WEIli Holdings Limited — Proxy Solicitation & Information Statement 2005

Jan 5, 2005

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.

DAIWA ASSOCIATE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 1037)

DESPATCH OF CIRCULAR IN RESPECT OF THE INTERIM DIVIDEND WITH WARRANT ALTERNATIVE AND WHITEWASH WAIVER

Financial adviser to Daiwa Associate Holdings Limited

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The Circular of the Company containing, amongst other things, (i) details of the Warrant Alternative and the Whitewash Waiver; (ii) a letter from the independent board committee of the Company; (iii) a letter from VC Capital Limited, the independent financial adviser to the independent board committee of the Company and the Independent Shareholders; and (iv) a notice convening the SGM, will be despatched to the Shareholders on 6 January 2005.

The Warrant Alternative is subject to conditions being fulfilled. Accordingly, the Warrant Alternative may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the Shares and if they are in any doubt about their position, they are recommended to consult their professional advisers.

Reference is made to the announcement of the Company dated 16 December 2004 (the “Announcement”). Unless otherwise stated, terms used in this announcement shall have the same meanings as those defined in the Announcement.

DESPATCH OF THE CIRCULAR

A circular of the Company (the “Circular”) contains, amongst other things, (i) details of the Warrant Alternative and the Whitewash Waiver; (ii) a letter from the independent board committee of the Company; (iii) a letter from VC Capital Limited, the independent financial adviser to the independent board committee of the Company and the Independent Shareholders; and (v) a notice convening the SGM to be held at 10:00 a.m. on Tuesday, 25 January 2005, together with the proxy form for the SGM will be despatched to the Shareholders on 6 January 2005.

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A copy of the Circular has been registered with the Registrar of Companies in Hong Kong as required by Section 342C of the Company Ordinance of Hong Kong. A copy of the Circular will be filed with the Registrar of Companies in Bermuda pursuant to the Companies Act 1981 of Bermuda (as amended) as soon as practicable.

Shareholders should read the Circular carefully and in particular the letter of advice from VC Capital Limited and the recommendation of the independent board committee of the Company to the Independent Shareholders before voting on the relevant resolutions to be proposed at the SGM.

GENERAL

As at the date of this announcement, the board of directors of the Company comprises Mr. Lau Tak Wan, Mr. Wan Chor Fai, Mr. Mak Hon Kai, Stanly, and Ms. Chan Yuen Mei, Pinky as executive Directors, Mr. Barry John Buttifant, Mr. Choi Yuk Fan and Mr. Liu Ngai Wing as independent non-executive Directors.

The Warrant Alternative is subject to conditions being fulfilled. Accordingly, the Warrant Alternative may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the Shares and if they are in any doubt about their position, they are recommended to consult their professional advisers.

By order of the Board Lau Tak Wan President

Hong Kong, 5 January 2005

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration, and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.

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NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (“ SGM ”) of Daiwa Associate Holdings Limited will be held at 11th Floor, Block G, East Sun Industrial Centre, 16, Shing Yip Street, Kwun Tong, Kowloon, Hong Kong on Tuesday, 25 January, 2005 at 10:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as ordinary resolutions:

ORDINARY RESOLUTIONS

1. “THAT , subject to the Listing Committee of The Stock Exchange of Hong Kong Limited granting the listing of, and permission to deal in, the new ordinary shares of par value of HK$0.10 each (the “ Shares ”) in the capital of Daiwa Associate Holdings Limited (the “ Company ”) which may fall to be issued upon exercise of the subscription rights attaching to the Warrants (as hereinafter defined) and the Securities and Future Commission of Hong Kong granting the whitewash waiver pursuant to Note 1 to the Notes on dispensation from Rule 26 of the Hong Kong Code on Takeovers and Mergers to Mr. Lau Tak Wan (“ Mr. Lau ”), the controlling shareholder and a director of the Company, in respect of his mandatory obligation to make a general offer for all the Shares not already owned by him and his concert parties arising as a result of Mr. Lau and/ or his concert parties exercising their respective subscription rights under the Warrants, the directors of the Company be and are hereby authorised:

   • (a) to create and issue warrants (“ Warrants ”) carrying aggregate subscription rights of up to HK$26,468,266.50 which shall be in registered form and shall be exercisable at any time from 25 February 2005 to 24 February 2008 (both dates inclusive), carrying rights to subscribe at an initial subscription price of HK$0.50 per Share, subject to adjustments, for new Shares on the terms and conditions set out in the warrant instrument (a copy of a draft of which marked “A” is produced to this meeting and signed for the purpose of identification by the Chairman of this meeting) and to issue the same as an alternative to the recommended interim dividend of HK$0.01 per Share for the six months ended 30 September 2004 to be paid by the Company in cash to holders of its Shares (the “ Shareholders ”) at the close of business on 25 January 2005 (“ Record Date ”), on the basis of one Warrant for every five Shares held (i.e. at an issue price of HK$0.05 per Warrant) and upon the terms and conditions as set out in the circular of the Company dated 6 January 2005 (a copy of which marked “B” is produced to this meeting and signed for the purpose of identification by the Chairman of this meeting) provided that in the case of persons whose registered addresses, as shown in the Company’s register of members at the close of business on the Record Date, are outside the Hong Kong Special Administrative Region of the People’s Republic of China and the directors of the Company are of the view that the exclusion of such persons is necessary or expedient on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place in relation to the issue of the Warrants, the Warrants will not be made available to those persons and those persons will only be entitled to receive the recommended interim dividend for the six months ended 30 September 2004 of HK$0.01 per Share in cash;

   • (b) to allot and issue new Shares upon exercise of the subscription rights attaching to the Warrants or any of them, such new Shares shall rank pari passu in all respects with the then existing issued Shares; and

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• (c) to do all such acts and things as they consider necessary or expedient to give effect to the foregoing arrangements.”

1. THAT the waiver pursuant to Note 1 on the Notes dispensation of Rule 26 of the Hong Kong Code on Takeovers and Mergers (the “ Takeovers Code ”) waiving any obligation on the part of Mr. Lau Tak Wan, the controlling shareholder and director of the Company, to make a mandatory general offer for all the issued shares in the capital of the Company not already owned by him or parties acting in concert with him which would otherwise arise under Rule 26.1 of the Takeovers Code as a result of Mr. Lau Tak Wan and/or his concert parties exercising their respective subscription rights under the Warrants be and is hereby approved.”

By order of the Board of Daiwa Associate Holdings Limited Lau Tak Wan President

Hong Kong, 6 January 2005

Registered Office:

Canon’s Court 22 Victoria Street

Hamilton HM12

Bermuda

Notes:

1. A member entitled to attend and vote at the SGM is entitled to appoint a proxy or proxies to attend and vote on his behalf. A proxy need not be a member of the Company. Completion and return of a form of proxy will not preclude a member from attending and voting in person at the meeting.

2. In order to be valid, a form of proxy together with a power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be deposited at the office of the Company’s branch registrar in Hong Kong, Abacus Share Registrars Limited, G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the meeting or adjourned meeting or poll (as the case may be).

3. In the case of joint holders, the vote of the senior who tenders a vote 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.

4. Pursuant to Bye-law 69 of the Company, at any general meeting a resolution put to vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by:

   • (i) the chairman;

   • (ii) at least 3 members present in person or by proxy or authorized representative for the time being entitled to vote at the meeting;

   • (iii) any member or members present in person or by proxy or authorized representative and holding between them not less than one-tenth of the total voting rights of all the members having the right at attend and vote at the meeting; or

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• (iv) any member or members present in person or by proxy or authorized representative and holding shares in the Company conferring a right to attend and 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 the shares conferring that right.

Unless a poll is so demanded and the demand is not withdrawn, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously or by a particular majority or lost and an entry to that effect in the book of the proceedings of the Company shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against that resolution.

Please also refer to the published version of this announcement in the China Daily.

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