Weiye Holdings Limited — Proxy Solicitation & Information Statement 2004

Jul 30, 2004

IMPORTANT

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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UNITED POWER INVESTMENT LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 674)

Directors: Yeung Chi Hang (Chairman) Ma Shuk Kam Liu Yu Mo Chung Siu Wah Lin Wai Yi Cheung Chi Wah

Principal Office: Rooms 209C and 210 2nd Floor Empire Centre 68 Mody Road Tsim Sha Tsui East Kowloon Hong Kong

* Independent non-executive directors

30th July, 2004

To the shareholders

Dear Sir or Madam,

GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES RE-ELECTION OF DIRECTOR AND AMENDMENT OF BYE-LAWS

INTRODUCTION

At the annual general meeting of United Power Investment Limited (the ‘‘Company’’) for the year ended 31st March, 2004, resolutions will be proposed to grant to the directors of the Company general mandates to issue shares and repurchase shares of the Company and to amend the Bye-laws of the Company.

The purpose of this circular is to give you further details of the abovementioned proposals. This circular also contains the explanatory statement in compliance with the Listing Rules of The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) and gives all the information reasonably necessary to enable shareholders to make an informed decision on whether to vote for or against the resolution to approve the purchase by the Company of its own shares.

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GENERAL MANDATE TO ISSUE SHARES

At the annual general meeting of the Company to be held on 25th August, 2004 (‘‘AGM’’) an ordinary resolution will be proposed to grant a general mandate to the directors of the Company to allot, issue and dispose of shares of the Company not exceeding 20 per cent. of the share capital of the Company in issue on the date of the resolution to provide flexibility to the Company to raise fund by issue of shares efficiently.

GENERAL MANDATE TO REPURCHASE SHARES

At the AGM, an ordinary resolution will also be proposed that the directors be given a general mandate to exercise all powers of the Company to repurchase issued and fully paid shares of the Company. Under such mandate, the number of shares that the Company may repurchase shall not exceed 10 per cent. of the share capital of the Company in issue on the date of the resolution. The Company’s authority is restricted to purchases made on the Stock Exchange in accordance with the Listing Rules of the Stock Exchange. On 23rd July, 2004 (the ‘‘Latest Practicable Date’’), being the latest practicable date prior to printing of this circular, there were in issue an aggregate of 1,095,884,000 shares of HK$0.05 each of the Company (‘‘Shares’’). Exercise in full of the mandate, on the basis that no further Shares are issued prior to the date of the AGM, could accordingly result in up to 109,588,400 Shares being repurchased by the Company. The mandate allows the Company to make or agree to make purchases only during the period ending on the earliest of the date of the next annual general meeting, the date by which the next annual general meeting of the Company is required to be held by law or the date upon which such authority is revoked or varied by an ordinary resolution of the shareholders in a general meeting of the Company.

The directors have no present intention to repurchase any Shares but consider that the mandate will provide the Company the flexibility to make such repurchase when appropriate and beneficial to the Company. Such repurchases may enhance the net value of the Company and/or earnings per Share. As compared with the financial position of the Company as at 31st March, 2004 (being the date of its latest audited accounts), the directors consider that there would be a material adverse impact on the working capital and on the gearing position of the Company in the event that the proposed purchases were to be carried out in full during the proposed purchase period. No purchase would be made in circumstances that would have a material adverse impact on the working capital or gearing ratio of the Company.

The Company is empowered by its Memorandum of Association and Bye-laws to purchase its Shares. Bermuda law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant shares, or funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a new issue of shares made for such purpose. The amount of premium payable on repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium of the Company. Under Bermuda law, the shares so repurchased will be treated as cancelled but the aggregate amount of authorised share capital will not be reduced.

The directors intend to apply the capital paid up on the relevant Shares or the profit that would otherwise be available for distribution by way of dividend for any purchase of its Shares.

Directors, their associates and connected persons

None of the directors nor, to the best of the knowledge and belief of the directors having made all reasonable enquiries, any of the associates of any of the directors has any present intention, in the event that the proposal is approved by shareholders, to sell Shares to the Company.

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No connected person of the Company (as defined in the Listing Rules of the Stock Exchange) has notified the Company that he/she has a present intention to sell Shares to the Company nor has he/she undertaken not to sell any of the Shares held by him/her to the Company in the event that the Company is authorised to make purchases of Shares.

Undertaking of the directors

The directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases pursuant to the proposed resolution in accordance with the Listing Rules of the Stock Exchange and all applicable laws of Bermuda, and in accordance with the regulations set out in the Memorandum of Association and Bye-laws of the Company.

Effect of Takeovers Code

A repurchase of Shares by the Company may result in an increase in the proportionate interest of a substantial shareholder of the Company in the voting rights of the Company, which could give rise to an obligation to make a mandatory offer in accordance with Rule 26 of the Hong Kong Code on Takeovers and Mergers (the ‘‘Code’’).

As at the Latest Practicable Date, to the best of the knowledge and belief of the Company, World Possession Assets Limited, who held approximately 53.59 per cent. of the issued share capital of the Company, was the only substantial shareholder holding more than 10 per cent. of the issued share capital of the Company. In the event that the directors should exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the resolution, the shareholding of World Possession Assets Limited in the Company would be increased to approximately 59.55 per cent. of the issued share capital of the Company and such increase would not give rise to an obligation on it to make a mandatory offer under Rule 26 of the Code.

Stock Exchange Rules for repurchases of shares

The Listing Rules of the Stock Exchange permit companies whose primary listings are on the Stock Exchange to repurchase their shares on the Stock Exchange subject to certain restrictions, the most important of which are summarised below:

(a) Shareholders’ approval

The Listing Rules provide that all shares repurchases on the Stock Exchange by a company with its primary listing on the Stock Exchange must be approved in advance by an ordinary resolution, which may be by way of general mandate, or by special resolution in relation to specific transactions.

(b) Source of funds

Repurchases must be funded out of funds legally available for the purpose.

General

During each of the six months preceding the date of this circular, no Shares have been repurchased by the Company.

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During each of the previous 12 months, the highest and lowest traded prices for Shares on the Stock Exchange were as follows: –

	Per Share
	Highest	Lowest
Month	HK$	HK$
2003
July	0.100	0.075
August	0.280	0.100
September	0.270	0.198
October	0.215	0.134
November	0.180	0.110
December	0.150	0.100
2004
January	0.209	0.116
February	0.340	0.170
March	0.280	0.212
April	0.210	0.160
May	0.200	0.105
June	0.160	0.140

AMENDMENT OF BYE-LAWS

It is proposed to amend the Company’s Bye-laws in the following manner in order to comply with the new requirements of Appendix 3 to the Listing Rules:

• (a) by adding the following definition in Bye-law 1 of the Bye-laws of the Company immediately after the definition of ‘‘Act’’:

• ‘‘‘‘associate’’ the meaning attributed to it in the rules of the Designated Stock Exchange.’’

• (b) by re-numbering the existing Bye-law 76 of the Bye-laws of the Company as Bye-law 76(1) and adding the following new Bye-law 76(2) immediately thereafter:

‘‘(2) Where the Company has knowledge that any Member is, under the rules of the Designated Stock Exchange, required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against any particular resolution of the Company, any votes cast by or on behalf of such Member in contravention of such requirement or restriction shall not be counted.’’

• (c) by deleting the existing Bye-law 89 of the Bye-laws of the Company in its entirety and substituting therefor the following:

‘‘89. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a

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notice in writing signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a notice in writing signed by the person to be proposed of his willingness to be elected shall have been lodged at the Office or the head office provided that the minimum length of the period, during which such notices are given, shall be at least seven (7) days and that the period for lodgment of such notices shall commence no earlier than the day after the despatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.’’

• (d) by adding the following new bye-law as Bye-law 104A immediately after the existing Bye-law 104 of the Bye-laws of the Company:

‘‘104A. A Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which his associate(s) is/are materially interested save for the exceptions set out in Bye-law 104(1)(i) to (vi) which shall apply to an associate of a Director mutatis mutandis. For the purposes of Bye-law 104(2) and Bye-law 104(3), the word ‘‘Director’’ wherever it appears shall be construed to mean ‘‘a director of the Company and/or his associate(s)’’. If any question shall arise at any meeting of the Board as to the materiality of the interest of an associate to a Director, such question shall be referred to the chairman of the meeting and his ruling shall be final and conclusive. If any question as aforesaid shall arise in respect of an associate to the chairman of the meeting such question shall be decided by a resolution of the Board for which purpose such chairman shall not vote thereon and such resolution shall be final and conclusive.’’.

RE-ELECTION OF DIRECTOR

Ms. Ma Shuk Kam (an executive director of the Company) will retire at the AGM and will offer herself for re-election according to the Company’s Bye-laws. Ms. Ma, aged 50, joined the Group in January, 2000 and was the Chairperson of the Board from 29th December, 2000 to 25th April, 2004. Ms. Ma is a veteran property investor with diversified portfolio in Hong Kong and the People’s Republic of China. She is the mother of Mr. Yeung Chi Hang (the Chairman of the Company) and Ms. Yeung Kit Yu, Kitty (a member of the senior management of the Company) and the sister of Ms. Ma Shok Hung (a member of the senior management of the Company). She and her associates own the entire issued share capital of World Possession Assets Limited, the controlling shareholder of the Company, and so has corporate interests in 587,322,207 shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. No emoluments have been received by Ms. Ma from the Group.

ANNUAL GENERAL MEETING

You will find on pages 7 to 9 of this circular a notice of the AGM to be held at 3:30 p.m. on 25th August, 2004 at Golden Island Bird’s Nest Chiu Chau Restaurant, 2nd Floor, East Wing, Star House, 3 Salisbury Road, Tsim Sha Tsui, Kowloon, Hong Kong.

Resolution no. 4A will be proposed as an ordinary resolution to give a general mandate to the directors to allot, issue and deal with shares of the Company with an aggregate nominal value not exceeding 20 per cent. of the share capital of the Company in issue as at the date of the resolution.

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Resolution no. 4B will be proposed as an ordinary resolution to give a general mandate to the directors to make on-market purchases of shares of the Company of up to 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of the resolution.

Resolution no. 4C will be proposed as an ordinary resolution to extend resolution no. 4A to include the aggregate nominal amount of the number of shares in the capital of the Company which are repurchased by the Company under the authority granted to the directors pursuant to resolution no. 4B.

Resolution no. 4D will be proposed as a special resolution to approve the proposed amendment of the Bye-laws of the Company.

There is enclosed a form of proxy for use at the AGM. You are requested to complete the form of proxy and return it to the principal office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the meeting, whether or not you intend to be present at the meeting. The completion and return of the form of proxy will not prevent you from attending and voting in person should you so wish.

According to the Bye-laws of the Company, before the chairman of the meeting has declared the result of voting on a show of hands on a resolution at the AGM, a poll may be demanded by:

• (a) at least three members present in person (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy entitled to vote at the meeting; or

• (b) any member or members present in person (or, in the case of a member being a corporation, by its duly authorised representative) or by proxy and representing not less than 10% of the total voting rights of all the members having the right to vote at the meeting; or

• (c) any member or members present in person (or, in the case of a member being a corporation, by its duly authorised 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 the shares conferring that right.

RECOMMENDATION

The directors consider that the proposed granting of the mandates to issue and repurchase shares of the Company and amendment of the Bye-laws are in the interest of the Company and so recommend you to vote in favour of all resolutions at the AGM. The directors will vote all their shareholdings in favour of the resolutions.

Yours faithfully, By order of the Board Yeung Chi Hang Chairman

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NOTICE OF ANNUAL GENERAL MEETING

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UNITED POWER INVESTMENT LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 674)

NOTICE IS HEREBY GIVEN that the annual general meeting of the abovenamed company (the ‘‘Company’’) will be held at Golden Island Bird’s Nest Chiu Chau Restaurant, 2nd Floor, East Wing, Star House, 3 Salisbury Road, Tsim Sha Tsui, Kowloon, Hong Kong on 25th August, 2004 at 3:30 p.m. for the following purposes:

1. To receive and consider the audited consolidated financial statements and the reports of the directors and auditors for the year ended 31st March, 2004.

2. To elect directors and to authorise the board of directors to fix their remuneration.

3. To appoint auditors and to authorise the board of directors to fix their remuneration.

4. As special business, to consider and, if thought fit, pass the following resolutions, of which resolution nos. 4A, 4B and 4C will be proposed as ordinary resolutions and resolution no. 4D will be proposed as a special resolution:

ORDINARY RESOLUTIONS

• A. ‘‘ THAT :

• (a) subject to paragraph (c), the exercise by the directors of the Company during the Relevant Period of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power 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 an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (a), otherwise than pursuant to a Rights Issue or scrip dividend scheme or similar arrangement of the Company or the exercise of the subscription rights under the share option scheme of the Company shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of this resolution and the said approval shall be limited accordingly; and

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(d) for the purposes of this resolution:

‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is 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 by the Bye-laws of the Company or any applicable law to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

‘‘Rights Issue’’ means an offer of shares open for a period fixed by the directors of the Company to holders of shares on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusion or other arrangements as the directors of the Company 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 recognised regulatory body or any stock exchange in any territory outside Hong Kong).’’

B. ‘‘ THAT :

• (a) the exercise by the directors of the Company during the Relevant Period of all powers of the Company to purchase its own shares, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of shares of the Company purchased by the Company pursuant to the approval in paragraph (a) during the Relevant Period shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of this resolution and the said approval be limited accordingly; and

• (c) for the purposes of this resolution:

‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is 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 by the Bye-laws of the Company or any applicable law to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting.’’

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• C. ‘‘ THAT conditional upon resolution no. 4B above being passed, the aggregate nominal amount of the number of shares in the capital of the Company which are repurchased by the Company under the authority granted to the directors as mentioned in resolution no. 4B above shall be added to the aggregate nominal amount of share capital that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to resolution no. 4A above.’’

SPECIAL RESOLUTION

• D. ‘‘ THAT the existing Bye-laws of the Company be and are hereby amended in the manner set out in the section headed ‘‘Amendment of Bye-laws’’ in the circular of the Company dated 30th July, 2004 (a copy of such section has been submitted to the meeting and signed by the Chairman of the meeting for the purpose of identification).’’

By Order of the Board Jennifer Cheung Mei Ha Company Secretary

Hong Kong, 30th July, 2004

Principal Office: Rooms 209C and 210 2nd Floor Empire Centre 68 Mody Road Tsim Sha Tsui East Kowloon Hong Kong

Notes:

• (1) A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint proxies to attend and, in the event of a poll, vote in his stead. A proxy need not be a member of the Company.

• (2) In order to be valid, the form of proxy must be deposited at the Company’s principal office in Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or adjourned meeting.

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