees of various trusts associated with the Wang family and are included in the shares in which Ms. Wang Koo Yik Chun was interested as referred to above under Interests of Directors and Chief Executive in Section A.

• b. The shares in which Ms. Wang Koo Yik Chun was interested as referred to above formed part of the shares referred to in Note a.

• c. 941,500 of the shares in which HSBC International Trustee Limited was interested were held through HSBC Trustee (Hong Kong) Limited.

• d. The interests of Ceress International Investment Corporation in the Company were duplicated by the interests in the Company held by Bermuda Trust (Guernsey) Limited.

• e. The interests of Merriland Overseas Limited in the Company were duplicated by the interests in the Company held by HSBC International Trustee Limited.

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APPENDIX

ADDITIONAL INFORMATION

C. Substantial Shareholders in Other Members of the Company

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company, or his/her respective associates(s)) who, as at the Latest Practicable Date, was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of Johnson Electric Group:-

Name of Company	Name of Shareholder	%
Nanomotion Ltd.	Offritage Trustees Ltd	42.40
Parlex Corporation_(a)_	Van Den Berg Management Inc.	14.94
	DBA Century Management
Saia-Burgess Electronics	Sumida Corporation	24.50
Holding AG_(b)_

Notes:

• (a) Upon completion of the Acquisition, the Company, through its indirectly wholly-owned subsidiaries, will own all of the issued and outstanding shares of Parlex and, at which point, Van Den Berg Management Inc. DBA Century Management will cease to be directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying any rights to vote in all circumstances at general meetings of any member of the Johnson Electric Group.

• (b) On 26 August 2005, the Company announced a public tender offer (the “Transaction”) for the entire issued share capital (other than treasury shares) of Saia-Burgess Electronic Holdings AG (“Saia-Burgess”). The Transaction has not yet been completed and there is no guarantee the Transaction will be completed. If Sumida Corporation (“Sumida”) tenders its interest in SaiaBurgess and the Transaction is completed, Sumida would not be directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying any rights to vote in all circumstances at general meetings of any member of the Johnson Electric Group. The Transaction is not dependent on the tender by Sumida of its interests in Saia-Burgess. If the Transaction completes and Sumida does not tender its interests in Saia-Burgess, Sumida would be directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying any rights to vote in all circumstances at general meetings of a member of the Johnson Electric Group. If the Transaction is not completed, Saia-Burgess would not be a subsidiary of the Company and Sumida would not be directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying any rights to vote in all circumstances at general meetings of any member of the Johnson Electric Group.

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has entered into or proposes to enter into any service contract with the Company or any of its subsidiaries which does not expire or is not terminable within one year without payment of compensation (other than statutory compensation).

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APPENDIX

ADDITIONAL INFORMATION

4. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors nor their respective associates had interests in any business which competes or is likely to compete, either directly or indirectly, with any business of the Johnson Electric Group.

5. LITIGATION

In August 2001, a claim for damages was made in the Lowndes County Circuit Court in Mississippi against a subsidiary of Johnson Electric Group and over ten other third party defendants for personal injury and property damage in a Lawsuit pertaining to environmental contamination involving an automotive parts manufacturing facility in Columbus, Mississippi, USA which was purchased in 1999 and closed down in November 2001. No amount of damages was specified in the complaint.

On or about 30 December 2002, counsel representing the plaintiffs in the abovedescribed lawsuit filed additional complaints in the Lowndes County Circuit Court on behalf of approximately 1,000 plaintiffs against the same subsidiary of Johnson Electric Group and the same co-defendants named in the above-described case. The new complaints raise allegations similar to the above-described complaint. On or about 9 September 2003, the claims against the subsidiary of Johnson Electric Group were dismissed without prejudice for lack of service of process. During February and March 2004, plaintiffs filed amended complaints in these actions which were answered by the subsidiary of Johnson Electric Group.

In 2004, seven new actions were filed in the Lowndes County Circuit Court on behalf of over 100 plaintiffs against similar defendants as in the pending actions. Plaintiffs in the new actions are represented by different counsel but their complaints raise similar allegations. These complaints name the same subsidiary as in the above-described lawsuits and also name Johnson Electric Holdings Limited, which has contested personal jurisdiction in these actions.

In August 2004, counsel for plaintiffs in all of the actions informed the Special Master assigned to handle pre-trial proceedings of their intention to withdraw plaintiffs’ personal injury claims and to proceed with property damage and punitive damages claims on behalf of a subset of plaintiffs who, to date, remain unidentified. Notwithstanding the foregoing, the personal injury claims have not yet been dismissed.

These actions were recently re-assigned to a new judge who set a tentative trial date of March 2006. At this time there has been no decision as to which cases or claims will be tried if trial should commence on that date.

Johnson Electric Group is vigorously defending all actions on behalf of the subsidiary of Johnson Electric Group and has asserted that the Mississippi state court lacks personal jurisdiction over the Company in the newly filed actions. In addition, Johnson Electric Group has asserted claims for indemnity against prior owners. Because discovery is still ongoing, Johnson Electric Group is unable at this time to predict with certainty the ultimate outcome of this litigation.

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APPENDIX

ADDITIONAL INFORMATION

6. GENERAL

• (a) The secretary of the Company is Ms. Susan Yip Chee Lan, an associate member of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Company Secretaries.

• (b) The qualified accountant of the Company is Mr. Wesley Chan Chi Tat, a Certified Public Accountant and a fellow member of The Association of Chartered Certified Accountants.

• (c) The principal share registrar of the Company is The Bank of Bermuda Limited at Bank of Bermuda Building, 6 Front Street, Hamilton HM11, Bermuda and its branch share registrar is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (d) The English text of this circular will prevail over the Chinese text.

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