VSTECS Holdings Limited — Proxy Solicitation & Information Statement 2008

Apr 30, 2008

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in VST 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 or the transferee.

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

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(Stock Code: 856)

REFRESHMENT OF GENERAL MANDATE

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the board of directors of VST Holdings Limited is set out on page 8 of this circular.

A notice convening the extraordinary general meeting of VST Holdings Limited to be held at 10:30 a.m. on 19 May 2008 at the Dynasty Club (Address: 7th Floor, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong), is set out on pages 16 to 17 of this circular. If you are unable to attend the extraordinary general meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon. In order to be valid, the proxy form must be deposited by hand or post to the Company’s Hong Kong branch share registrar, Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong, not less than 48 hours before the time appointed for holding the extraordinary general meeting or adjourned meeting or not less than 24 hours before the time appointed for taking the poll (as the case may be). If the proxy form is signed by a person under a power of attorney or other authority, a notarially certified copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude you from subsequently attending and voting at the extraordinary general meeting or any adjournment thereof should you so wish.

• for identification purpose only

2 May 2008

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16

– i –

DEFINITIONS

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

“AGM”	the annual general meeting of the Company held on 31
	August 2007 for the Shareholders to approve, inter alia,
	the Current General Mandate
“Articles”	the existing Articles of Association of the Company as
	may be amended from time to time
“associates”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors
“Company”	VST Holdings Limited, a company incorporated in the
	Cayman Islands with limited liability, the issued shares of
	which are listed on the main board of the Stock Exchange
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“controlling shareholder(s)”	has the meaning ascribed to it under the Listing Rules
“Current General Mandate”	the general mandate approved by the Shareholders at the
	AGM to grant to the Directors general authority to allot
	and issue Shares not exceeding 20% of the issued share
	capital of the Company as at the date of AGM
“Directors”	the directors of the Company from time to time
“EGM”	the extraordinary general meeting of the Company to be
	convened and held on 19 May 2008 to consider and, if
	thought fit, approve the ordinary resolution contained in
	the notice of the meeting which are set out on pages 16 to
	17 of this circular
“Group”	the Company and its subsidiaries
“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
“Independent Board Committee”	an independent board committee of the Board,
	comprising the independent non-executive Directors,
	formed to advise the Independent Shareholders as to,
	inter alia, the fairness and reasonableness of the grant of
	the New General Mandate

– 1 –

DEFINITIONS

“Independent Financial Adviser”	OSK Asia Capital Limited, a licensed corporation to
	conduct type 1 (dealing in securities) and type 6
	(advising on corporate finance) regulated activities for
	the purpose of the SFO and appointed as the independent
	financial adviser to the Independent Board Committee
	and the Independent Shareholders in respect of the grant
	of the New General Mandate
“Independent Shareholders”	the Shareholders other than Mr. Li Jialin and his
	associates
“Latest Practicable Date”	28 April 2008, being the latest practicable date prior to
	the printing of this circular for ascertaining certain
	information contained in this circular
“Listing Rules”	the Rules governing the Listing of Securities on the Stock
	Exchange of Hong Kong Limited
“New General Mandate”	the general mandate proposed to be granted to the
	Directors at the EGM to allot and issue Shares not
	exceeding 20% of the issued share capital of the
	Company as at the date of passing the resolution at the
	EGM
“Placing”	the placing and top-up subscription of 186,000,000
	Shares pursuant to the terms of the placing agreement and
	the top-up subscription agreement, both dated 10 October
	2007, as announced by the Company on 11 October 2007
“SFO”	the Securities and Futures Ordinance, Chapter 571 of the
	laws of Hong Kong
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of
	the Company
“Shareholder(s)”	holder(s) of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“%”	per cent.

– 2 –

LETTER FROM THE BOARD

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(Stock Code: 856)

Executive Directors: Mr. Li Jialin (Chairman) Mr. William Choo Mr. Tay Eng Hoe

Registered office:

Cricket Square, Hutchins Drive P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands

Independent Non-Executive Directors: Mr. Ni Zhenwei Dr. Chan Po Fun Peter Madam Hui Hiu Fai Mr. Li Wei

Principal place of business: Unit 1901, 19/F, West Tower Shun Tak Centre 168 Connaught Road Central Hong Kong

2 May 2008

To the Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATE

1. INTRODUCTION

The purpose of this circular is to provide you with the information relating to (i) the New General Mandate; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders on the New General Mandate; (iii) the recommendation from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders on the New General Mandate; and (iv) the notice of the EGM, at which the necessary resolutions will be proposed to the Independent Shareholders to consider and, if thought fit, approve the grant of the New General Mandate.

2. CURRENT GENERAL MANDATE

At the AGM, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Current General Mandate to allot and issue not more than 186,333,333 Shares, being 20% of the aggregate nominal amount of the issued share capital of the Company of 931,666,666 Shares as at the date of passing of such resolution.

* for identification purpose only

– 3 –

LETTER FROM THE BOARD

As announced and detailed in the announcement issued by the Company dated 11 October 2007, the Company, certain vendors and certain placing agents entered into a placing agreement dated 10 October 2007 pursuant to which, inter alia, the placing agents agreed to procure purchasers to purchase or, failing which, to purchase itself 186,000,000 Shares. Pursuant to a top-up subscription agreement dated 10 October 2007, one of such vendors agreed to subscribe for 186,000,000 new Shares on certain conditions including completion of the placing under the placing agreement. The Placing was completed on 18 October 2007 whereby 186,000,000 new Shares were issued pursuant to the Current General Mandate. The net proceeds of Placing of approximately HK$552 million had been used for partial settlement of the consideration payable by the Company in respect of the acquisition of certain shares in ECS Holdings Limited as detailed in the circular dated 2 October 2007 and supplemental circular dated 28 December 2007 issued by the Company.

Upon completion of the Placing and as at the Latest Practicable Date, the outstanding number of Shares that may be issued under the Current General Mandate is 333,333 Shares representing approximately 0.03% of the total enlarged issued share capital of the Company.

3. PROPOSED GRANT OF NEW GENERAL MANDATE

In accordance with the Listing Rules, principally Rule 13.36(4), the Company will be convening the EGM at which ordinary resolution will be proposed to seek the approval of the Independent Shareholders to grant the New General Mandate such that the Directors be granted general authority to allot and issue new Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the relevant ordinary resolution.

As at the Latest Practicable Date, the issued share capital of the Company is 1,117,666,666. The number of new Shares which would be authorized to allot and issue under the New General Mandate based on the issued share capital of the Company as at the Latest Practicable Date would be 223,533,333.

4. REASONS FOR THE NEW GENERAL MANDATE

The Group’s principal activity is the distribution of computer and peripheral products and other information technology products of well-known brands. The Company is also an investment holding company.

The Board believes that the grant of the New General Mandate is in the best interests of the Company and the Shareholders as a whole by maintaining the financial flexibility necessary for the Group’s future business development. The Board considers equity financing to be one of the important fund raising channels of the Group. While the Board has no concrete fund raising proposal, the Board is now proposing to seek the approval of the Independent Shareholders at the EGM of the New General Mandate such that should funding needs arise or attractive terms for investment in the Shares become available from potential investors, the Board will be able to respond to the market and such investment opportunities promptly without having first to obtain the consent of the Shareholders in general meeting and to avoid the uncertainties in such circumstances that specific mandate may not be obtained in a timely manner.

– 4 –

LETTER FROM THE BOARD

5. EXTRAORDINARY GENERAL MEETING

Pursuant to Rule 13.36(4)(a) of the Listing Rules, the New General Mandate requires the approval of the Independent Shareholders at the EGM at which any of the controlling shareholders and their associates or, where there are no controlling shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting.

As at the Latest Practicable Date, Mr. Li Jialin, the chairman and executive Director of the Company, together with his associates, held 457,068,000 Shares, representing approximately 40.89% of the entire issued share capital of the Company. As a result, they will abstain from voting at the EGM. Further, pursuant to Rule 13.39(4)(b) of the Listing Rules, as the refreshment of the Current General Mandate is prior to the next annual general meeting of the Company, the grant of the New General Mandate is subject to the Independent Shareholders’ approval at the EGM which will be taken on poll. There has not been any refreshment of the Current General Mandate since the AGM.

As far as the Company is aware, having made all reasonable enquiries, as at the Latest Practicable Date:

• (i) Mr. Li Jialin and his associates (the “Abstaining Shareholders”) controlled or were entitled to control over the voting rights in respect of their respective Shares;

• (ii) (a) there were no voting trusts or other agreements or arrangements or understandings (other than an outright sale) entered into by or binding upon the Abstaining Shareholders; and (b) there were no obligations or entitlements of the Abstaining Shareholders, whereby such persons have or might have temporarily or permanently passed control over the exercise of the voting right in respect of their respective Shares to third parties, either generally or on a case-by-case basis; and

• (iii) there were no discrepancies between the beneficial shareholding interests of the Abstaining Shareholders in the Company and the number of Shares in respect of which they would control or would be entitled to control over the voting right at the EGM.

The notice convening the EGM is set out on pages 16 to 17 of this circular. At the EGM, ordinary resolution will be proposed to approve the grant of the New General Mandate. A form of proxy for use at the EGM is also enclosed with this circular. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority at the Company’s branch share registrar and transfer office in Hong Kong, Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the EGM if you so wish.

– 5 –

LETTER FROM THE BOARD

6. INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprises Mr. Ni Zhenwei, Dr. Chan Po Fun Peter, Madam Hui Hiu Fai and Mr. Li Wei, the independent non-executive Directors. It has been established to advise the Independent Shareholders on the grant of the New General Mandate.

OSK Asia Capital Limited has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the grant of the New General Mandate.

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser in relation to the New General Mandate, is of the opinion that the New General Mandate is in the interests of the Company and the Shareholders as a whole, and is fair and reasonable so far as the Independent Shareholders are concerned, and accordingly recommends the Independent Shareholders to vote in favour of the ordinary resolution which will be proposed at the EGM for approving the grant of the New General Mandate.

The text of the letter from the Independent Board Committee is set out on page 8 of this circular and the text of the letter from the Independent Financial Adviser containing its advice is set out on pages 9 to 14 of this circular.

7. RIGHT TO DEMAND A POLL

Pursuant to Article 66 of the Articles, at any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is required under the Listing Rules, or (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (a) by the chairman of such meeting; or

• (b) by at least three members present in person or in the case a member being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or

• (c) by a member or members present in person or in the case of a member being a corporation by its duly authorized representative or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) by a member or members present in person or in the case of a member being a corporation by its duly authorized representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right; or

– 6 –

LETTER FROM THE BOARD

• (e) if required by the rules of the designated stock exchange, by any director or directors who, individually or collectively, hold proxies in respect of shares representing 5% or more of the total voting rights at such meeting.

8. GENERAL INFORMATION

Your attention is drawn to the letter of advice from the Independent Financial Adviser set out on pages 9 to 14 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in connection with the grant of the New General Mandate and the letter of the Independent Board Committee set out on page 8 of this circular which contains its recommendation to the Independent Shareholders in relation to the grant of the New General Mandate.

Yours faithfully, For and on behalf of the Board VST Holdings Limited Li Jialin Chairman

– 7 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Stock Code: 856)

2 May 2008

To the Independent Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATE

We refer to the circular of the Company dated 2 May 2008 (the “Circular”) of which this letter forms part. Unless the context requires otherwise, capitalized terms used herein shall have the same meanings as defined in the Circular.

We have been appointed by the Board to advise the Independent Shareholders as to whether the terms of the proposed grant of the New General Mandate are fair and reasonable so far as the Independent Shareholders are concerned. OSK Asia Capital Limited has been appointed as the independent financial adviser to advise us in this respect.

Having considered the principal reasons and factors considered by, and the advice of, the Independent Financial Adviser, as set out in its letter of advice to us on pages 9 to 14 of the Circular, we are of the opinion that the grant of the New General Mandate is in the interests of the Company and the Shareholders as a whole and the terms of which are fair and reasonable so far as the Company and the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the grant of the New General Mandate.

Yours faithfully, Independent Board Committee

Mr. Ni Zhenwei Dr. Chan Po Fun Peter Madam Hui Hiu Fai Mr. Li Wei

* for identification purpose only

– 8 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of the letter of advice from OSK Asia Capital Limited to the Independent Board Committee and the Independent Shareholders for the purpose of incorporation into the circular.

11/F., Hip Shing Hong Centre 55 Des Voeux Road Central Hong Kong

2 May 2008

The Independent Board Committee and the Independent Shareholders of

VST Holdings Limited Unit 1901 19/F, West Tower Shun Tak Centre 168 Connaught Road Central Hong Kong

Dear Sirs,

REFRESHMENT OF GENERAL MANDATE

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders with respect to the proposed refreshment of the general mandate granted to the Board, details of which are set out in the circular of the Company dated 2 May 2008 (the “Circular”) to the Shareholders, of which this letter forms part. Capitalised terms used in this letter have the same meanings as defined in the Circular, unless the context requires otherwise.

The Board proposes to refresh the general mandate to authorise the Directors to allot and issue new Shares not exceeding 20% of the issued share capital of the Company as at the date of the EGM. The New General Mandate is proposed to be granted prior to the Company’s next annual general meeting and, accordingly, pursuant to Rule 13.36(4) of the Listing Rules, the New General Mandate is subject to approval by the Independent Shareholders voting by way of poll at the EGM. As at the Latest Practicable Date, Mr Li Jialin, the chairman and an executive Director of the Company, and his associates were interested in approximately 40.89% of the issued share capital of the Company and, being the controlling Shareholders, are required to abstain from voting in favour of the resolution to approve the New General Mandate.

– 9 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising Mr Ni Zhenwei, Dr Chan Po Fun Peter, Madam Hui Hiu Fai and Mr Li Wei has been established to advise the Independent Shareholders in respect of the proposed grant of the New General Mandate. As the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, our role is to give an independent opinion to the Independent Board Committee and the Independent Shareholders as to whether the terms of New General Mandate are fair and reasonable so far as the Shareholders are concerned and whether the grant of the New General Mandate to the Board is in the interests of the Company and its Shareholders as a whole.

In formulating our opinion, we have relied upon the information, facts and representations contained in the Circular and those supplied or made by the Directors and management and advisers of the Company to us. We have assumed that all such information, facts and representations were true and accurate in all respects at the time they were supplied or made and continue to be true and accurate at the date of the Circular and can be relied upon. We have no reason to doubt the truth, accuracy and completeness of such information and representations and have confirmed with the Directors and management and advisers of the Company that no material facts have been withheld or omitted from such information and representations. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular or to us have been arrived at after due and careful consideration and there are no other facts not contained in the Circular the omission of which would make any statement in the Circular relating to the Group misleading.

We have taken all reasonable and necessary steps to comply with the requirements set out in Rule 13.80 of the Listing Rules. We consider that we have been provided with sufficient information to enable us to reach an informed view. We have not, however, conducted any independent verification of the information or any independent in-depth investigation into the business, affairs, financial position or prospects of the Group and its subsidiaries and associates.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion and recommendation in respect of the proposed grant of the New General Mandate, we have considered, among other things, the following principal factors and reasons.

Background of and reasons for the New General Mandate

We refer to the circular dated 2 October 2007 and the supplemental circular dated 28 December 2007 issued by the Company, the Company has acquired in aggregate an approximately 96.4% interest in ECS Holdings Limited (the “Acquisition”). As stated in the Company’s announcement dated 11 October 2007, the Company has issued 186,000,000 new Shares under the Placing using the Current General Mandate raising net proceeds for the Company of approximately HK$552 million to finance part of the consideration for the Acquisition.

– 10 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Current General Mandate was granted to the Board at the AGM allowing the Company to issue up to 186,333,333 Shares being approximately 20% of the total number of Shares in issue as at the date of the AGM. After completion of the Placing in October 2007, there remains available authority to issue up to 333,333 Shares which represents only approximately 0.03% of the 1,117,666,666 Shares in issue as at the Latest Practicable Date.

To finance the Acquisition, the Group has also drawn down a bridge loan of approximately HK$791 million. The bridge loan bears interest at the Hong Kong Inter Bank Offered Rate plus 2% per annum for the first three months and at the Hong Kong Inter Bank Offered Rate plus 3% per annum for the second three months and is repayable in full on 30 April 2008.

In order to provide flexible means for the Company to raise further funds for the Group’s future business development or other financing or refinancing needs, the Board proposes to seek Independent Shareholders’ approval at the EGM for the grant of the New General Mandate. The New General Mandate, if approved, would authorise the Directors to allot and issue new Shares not exceeding 20% of the issued share capital of the Company as at the date of the EGM. As at the Latest Practicable Date, there were 1,117,666,666 Shares in issue. On the assumption that there will be no issue or repurchase of Shares from the Latest Practicable Date to the date of the EGM (both dates inclusive), the grant of the New General Mandate would authorise the Board to allot and issue up to 223,533,333 Shares.

Fund raising activities in the past 12 months

The following table summarises the use of the Current General Mandate by the Board during the 12-month period ending on the Latest Practicable Date:

			Date of
			general	Intended use of
	Date of	Net proceeds	mandate	proceeds as	Actual
Description	announcement	raised	granted	announced	use of proceeds
Placing of 186,000,000	11 October	HK$552	31 August	Settlement of	As at the Latest
Shares in issue and	2007	million	2007	part of the	Practicable Date, the entire
top-up subscription				consideration	net proceeds of HK$552
of 186,000,000 new				for the	million had already been
Shares				Acquisition.	applied for the settlement
					of part of the consideration
					for the Acquisition as
					intended and set out in the
					relevant announcement.

– 11 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Benefits of the New General Mandate

As stated in the interim report of the Company for the six months ended 30 September 2007, the Group had cash and bank balances of approximately HK$94,791,000 as at 30 September 2007 (before taking into account of the Acquisition and the Placing completed after 30 September 2007). As mentioned above, it is beneficial for the Company to be able to have the ability and flexibility in structuring its financing needs (including the repayment of the bridge loan of HK$791 million due in April 2008). With the New General Mandate, the Company will be put in a better position to arrange for possible fund raising or other means of re-financing of the Group’s debts. The Company will also be better allow to structure any strategic investment and/or to capture other potential business opportunities which may require additional funding within a short period of time without the delays involved in having to seek further approval from the Shareholders.

We understand that issue of any new Shares under the New General Mandate, if granted, would be subject to the restrictions under the Listing Rules, including that in respect of the issue price of the new Shares. We agree that subject to the above restrictions, the New General Mandate would provide the Board with flexibility to take advantage of market conditions to make the necessary arrangements for the financing and/or business requirements of the Group from time to time.

Given the fact that approximately 99.82% of the Current General Mandate has been utilised upon completion of the Placing, we are of the view that it is in the interests of the Company and its Shareholders as a whole to approve the grant of the New General Mandate in order to provide the Board with greater flexibility in terms of issuing new Shares.

Shareholders should note that the Current General Mandate will be revoked (to the extent not exercised) subject to and upon approval of the New General Mandate at the EGM and the New General Mandate will, if approved, be and continue to be in force until the earlier 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 to be held by any applicable laws of Hong Kong or the Articles and (iii) its revocation or variation by ordinary resolution of the Shareholders in general meeting.

Other financing alternatives

Other than raising funds by way of issuing equity capital pursuant to the New General Mandate, we understand that the Company can consider other financing methods such as debt financing in order to meet any financing requirements arising from future developments of the Group and in assessing the most appropriate fund raising method will consider a range of factors including the then financial position, capital structure and cost of funding of the Group as well as the then prevailing market conditions. As such, the New General Mandate will serve as one of the options available to the Company to finance the Group’s investments, other funding requirements or business acquisition opportunities.

– 12 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Potential dilution effect on the shareholding interests of Shareholders

The table below sets out the shareholding structure of the Company as at the Latest Practicable Date and, for illustration purposes, upon full utilisation of the New General Mandate.

Mr Li Jialin and his associates (Note 1) Existing public Shareholders Holder(s) of shares which may be issued under the New General Mandate	As at the Latest Practicable Date Number of Shares Approximately % 457,068,000 40.89 660,598,666 59.11 – – 1,117,666,666 100.00	Assuming full utilisation of the New General Mandate Number of Shares Approximately % 457,068,000 34.08 660,598,666 49.25 223,533,333 16.67 1,341,199,999 100.00	Assuming full utilisation of the New General Mandate Number of Shares Approximately % 457,068,000 34.08 660,598,666 49.25 223,533,333 16.67 1,341,199,999 100.00
			100.00

Notes:

• (1) 241,500,000 Shares are held by L & L Limited. The entire issued share capital of L & L Limited is held equally by Mr Li Jialin and his spouse, Madam Liu Li, who does not hold any position in the Group.

• (2) Assuming no Shares will be issued or repurchased between the Latest Practicable Date and the date of EGM.

Assuming that no other Shares will be issued or repurchased whatsoever between the Latest Practicable Date and the date of EGM, the New General Mandate would authorise the Board to issue up to 223,533,333 new Shares, representing 20% of the total issued share capital of the Company as at the date of the EGM and approximately 16.67% of the total issued capital of the Company as thereby enlarged. Taking into account the benefits of the New General Mandate as discussed above and the fact that the issue of Shares pursuant to the New General Mandate would dilute the shareholding interests of all Shareholders by an equal proportionate amount, we consider such dilution or potential dilution effect to be acceptable.

– 13 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

CONCLUSION

Based on the principal factors considered above, including:

• the flexibility afforded by the New General Mandate to finance future finance, business development or investment needs;

• the flexibility afforded by the New General Mandate to act on market conditions to raise capital; and

• the acceptable dilution effect on the shareholding interests of Shareholders,

we consider that the terms of the New General Mandate are fair and reasonable and the grant of the New General Mandate to the Board is in the interests of the Company and its Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend to the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM in respect of the New General Mandate.

Yours faithfully, For and on behalf of OSK Asia Capital Limited Allen Tze

Director

– 14 –

GENERAL INFORMATION

APPENDIX

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 herein misleading.

2. EXPERT QUALIFICATION AND CONSENT

The following is the qualification of the expert who has been named in this circular or has given opinion or advice which is contained in this circular:

Name Qualification OSK Asia Capital Limited a corporate licensed to conduct type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, OSK Asia Capital Limited had no shareholding in any member of the Group nor has any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group. OSK Asia Capital Limited has no interest, either directly or indirectly, in any assets which have been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group since the date to which the latest published audited financial statements of the Company were made up.

OSK Asia Capital Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter of advice and references to its name, in the form and context in which they appear herein.

3. MISCELLANEOUS

This circular has been prepared in both English and Chinese. In the case of any discrepancies, the English text shall prevail over the Chinese text.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Stock Code: 856)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “EGM”) of VST Holdings Limited (the “Company”) will be held at the Dynasty Club (Address: 7th Floor, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong) on 19 May 2008 at 10:30 a.m. for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution as ordinary resolution:

ORDINARY RESOLUTION

“THAT :

• (a) subject to paragraph (c) below, the exercise by the directors of the Company (the “Directors”) during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company (“Shares”) and to make and grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into Shares) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) of this resolution shall authorize the Directors during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into Shares) which might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital 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 defined below); or (ii) the exercise of rights of subscription or conversion under the terms of any warrants issued by the Company or any securities which are convertible into Shares; or (iii) the exercise of any option under any share option scheme or similar arrangement for time being adopted for the grant or issue to officers, employees of the Company and/or any of its subsidiaries or other eligible participants of Shares or rights to acquire Shares; or (iv) any script dividend or similar arrangement providing for the allotment of Shares in lieu of the whole or part of the cash payment for a dividend on Shares in accordance with the articles of association of the Company (“Articles”), shall not exceed 20 per cent. of the aggregate nominal amount of the issued share capital of the Company in issue at the date of passing of this resolution and the said approval shall be limited accordingly; and

• for identification purpose only

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (d) for the purposes of this resolution, “Relevant Period” means the period from 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 applicable law to be held; or

• (iii) the date of which the authority set out in this resolution is revoked or varied by an ordinary resolution by the shareholders of the Company in general meeting.

“Right Issue” means an offer of shares or other securities of the Company open for a period fixed by the Directors to holders of Shares or any class thereof on the register on a fixed record date in proportion to their then holdings of such shares or class thereof (subject to such exclusions 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 recognized regulatory body or any stock exchange in, any territory outside the Hong Kong Special Administrative Region of the People’s Republic of China).”

By Order of the Board VST Holdings Limited Lung Cheuk Wah Company Secretary

Hong Kong, 2 May 2008

Notes:

• (1) Any member entitled to attend and vote at the EGM of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member 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 EGM. A proxy need not be a member. A proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.

• (2) Where there are joint holders of any share any one of such joint holder may vote, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at any meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding. Several executors or administrators of a deceased member in whose name any share stands shall be deemed joint holders thereof.

• (3) A form of proxy for use at the EGM is enclosed herewith.

• (4) The form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power of attorney must be lodged at the Company’s Hong Kong branch share registrar, Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong, not less than 48 hours before the time appointed for holding the EGM or adjourned meeting or not less than 24 hours before the time appointed for taking the poll (as the case may be) and in default the form of proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude members from attending and voting in person at the EGM or at any adjourned meeting (as the case may be) should they so wish.

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