Wang On Group Limited — Proxy Solicitation & Information Statement 2005

May 10, 2005

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 a 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 Wang On Group 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 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.

==> picture [63 x 46] intentionally omitted <==

WANG ON GROUP LIMITED

（宏安集團有限公司）[*]

(Incorporated in Bermuda with limited liability)

(Stock Code : 1222)

DISCLOSEABLE TRANSACTION

ACQUISITION OF PROPERTY

10 May 2005

* For identification purpose only

CONTENT

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6

– i –

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

• “ Acquisition ”

the acquisition of the Property pursuant to the Agreement

• “ Agreement ”

• the provisional agreement for sale and purchase entered into between Smart First Investment Limited as the Purchaser and the Vendor on 15 April 2005 relating to the Acquisition;

• “ associates ” has the meaning ascribed thereto in the Listing Rules;

• “ Board ” the board of Directors of the Company;

• “ Company ”

• Wang On Group Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Stock Exchange;

• “ Consideration ” HK$15,750,000;

• “ Directors ” the directors of the Company;

• “ Group ” the Company and its subsidiaries;

• “ Independent Third Party ”

• an independent third party not connected with any of the Directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates, as defined in the Listing Rules;

• “ Latest Practicable Date ”

• 9 May 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in the circular;

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

• “ Property ”

• the ground, first and second floors and roof top of 68 San Hong Street, Sheung Shui, Hong Kong;

• “ Purchaser ”

• Smart First Investment Limited, a property holding company and an indirect wholly-owned subsidiary of the Company;

• “ SFO ” the Securities and Futures Ordinance (Chapter 571 of The Laws of Hong Kong);

• “ Share(s) ”

• the ordinary share(s) of HK$0.10 each in the issued share capital of the Company;

– 1 –

DEFINITIONS

“ Shareholder(s) ” the shareholder(s) of the Company; “ Stock Exchange ” The Stock Exchange of Hong Kong Limited; and “ Vendor ” An individual who, to the best of knowledge, information and belief of the Directors, is an Independent Third Party.

– 2 –

LETTER FROM THE BOARD

==> picture [63 x 46] intentionally omitted <==

WANG ON GROUP LIMITED

（宏安集團有限公司）[*]

(Incorporated in Bermuda with limited liability)

(Stock Code : 1222)

Executive Directors:

Mr. Tang Ching Ho (Chairman and Managing Director) Ms. Yau Yuk Yin

(Deputy Chairman and Deputy Managing Director) Mr. Chan Chun Hong, Thomas

Registered office: Clarendon House 2 Church Street 41 Cedar Avenue Hamilton HM 11 Bermuda

Independent non-executive Directors:

Dr. Lee Peng Fei, Allen, CBE, JP Mr. Wong Chun, Justein, MBE, JP Dr. Siu Yim Kwan, Sidney, S.B.St.J. Mr. Siu Kam Chau

Head office and principal place of business in Hong Kong: 5th Floor Wai Yuen Tong Medicine Building 9 Wang Kwong Road Kowloon Bay Kowloon Hong Kong 10 May 2005

To the Shareholders

Dear Sir/Madam

DISCLOSEABLE TRANSACTION ACQUISITION OF PROPERTY

INTRODUCTION

On 19 April 2005, the Directors announced that the Purchaser had entered into the Agreement with the Vendor, pursuant to which the Purchaser agreed to acquire from the Vendor the Property for a cash consideration of HK$15,750,000.

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 information on the Acquisition.

* For identification purpose only

– 3 –

LETTER FROM THE BOARD

THE AGREEMENT

Date of execution:

15 April 2005

Parties:

Purchaser:

Smart First Investment Limited, a property holding company and an indirect whollyowned subsidiary of the Company.

Vendor:

An individual who, to the best of knowledge, information and belief of the Directors, is an Independent Third Party.

Property:

Address:

The ground, first and second floors and rooftop of 68 San Hong Street, Sheung Shui, Hong Kong.

Gross floor area and uses:

The ground floor is for commercial use and has a gross floor area of approximately 1,000 square feet. The first floor is for residential use and has a gross floor area of approximately 900 square feet. The second floor is for residential use and has a gross floor area of approximately 900 square feet. The rooftop is for residential use and has a gross floor area of approximately 900 square feet.

Consideration:

The consideration of HK$15,750,000 was agreed after arm’s length negotiations between the Vendor and the Purchaser by reference to the current market value of properties for commercial and residential uses in the market in the adjacent areas and was/shall be payable (as applicable) in cash as follows:

• (i) HK$450,000 after the signing of the Agreement;

• (ii) HK$1,125,000 on the signing of the formal agreement for sale and purchase on or before 28 April 2005; and

• (iii) the balance of HK$14,175,000 upon completion on or before 28 June 2005.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Vendor is an Independent Third Party who is independent and not being a connected person of the Company.

– 4 –

LETTER FROM THE BOARD

Terms:

The Vendor agrees to sell and the Purchaser agrees to purchase the Property subject to the following existing tenancies:

• (i) the existing tenancy in respect of the ground floor is for a monthly net rental of HK$34,000 and will expire on 15 January 2006; and

• (ii) the existing tenancy in respect of the first floor is for a monthly rental of HK$6,200 (inclusive of rates and government rent) and will expire on 7 April 2007.

The Vendor agrees to deliver to the Purchaser vacant possession in respect of the second floor and rooftop on completion. At completion of the sale and purchase of the Property, the Vendor will pay to the Purchaser the full amount of all rental deposits received from each of the existing tenants under the relevant existing tenancy. The Purchaser agrees to purchase the Property from the Vendor on an “as is” basis and acknowledges and agrees that the Property is subject to a building order issued by the Building Authority to demolish certain structures attached to the Property. The Vendor will therefore be responsible for the payments, which are not expected to be substantial, associated with the demolition of such structures.

SOURCE OF FUND

The Acquisition will be funded approximately one-half by the Group’s internal resources and the remainder by bank financing.

REASONS FOR THE ACQUISITION

Having regard to the upturn of the Hong Kong economy and the property market, the Directors consider the terms of the Acquisition are fair and reasonable and the Acquisition is in the interest of the shareholders as a whole.

The Directors consider that the Acquisition will bring an increase in the earnings of the Group by the rental incomes without significant influences to the assets and liabilities of the Group.

INFORMATION ON THE GROUP

The Group is principally engaged in property development and property investment, the management and sub-licensing of Chinese wet markets, shopping centres and car parks. The Group also has interests in the pharmaceutical business through its investments in Wai Yuen Tong Medicine Holdings Limited, a company listed on the Stock Exchange.

GENERAL INFORMATION

Your attention is also drawn to the general information as set out in this circular.

Yours faithfully For and on behalf of

Wang On Group Limited Tang Ching Ho Chairman and Managing Director

– 5 –

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. DISCLOSURE OF DIRECTORS’ INTERESTS

(a) Interests of Directors

As at the Latest Practicable Date, the interests and short positions of each Director or chief executive of the Company in the Shares, underlying shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange, were as follows:

Interests in Shares

						Percentage
		Number of Shares held,		capacity		of the
		and nature of interest				Company’s
Name of	Personal	Family	Corporate	Other		issued share
Director	Interest	Interest	interest	interest	Total	capital
Mr. Tang Ching Ho	614,355	614,354	2,247,227	24,243,463	27,719,399	19.34
		(Note (a))	(Note (b))	(Note (c))
Ms. Yau Yuk Yin	614,354	2,861,582	–	24,243,463	27,719,399	19.34
		(Note (d))		(Note (e))

Notes:

• (a) Mr. Tang Ching Ho was taken to be interested in those Shares in which his spouse, Ms. Yau Yuk Yin, was interested.

• (b) Mr. Tang Ching Ho was taken to be interested in those Shares in which Caister Limited, a company which is wholly and beneficially owned by him, was interested.

• (c) Mr. Tang Ching Ho was taken to be interested in those Shares by virtue of being the founder of a discretionary trust, namely Tang’s Family Trust.

• (d) Ms. Yau Yuk Yin was taken to be interested in those Shares in which her spouse, Mr. Tang Ching Ho, was interested.

• (e) Ms. Yau Yuk Yin was taken to be interested in those Shares by virtue of being a beneficiary of Tang’s Family Trust.

– 6 –

GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short position in the Shares, underlying shares or debentures of the Company or any of its associated corporation(s) (within the meaning of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interests and short positions which he was taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange.

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial shareholders

As at the Latest Practicable Date, so far as is known to the Directors, the following persons (not being a Director or chief executive of the Company) had, or were deemed or taken to have interests or short positions in the Shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or, who were, directly or indirectly, interested in 5% 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 the Group or had any option in respect of such capital:

		Percentage of the
		Company’s issued
Name	Number of Shares held	share capital
Accord Power Limited	24,243,463	16.91
Trustcorp Limited_(Note)_	24,243,463	16.91

Note: Accord Power Limited is wholly-owned by Trustcorp Limited in its capacity as the trustee of Tang’s Family Trust; accordingly, Trustcorp Limited was taken to be interested in those Shares held by Accord Power Limited.

Save as disclosed above, according to the register of interests kept by the Company under section 336 of the SFO and so far as is known to the Directors, as at the Latest Practicable Date, no other person (not being a Director or chief executive of the Company) had any interest or short position in Shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 5% 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 the Group or held any option in respect of such capital.

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with the Company or any member of the Group (excluding contracts expiring or determinable by the Company within one year without payment of compensation other than statutory compensation).

– 7 –

GENERAL INFORMATION

APPENDIX

4. DIRECTORS’ INTEREST IN COMPETING BUSINESS

To the best knowledge of the Directors, none of the Directors or their respective associates had any interest in a business, which competes or may compete with the business of the Group.

5. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against any member of the Group.

6. GENERAL

• (a) The secretary of the Company is Mr. Chan Chun Hong, Thomas. He is a fellow member of The Association of Chartered Certified Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants.

• (b) The qualified accountant of the Company appointed pursuant to Rule 3.24 of the Listing Rules is Mr. Tang Kam Shing, Roland, CPA.

• (c) The branch share registrar of the Company in Hong Kong is Tengis Limited, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

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

– 8 –