At a disciplinary hearing held on 23 May 2003 (the "Disciplinary Hearing"), the Listing Committee of the Exchange (the "Listing Committee") conducted a hearing into the conduct of, among others, the Company and the Former Executive Director, in respect of 11 lots of connected transactions as disclosed in the Company's announcement dated 31 August 2000 (the "Connected Transactions").

The Disciplinary Hearing was conducted into, among other things, the following issues:

1. Possible breaches by the Company of its obligations under (1) Rules 14.25(1), 14.25(2)(a) and 14.25(2)(b)(ii) of the Exchange Listing Rules in failing to disclose particulars of relevant Connected Transactions in the annual report and accounts of the Company and (except for two lots of transactions falling within Rules 14.25(2)(a) and 14.25(2)(b)(ii) respectively) by way of a press notice as soon as possible after they were entered into; (2) Rule 14.26(6)(a) of the Exchange Listing Rules in failing to obtain independent shareholders' approval for relevant Connected Transactions at the relevant time; and (3) Rule 14.29 of the Exchange Listing Rules in failing to notify the Exchange of relevant Connected Transactions and dispatching a circular in respect of such transactions to shareholders; and

2. Possible breaches by the Former Executive Director (among others) of his obligations under the Declaration and Undertaking with regard to Directors given by him to the Exchange in the form set out in Appendix 5B of the Exchange Listing Rules (the "Director's Undertaking").

The Listing Committee has concluded, among other things:

1. the Company breached Rules 14.25(1), 14.25(2)(a), 14.25(2)(b)(ii), 14.26(6)(a) and 14.29 of the Exchange Listing Rules; and

2. the Former Executive Director breached his Director's Undertaking to comply to the best of his ability with the Exchange Listing Rules and use his best endeavours to procure that the Company would comply with the Exchange Listing Rules.

Accordingly, the Listing Committee hereby publicly criticises the Company and the Former Executive Director for their respective breaches mentioned in (i) and (ii) above.

Mr Pan Jinbo ("Mr Pan") was an executive director of the Company when a number of the Connected Transactions were concluded. However, as the Exchange was not able to effect service of the documents relating to the disciplinary hearing on Mr Pan, the Listing Committee had not made any determination in respect of Mr Pan. The Exchange reserves its right to consider the position of Mr Pan as and when he can be served with the relevant documents concerning the disciplinary proceedings.

For the avoidance of doubt, the Exchange confirms that this public criticism statement applies only to the Company and the Former Executive Director named herein and not to any other past or present member of the Board of Directors of the Company.