Weiye Holdings Limited — Proxy Solicitation & Information Statement 2008

Jun 2, 2008

IMPORTANT THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION

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.

If you are in 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 adviser.

If you have sold all your shares in United Power Investment Limited you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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UNITED POWER INVESTMENT LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 674)

CONNECTED TRANSACTION PROVISION OF LOAN

Independent Financial Adviser to the Independent Board Committee and the Shareholders

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FIRST SHANGHAI CAPITAL LIMITED

3rd June, 2008

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from First Shanghai. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix — General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

— i —

DEFINITIONS

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

“associate”	has the meaning ascribed to it under the Listing Rules
“Board”	board of Directors
“Company”	United Power Investment Limited, a company incorporated in
	Bermuda with limited liability and the shares of which are listed
	on the Stock Exchange
“Directors”	directors of the Company
“First Shanghai”	First Shanghai Capital Limited, a licensed corporation to carry
	out type 6 (advising on corporate finance) regulated activity
	under the SFO, being the independent financial adviser to the
	Independent Board Committee and the shareholders in relation
	to the Loan Agreement
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Board	an independent committee of the Board comprising Messrs.
Committee”	Chan Lai Mei, Lee Wai Loun and Lee Yuk Sang, Angus, formed
	for the purpose of advising the shareholders regarding the Loan
	Agreement
“Latest Practicable Date”	29th May, 2008, being the latest practicable date prior to printing
	of this circular for ascertaining certain information for inclusion
	in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Loan Agreement”	the loan agreement dated 9th May, 2008 between Well Allied
	and PLD relating to a loan of HK$17.2 million
“Madam Ma”	Madam Ma Shuk Kam, the non-executive Chairperson of the
	Company

— ii —

DEFINITIONS

“Mr. Yeung”	Mr. Yeung Chi Hang, an executive Director and the Chief
	Executive Officer of the Company
“Ms. Yeung”	Ms. Yeung Kit Yu, Kitty
“PLD”	PLD International Co., Ltd., a company incorporated in Samoa
	with limited liability
“PRC”	People’s Republic of China, excluding Hong Kong, Taiwan and
	Macau Special Administrative Region
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	share(s) of HK$0.05 each in the share capital of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Tak Full”	Tak Full Group Limited, a company incorporated in Samoa with
	limited liability
“Well Allied”	Well Allied Investments Limited, a company incorporated in the
	British Virgin Islands with limited liability and a non-wholly
	owned subsidiary of the Company
“Welly Champ”	Welly Champ International Limited, a company incorporated in
	the British Virgin Islands with limited liability and a non-wholly
	owned subsidiary of the Company
“World Possession”	World Possession Assets Limited, a company incorporated in the
	British Virgin Islands with limited liability
“HK$”	Hong Kong dollar(s)

— iii —

LETTER FROM THE BOARD

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UNITED POWER INVESTMENT LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 674)

Directors: Ma Shuk Kam (Non-executive Chairperson) Yeung Chi Hang (Chief Executive Officer) Liu Yu Mo Au Edmond Wah Chan Lai Mei Lee Wai Loun Lee Yuk Sang, Angus*

Principal Office: 2810-11, 28th Floor Shun Tak Centre West Tower 200 Connaught Road Centre Hong Kong

• Independent non-executive Directors

3rd June, 2008

To the shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION PROVISION OF LOAN

INTRODUCTION

It was announced on 13th May, 2008 that Well Allied, an indirect non-wholly owned subsidiary of the Company, entered into the Loan Agreement on 9th May, 2008 for the advance of a loan of HK$17.2 million to PLD at the interest rate of 5.25% per annum and repayable within 1 year from the date of the Loan Agreement. The Loan Agreement constitutes a connected transaction under the Listing Rules which requires the approval of independent shareholders of the Company pursuant to Rule 14A.63 of the Listing Rules. The Stock Exchange has granted a waiver of the requirement of holding a general meeting and accepted the written independent shareholders’ approval of World Possession and Mr. Yeung pursuant to Rule 14A.43 of the Listing Rules.

An independent board committee comprising Messrs. Chan Lai Mei, Lee Wai Loun and Lee Yuk Sang, Angus (all being independent non-executive Directors), has been appointed to advise the shareholders in respect of the Loan Agreement. The Company has appointed First Shanghai as the independent financial adviser to advise the Independent Board Committee and the shareholders in this respect.

— 1 —

LETTER FROM THE BOARD

The purpose of this circular is to give you further details of the Loan Agreement and set out the recommendation of the Independent Board Committee and the advice of First Shanghai.

THE LOAN AGREEMENT DATED 9TH MAY, 2008

Parties:

Lender : Well Allied Borrower : PLD

Well Allied is a 63.36% subsidiary of Welly Champ, which is a 75.92% owned subsidiary of the Company. The balance of 36.64% interest in Well Allied is owned by Tak Full, which is owned as to 18.4%, 18.3%, 18.3%, 38.89%, 4.44% and 1.67% by Lee Tien-Yung, Li Deh-Sheng, Philip Lu Yueh-Wei (together the “PLD Shareholders”), Fashion Investments Limited, Hao Hsin-Ming and Cheung Kwok Chung respectively. PLD is owned by the PLD Shareholders.

Terms:

Amount of the loan : HK$17.2 million Annual interest rate : 5.25% Repayable date : within 1 year from the date of the Loan Agreement

Payment terms:

The loan was advanced on the date of signing of the Loan Agreement.

Funding:

The advance of the loan was funded from internal resources of Well Allied.

Reasons for the transaction:

On 14th July, 2006, Well Allied and PLD entered into an agreement (the “JV Agreement”) whereby they agreed to cooperate to realise the benefits of various co-operation agreements signed by China Music Video Broadcast (Shenzhen) Company Limited (a wholly owned subsidiary of Well Allied) relating to licensing of copyrights to karaoke music products to karaoke operators in the PRC (the “Co-operation Agreements”).

PLD is required to make payments of about HK$17.2 million due under contracts made with various owners of copyrights to audio-visual works for vocal accompaniment whereby PLD acquires the exclusive rights to, inter alia, grant licence to karaoke operators the rights to replicate and play audio-visual works with vocal accompaniment (the “Contracts”). In order to enable

— 2 —

LETTER FROM THE BOARD

PLD to perform its obligations under the JV Agreement, Well Allied made the loan to PLD (which was not in its ordinary and usual course of business) to finance its payments due under the Contracts. On 4th July, 2007, Well Allied advanced a loan of HK$9 million (the “Previous Loan”) to PLD for similar purpose and so the total amount advanced by Well Allied to PLD required to be aggregated pursuant to Rule 14A.25 of the Listing Rules is HK$26.2 million. Save as aforesaid, there is no other transaction with PLD or its associates which is required to be aggregated under Rules 14A.25 of the Listing Rules.

The loan advanced under the Loan Agreement will enable Well Allied to receive benefits from licensing of copyrights granted under the Contracts to karaoke music products to karaoke operators in the PRC under the Co-operation Agreements.

The terms of the Loan Agreement were arrived at after arm’s length negotiations with reference to the prevailing prime rate of banks in Hong Kong. The Directors consider that the terms of Loan Agreement are of normal commercial terms, fair and reasonable and in the interests of the shareholders as a whole.

Connection between the parties:

PLD is an associate of Tak Full, which holds about 36.64% interest in Well Allied.

INFORMATION FOR SHAREHOLDERS

The Company and its subsidiaries are principally engaged in hotel and restaurant operations, property investment, provision of wedding services, entertainment business and retail trading of watches and wine.

PLD is principally engaged in investment holding.

For the Company, the Loan Agreement (together with the Previous Loan) constitutes a connected transaction under the Listing Rules pursuant to Rule 14A.63 of the Listing Rules which requires the approval of independent shareholders as the percentage ratio in respect of consideration test is more than 2.5% and the total amount of loans advanced to PLD exceeds HK$10 million. The Stock Exchange has granted a waiver of the requirement of the independent shareholders’ approval to the Loan Agreement be given by a majority vote at a general meeting of the shareholders of the Company and accepted a written independent shareholders’ approval pursuant to Rule 14A.43 of the Listing Rules as (i) no shareholders of the Company has a material interest in the Loan Agreement and is required to abstain from voting if the Company were to convene a general meeting for the approval of the Loan Agreement; and (ii) the Company has obtained a written independent shareholders’ approval dated 9th May, 2008 of World Possession and Mr. Yeung (who are closely allied shareholders and together hold 2,144,660,478 Shares, representing about 63.11% of the issued share capital of the Company giving the right to attend and vote at the general meeting of the Company to approve the Loan Agreement). World Possession, which holds

— 3 —

LETTER FROM THE BOARD

1,423,550,686 Shares (representing about 41.89% of the issued share capital of the Company), is owned by Madam Ma (the mother of Mr. Yeung), Ms. Yeung (the sister of Mr. Yeung) and Mr. Yeung in equal shares. Mr. Yeung also personally holds 721,109,792 Shares (representing about 21.22% of the issued share capital of the Company).

GENERAL

Your attention is drawn the letters from the Independent Board Committee and First Shanghai respectively as contained in this circular and the additional information set out in the appendix to this circular.

Yours faithfully, Yeung Chi Hang Chief Executive Officer

— 4 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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UNITED POWER INVESTMENT LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 674)

3rd June, 2008

To the shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION PROVISION OF LOAN

We refer to the documents dated 3rd June, 2008 issued by the Company (the “Circular”), of which this letter forms part. Terms defined in the Circular shall bear the same meanings when used herein unless the context requires otherwise.

We have been appointed to constitute the Independent Board Committee to consider the Loan Agreement and First Shanghai has been appointed as the independent financial adviser to advise us in this respect.

Your attention is drawn to the letter from the Board and the letter from First Shanghai containing its advice to us as set out in the Circular respectively.

Taking into account the advice from First Shanghai, we consider that the terms of the Loan Agreement are fair and reasonable so far as the shareholders are concerned and the Loan Agreement is in the interests of the Company and its shareholders as a whole.

Yours faithfully,

Chan Lai Mei Lee Wai Loun LeeYuk Sang, Angus

Independent Board Committee

— 5 —

LETTER FROM FIRST SHANGHAI

The following is the text of a letter received from First Shanghai setting out its advice to the Independent Board Committee and the shareholders of the Company in respect of the connected transaction for inclusion in this circular.

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FIRST SHANGHAI CAPITAL LIMITED

19th Floor, Wing On House 71 Des Voeux Road Central Hong Kong

3rd June, 2008

To the Independent Board Committee

and the shareholders of the Company

United Power Investment Limited 2810-11, 28th Floor Shun Tak Centre West Tower 200 Connaught Road Central Hong Kong

Dear Sirs,

CONNECTED TRANSACTION PROVISION OF LOAN

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the shareholders of the Company in respect of the connected transaction, details of which are set out in the circular of the Company dated 3rd June, 2008 (the “Circular”) to the shareholders of the Company of which this letter forms a part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as those defined in the Circular.

As disclosed in the announcement of the Company dated 13th May, 2008, Well Allied, an indirect non-wholly owned subsidiary of the Company, and PLD entered into the Loan Agreement on 9th May, 2008 pursuant to which Well Allied agreed to advance a loan of HK$17.2 million to PLD, which is not in the ordinary and usual course of business of the Group.

— 6 —

LETTER FROM FIRST SHANGHAI

Well Allied is a 63.36% subsidiary of Welly Champ, which is a 75.92% owned subsidiary of the Company. The balance of 36.64% interest in Well Allied is owned by Tak Full, which is owned as to 18.4%, 18.3%, 18.3%, 38.89%, 4.44% and 1.67% by Lee Tien-Yung, Li Deh-Sheng, Philip Lu Yueh-Wei (together the “PLD Shareholders”), Fashion Investments Limited, Hao Hsin-Ming and Cheung Kwok Chung respectively. PLD is owned by the PLD Shareholders. Accordingly, PLD is a connected person of the Company.

The Loan Agreement constitutes a connected transaction under the Listing Rules pursuant to Rule 14A.63 of the Listing Rules which requires the approval of independent shareholders as the percentage ratio in respect of consideration test is more than 2.5% and the total amount of loans advanced to PLD exceeds HK$10 million. On 4th July, 2007, Well Allied advanced a loan of HK$9 million to PLD for similar purpose and so the total amount advanced by Well Allied to PLD required to be aggregated pursuant to Rule 14A.25 of the Listing Rules is HK$26.2 million. Save as aforesaid, there is no other transaction with PLD or its associates which is required to be aggregated under Rules 14A.25 of the Listing Rules.

The Stock Exchange has granted a waiver of the requirement of the independent shareholders’ approval to the Loan Agreement be given by a majority vote at a general meeting of the shareholders of the Company and accepted a written independent shareholders’ approval pursuant to Rule 14A.43 of the Listing Rules as (i) no shareholder of the Company has a material interest in the Loan Agreement and is required to abstain from voting if the Company were to convene a general meeting for the approval of the Loan Agreement; and (ii) the Company has obtained a written independent shareholders’ approval dated 9th May, 2008 of World Possession and Mr. Yeung (who are closely allied shareholders of the Company and together hold 2,144,660,478 Shares, representing about 63.11% of the issued share capital of the Company giving the right to attend and vote at the general meeting of the Company to approve the Loan Agreement). World Possession, which holds 1,423,550,686 Shares (representing about 41.89% of the issued share capital of the Company), is owned by Madam Ma (the mother of Mr. Yeung), Ms. Yeung (the sister of Mr. Yeung) and Mr. Yeung in equal shares. Mr. Yeung also personally holds 721,109,792 Shares (representing about 21.22% of the issued share capital of the Company).

The Independent Board Committee, comprising all the three independent non-executive Directors, namely Ms. Chan Lai Mei, Mr. Lee Wai Loun and Mr. Lee Yuk Sang, Angus, has been appointed to advise the shareholders of the Company in respect of the Loan Agreement. As the independent financial adviser to the Independent Board Committee and the shareholders of the Company, our role is to give an independent opinion as to (i) whether the entering into of the Loan Agreement, which is not in the ordinary and usual course of the business of the Group, is in the interests of the Company and the shareholders of the Company as a whole; and (ii) whether the terms of the Loan Agreement are of normal commercial terms, fair and reasonable so far as the shareholders of the Company are concerned.

— 7 —

LETTER FROM FIRST SHANGHAI

BASIS OF OUR OPINION

In putting forth our opinion and recommendations, we have relied on the accuracy of the information and representations included in the Circular and provided to us by the Directors and the Company, and have assumed that all such information and representations made or referred to in the Circular and provided to us by the Directors and the Company were true at the time they were made and continued to be true as at the date hereof. We have also assumed that all statements of belief, opinion and intention made by the Directors in the Circular were reasonably made after due enquiry. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and have been advised by the Directors that no material facts have been withheld or omitted from the information provided and referred to in the Circular.

We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not, however, conducted any independent verification of the information included in the Circular and provided to us by the Directors nor have we conducted any form of investigation into the business, affairs or future prospects of the Group. We have taken reasonable steps as required under Rule 13.80 of the Listing Rules in forming our opinion.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendations as to the fairness and reasonableness of the terms of the Loan Agreement, we have taken into account the following principal factors and reasons:

1. Background to and reasons for the Loan Agreement

The Group is principally engaged in hotel and restaurant operations, property investment, provision of wedding services, entertainment business and retail trading of watches and wine. As advised by the Directors and mentioned in the “Letter from the Board” of the Circular, PLD is principally engaged in investment holding.

As mentioned in the “Letter from the Board” of the Circular, on 14th July, 2006, Well Allied and PLD entered into an agreement (the “JV Agreement”), pursuant to which Well Allied and PLD agreed to cooperate to realise the benefits of various co-operation agreements (the “Co-operation Agreements”) signed by China Music Video Broadcast (Shenzhen) Company Limited (“China Music”), a wholly owned subsidiary of Well Allied, in relation to licensing of copyrights to karaoke music products to karaoke operators in the PRC, details of which are set out in the Company’s circular dated 11th August, 2006.

— 8 —

LETTER FROM FIRST SHANGHAI

PLD has entered into contracts (the “Contracts”) with various owners of copyrights (the “Licensors”) to audio-visual works for vocal accompaniment whereby PLD acquires the exclusive rights to, inter-alia, grant licence to karaoke operators the rights to replicate and play audio-visual works with vocal accompaniment. PLD is required to make payments of approximately HK$17.2 million due under the Contracts. We have reviewed the Contracts provided by the Company and consider that the amounts due by PLD are commensurate with the amounts stated in the Contracts respectively.

In order to enable PLD to perform its obligations under the JV Agreement, Well Allied agreed to make the loan of HK$17.2 million to PLD (which is not in the ordinary and usual course of business of the Group) to finance PLD’s payments due under the Contracts. As referred to the Company’s announcement dated 4th July, 2007 and the “Letter from the Board” of the Circular respectively, Well Allied advanced HK$9 million to PLD for similar purpose on 4th July, 2007 (the “Previous Loan”) at an annual interest rate of 8% and is repayable within one year from the date of the relevant loan agreement.

According to the annual report of the Company for the year ended 31st March, 2007, the Directors believe that the new operation relating to collection of fees for licensing of copyright to karaoke music products to karaoke operators in the PRC will broaden the income source of the Group and facilitate the Group to build up a distribution network of karaoke operators in the PRC for future expansion of the Group’s business. The Directors consider that the loan advanced to PLD under the Loan Agreement will enable Well Allied to receive benefits from licensing of copyrights granted under the Contracts to karaoke music products to karaoke operators in the PRC under the Cooperation Agreements. We share the view of the Directors that the loan advanced to PLD under the Loan Agreement will facilitate the business development of Well Allied and China Music and in turn the Group will be able to share the benefits of the positive development of Well Allied and China Music.

Further, given the amount of the loan under the Loan Agreement is based on the face value of the balance of the amounts due by PLD to the Licensors under the Contracts and additional fund is required in addition to the Previous Loan, we are of the view that the entering into of the Loan Agreement with similar terms of the Previous Loan, though is not in the ordinary and usual course of business of the Group, is fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole.

— 9 —

LETTER FROM FIRST SHANGHAI

2. Principal terms of the Loan Agreement

(i) Interest rate

The interest rate under the Loan Agreement is 5.25% per annum. As mentioned in the “Letter from the Board” of the Circular, the terms of the Loan Agreement were arrived at after arm’s length negotiations with reference to the prevailing prime rate of banks in Hong Kong. Given the interest rate under the Loan Agreement is consistent with the prevailing Hong Kong dollars prime rate offered by the commercial banks in Hong Kong, we concur with the Directors’ view that the interest rate under the Loan Agreement is on normal commercial term, fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole.

(ii) Security

We note that the loan to PLD will be provided on an unsecured basis. As confirmed by the Directors, given that the Company has an effective interest of approximately 48.10% in China Music (being 63.36% interest in Well Allied through Welly Champ which in turn is 75.92% owned by the Company), the Group has significant influence on the management of China Music and rights over the assets of China Music and the licence fees to be received from the karaoke operators being shared by PLD and Well Allied. Based on our discussion with the Directors, should PLD default on the loan repayment, the Group can influence China Music to withhold PLD’s right on receiving such licence fees. The recoverability of the loan to PLD will be more secured. As such, we are of the view that the provision of unsecured loan to PLD is a fair and reasonable arrangement.

(iii) Repayment and facility period

The principal amount should be repayable in full by PLD within 1 year from the date of the Loan Agreement. Given the fact that the business of collection of fees for licensing of karaoke music products is at an advanced stage, the repayment time and facility period is in line with the development of such business. As such, we are of the view that such repayment term of the Loan Agreement is fair and reasonable.

FINANCIAL EFFECT ON THE GROUP

As at 31st March, 2007 and 30th September, 2007, the Group had cash and cash equivalents of approximately HK$438.2 million and HK$399.0 million respectively. In view of the Group’s strong financial position, we are of the view that the provision of loan to PLD will not have any adverse impact on the overall financial position of the Group.

— 10 —

LETTER FROM FIRST SHANGHAI

RECOMMENDATION

Having taken into account the above principal factors and reasons, we are of the view that the entering into of the Loan Agreement, though is not in the ordinary and usual course of the business of the Group, is in the interests of the Company and the shareholders of the Company as a whole, and that the terms of the Loan Agreement are of normal commercial terms, fair and reasonable so far as the shareholders of the Company are concerned. If a general meeting of the shareholders of the Company is to be held for the purpose of considering and if thought fit, approving the Loan Agreement, we would recommend the Independent Board Committee to advise the shareholders of the Company to vote in favour of the ordinary resolution to approve the Loan Agreement.

Yours faithfully, For and on behalf of First Shanghai Capital Limited Helen Zee Eric Lee Managing Director Deputy Managing Director

— 11 —

GENERAL INFORMATION

APPENDIX

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable inquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

DISCLOSURE OF INTERESTS

Interests of Directors

As at the Latest Practicable Date, the interests of the Directors in the share capital of the Company 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 which they were taken or deemed to have under such provisions of the SFO), or were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

			Percentage of
Name	Number of Shares	Nature of interest	shareholding
Ma Shuk Kam	1,445,550,686	(Note 1)	42.54
Yeung Chi Hang	2,144,660,478	(Note 2)	63.11
Liu Yu Mo	1,048,000	Personal	0.03
Au Edmond Wah	1,000,000	Personal_(Note 3)_	0.03

Notes:

1. 1,423,550,686 Shares are owned by World Possession, which is beneficially owned by Madam Ma, Mr. Yeung and Ms. Yeung in equal shares, and 22,000,000 Shares are owned by Madam Ma personally.

2. 1,423,550,686 Shares are owned by World Possession, which is beneficially owned by Madam Ma, Mr. Yeung and Ms. Yeung in equal shares, and 721,109,792 Shares are owned by Mr. Yeung personally.

3. This relates to the options granted to Mr. Au Edmond Wah to subscribe for 1,000,000 Shares at the exercise price of HK$0.2254 per Share from 13th December, 2005 to 30th August, 2012.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or any chief executive of the Company had an interest or short position in any shares, underlying shares or debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which would have 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 he was taken or deemed to have under such provisions of the SFO) or which was required, pursuant to

— 12 —

GENERAL INFORMATION

APPENDIX

section 352 of the SFO, to be entered in the register referred to therein, or pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules to be notified to the Company and the Stock Exchange.

Interests of other persons in the share capital of the Company

As at the Latest Practicable Date, so far as is known to the Directors, the following persons (other than a Director or chief executive of the Company) had an interest in the shares and 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:

			Percentage of
Name	Number of shares	Nature of interest	Shareholding
World Possession	1,423,550,686	Beneficial owner	41.89

Save as disclosed above, as at the Latest Practicable Date, according to the register of interests required to be kept by the Company under section 336 of the SFO, there was no person who had any interest or short position in the 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.

Madam Ma and Mr. Yeung are directors of World Possession.

Interests in other members of the Group

As at the Latest Practicable Date, so far as is known to the Directors, the following persons (other than a Director or chief executive of the Company) were, directly or indirectly, interested in 10% or more of the nominal value of the share capital carrying rights to vote in all circumstances at general meetings of the following subsidiaries of the Company:

• (a) Mr. Poon Tak Yip was interested in (i) 25% of the issued share capital of Reli-a-bo Entertainment Limited (“Reli-a-bo”) and (ii) 20% of the issued share capital of Wellprecise Limited through Nation Group Limited;

• (b) Mr. Wong Chor Ming was interested in 10% of the issued share capital of Reli-a-bo;

• (c) Mr. Yuen Tak Yau, Daniel was interested in 40% of the issued share capital of Witty Ventures Limited and HMS Watches Company Limited respectively;

• (d) each of Long Sincere International Limited and Rise Jumbo Limited was interested in 12.04% of the issued share capital of Welly Champ;

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GENERAL INFORMATION

APPENDIX

• (e) Tak Full was interested in 36.64% of the issued share capital of Well Allied;

• (f) Impeccable Group Limited was interested in 49% of the issued share capital of Le Caveau Limited;

• (g) Smooth Luck Investments Limited was interested in 40% of the issued share capital of Genius Star International Limited;

• (h) Mr. Ng Lok Shing Ronald was interested in 49% of the issued share capital of Baron Productions and Artiste Management Company Limited and Solid Sound Productions Limited;

• (i) Media Business Services Limited was interested in 49% of the issued share capital of Wise Reach Investments Limited;

• (j) Mr. Chan Siu Kei and Ms. Wong Oi Kwan Jenny Natalie were interested in 30% and 10% of the issued share capital of Chance Music Limited respectively; and

• (k) 北京金英馬影視文化有限責任公司 (English transliteration: Beijing Jingyingma Movie and Television Culture Company Limited) was interested in 40% of the issued share capital of 北京金英馬國際文化交流有限公司 (English transliteration: Beijing Jingyingma Internationl Cultural Exchange Company Limited).

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any person (other than a Director or chief executive of the Company) who was interested, directly or indirectly, in 10% or more of the issued shares of any subsidiary of the Company or any options in respect of such capital.

Interests of expert in the Group

First Shanghai does not have any shareholding in any company in the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any company in the Group.

Service contracts

There is no existing or proposed service contract between any member of the Group and any Director or proposed Director (excluding contracts expiring or determinable by the Company within one year without payment of compensation (other than statutory compensation)).

Competing business

None of the Directors or any of their respective associates has any interest in any business which competes or is likely to compete, either directly or indirectly, with the Group’s business.

— 14 —

GENERAL INFORMATION

APPENDIX

Interests in assets

Since 31st March, 2007, the date of the latest published audited financial statements of the Group, none of the Directors has any direct or indirect interest in any assets acquired or disposed of by or leased to or proposed to be acquired or disposed of by or leased to any member of the Group except the following:

• (a) an agreement dated 13th April, 2007 between (i) Wise Mark Group Limited (“Wise Mark”), a wholly owned subsidiary of the Company; and (ii) Mr. Yeung and Well Harvest Enterprises Limited (“Well Harvest”) (the “Share Vendors”) whereby Wise Mark agreed to purchase from the Share Vendors the entire issue share capital of Shenzhen Land Company Limited (“Shenzhen Land”) for a total consideration of HK$31,565,901;

• (b) an agreement dated 13th April, 2007 between (i) Golden Island (Management) Limited; and (ii) Well Harvest whereby Golden Island (Management) Limited agreed to acquire from Well Harvest all the benefits of an interest fee unsecured loan of HK$16,434,099 advanced to Shenzhen Land for a consideration of HK$16,434,099;

• (c) an agreement dated 15th October, 2007 between (i) the Company; and (ii) Well Harvest whereby the Company agreed to acquire from Well Harvest the entire issued share capital of, and the benefits of all shareholders’ loans to, Wellrich Investments Limited for an aggregate consideration of HK$355.6 million, HK$120 million of which were paid in cash and the balance of HK$235.6 million satisfied by the issued and allotment of 699,109,792 Shares;

• (d) the following tenancy agreements were entered into between associates of Madam Ma and/or Mr. Yeung as landlords and Golden Island Catering Group Company Limited as tenant:

• (i) Tenancy agreement dated 30th November, 2006 relating to No. 135, Waterloo Road, Kowloon, Hong Kong

Landlord Term Monthly rent West Global 1st December, 2006 HK$180,000 (exclusive of rates, Investments to 30th November, management fees and government Limited (an 2008 (with an option rent which are payable to associate of Madam to renew for a further independent third parties) Ma and Mr. Yeung) term of 1 year at the then prevailing market rent)

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GENERAL INFORMATION

APPENDIX

• (ii) Tenancy agreement dated 1st January, 2008 relating to Workshop Space B on the 2nd Floor, Fung Wah Factorial Building, Nos. 646, 648 and 648A Castle Peak Road, Kowloon, Hong Kong

Landlord	Term	Monthly rent
Source Expand	1st January, 2008 to	HK$19,000 (exclusive of rates,
Development	31st December, 2009	management fees and government
Limited (an		rent which are payable to
associate of Madam		independent third parties)
Ma and Mr. Yeung)

• (iii) Tenancy agreement dated 21st June, 2006 relating to Unit 2811 on the 28th Floor of West Tower, Shun Tak Centre, Nos. 168-200 Connaught Road Central, Hong Kong

Landlord	Term	Monthly rent
High Brand Limited	1st July, 2006 to 30th	HK$66,430 from 1st July, 2006
(an associate of	June, 2008	to 30th June, 2008 (exclusive
Madam Ma)		of rates, management fees and
		government rent which are
		payable to independent third
		parties)

• (e) the following tenancy agreements were entered into between Great China Limited, an associate of Mr. Yeung, as landlord and two subsidiaries of the Company as tenants:

• (i) Tenancy agreement dated 1st May, 2006 (as amended on 21st June, 2006) relating to Shop Unit Nos.1F8A on the First Floor of Grand Waldo Hotel (the “Hotel”), Cotai, Macau

		Monthly rent, management fee
Tenant	Term	and air conditioning charges
HMS Watches	1st May, 2006 to 30th	HK$19,228
Company Limited	April, 2009

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GENERAL INFORMATION

APPENDIX

• (ii) Tenancy agreement dated 1st May, 2006 relating to Shop Unit No. GF6 on the Ground Floor of the Hotel

Monthly rent, management fee Tenant Term and air conditioning charges Le Caveau Limited 1st May, 2006 to 30th HK$49,938 April, 2009

Save as disclosed above, none of the Directors or First Shanghai is materially interested in any contract or arrangement subsisting at the date of this circular which is significant in relation to the business of the Group taken as a whole.

MATERIAL CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31st March, 2007, being the date to which its latest published audited financial statements were made up.

QUALIFICATION OF EXPERT

The qualifications of the expert who has given opinions in this circular are as follows:

Name Qualification

First Shanghai a license corporation to carry out type 6 (advising on corporate finance) regulated activity under the SFO

CONSENT

First Shanghai has given and has not withdrawn its written consent to the issue of this circular with copy of its letter and the references to its name included herein in the form and context in which they are respectively included.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of Jennifer Cheung & Co. at Unit A, 19th Floor, Two Chinachem Plaza, 68 Connaught Road Central, Hong Kong during normal business hours up to and including 17th June, 2008:

• (a) the Loan Agreement; and

• (b) the written consent referred to in the paragraph headed “Consent” in this appendix.

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