Discloseable Transaction - Circular

THIS DOCUMENT 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, a bank manager, solicitor, professional accountant or other professional adviser. If you have sold all your shares in Zhejiang Expressway Co., Ltd., you should at once pass this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser. 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. Zhejiang Expressway Co., LTD. (a joint stock limited company incorporated in the People's Republic of China with limited liability) (Stock Code: 0576) DISCLOSEABLE TRANSACTION A letter from the Board is set out on pages 4 to 12 of this circular. 16th May, 2006 CONTENTS Definitions 1 Letter from the Board 4 Appendix - General Information 13 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: "Acquisitions" means the acquisitions by Shangsan Co for an aggregate of 70.46% equity interest in Kinghing Securities, as to 58.46% (in aggregate), 6% and 6% equity interest from Kinghing Investment, Taizhou Investment and Tonghe Investment respectively under the Agreements; "Agreements" means the (i) two agreements entered into between Shangsan Co and Kinghing Investment, (ii) one agreement entered into between Shangsan Co and Taizhou Investment and (iii) one agreement entered into between Shangsan Co and Tonghe Investment, each on 20th April, 2006, whereby Shangsan Co has agreed to acquire 47.05%, 11.41%, 6% and 6% of the equity interest in Kinghing Securities respectively; "Audited Financial Report" means the audited financial report [2006] No.536 prepared by the Company's accountants in the PRC, Zhejiang Pan-china Certified Public Accountants, in relation to Kinghing Securities, and prepared in accordance with the generally accepted accounting principles in the PRC; "Communications Investment means Zhejiang Communications Investment Group Group" Co., Ltd., a substantial shareholder of the domestic shares of the Company; "Company" means Zhejiang Expressway Co., Ltd., a joint stock limited company incorporated in the PRC, whose shares are listed on the main board of the Stock Exchange; "connected person(s)" have the same meaning given to it under the Listing Rules; "Development Co" means Zhejiang Expressway Investment and Development Co., Ltd., a 51% owned subsidiary of the Company; "Director(s)" means the director(s) of the Company; "CSRC" means the China Securities Regulatory Commission; "Group" means the Company and its subsidiaries; "Huajian Transportation" means Huajian Transportation Economic Development Center, a substantial shareholder of the domestic shares of the Company; "Kinghing Investment" means Kinghing Trust Investment Co., Ltd., a PRC incorporated limited liability company (limited by shares); "Kinghing Securities" means Kinghing Securities Co., Ltd., a limited liability company incorporated in the PRC in May 2002; "Latest Practicable Date" means 8th May, 2006, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular; "Listing Rules" means the Rules Governing the Listing of Securities on the Stock Exchange; "PRC" means the People's Republic of China; "PRC Court Judgment" means the civil judgment of the Zhejiang Jinhua City Intermediate People's Court dated 19th April, 2006 pursuant to which a third party is ordered to transfer its 11.41% equity interest in Kinghing Securities to Kinghing Investment; "Restructuring" means the restructuring of Kinghing Securities as described in the section headed "Background and Restructuring of Kinghing Securities" in this circular; "SFO" means the Securities and Futures Ordinance of Hong Kong; "Shanghai Clearing" means the Shanghai branch of the PRC Securities Registration and Clearing Co., Ltd., the entity authorised by the CSRC and the State Administration for Industry and Commerce to carry out registration and clearing services for securities tradings in the PRC; "Shanghai means Shanghai National Telecommunications Co., Telecommunications" Ltd., a PRC incorporated limited liability company; "Shanghai Transportation" means Shanghai Jiao Yun Co., Ltd., a PRC incorporated limited liability company; "Shangsan Co" means Zhejiang Shangsan Expressway Co., Ltd., a PRC incorporated limited liability company which is owned as to 73.625% by the Company, 18.375% by Huajian Transportation, 5% by Tiantai County Transport Development Company and 3% by Shangyu Municipal Transport Investment Company; "substantial shareholder(s)" have the same meaning given to it under the Listing Rules; "Supervisor(s)" means the supervisor(s) of the Company; "Stock Exchange" means The Stock Exchange of Hong Kong Limited; "Taizhou Investment" means Taizhou City Investment and Management Co., Ltd., a PRC incorporated limited liability company; "Taizhou State-Owned" means Taizhou State-owned Assets Operations Co., Ltd., a company solely owned by the State of the PRC; "Tonghe Investment" means Tonghe Investment Holdings Co., Ltd., a PRC incorporated limited liability company; and "Zhejiang Real Estate" means Zhejiang Hexin Real Estate Co., Ltd., a PRC incorporated limited liability company. LETTER FROM THE BOARD Zhejiang Expressway Co., LTD. (a joint stock limited company incorporated in the People's Republic of China with limited liability) (Stock Code: 0576) Board of directors Registered address: 19th Floor, Executive directors Zhejiang World Trade Center, Geng Xiaoping 122 Shuguang Road, Fang Yunti Hangzhou, Zhejiang Province, Zhang Jingzhong 310007, JIANG Wenyao The People's Republic of China Non-executive directors Zhang Luyun Zhang Yang Independent non-executive directors Tung Chee Chen Zhang Junsheng Zhang Liping 16th May, 2006 To the Shareholders Dear Sir and Madam, DISCLOSEABLE TRANSACTION INTRODUCTION It was announced by the Directors on 25th April, 2006 that Shangsan Co, a subsidiary of the Company, had entered into the Agreements on 20th April, 2006 to acquire in aggregate a 70.46% equity interest in Kinghing Securities. The Acquisitions contemplated under the Agreements, in aggregate, constitute a discloseable transaction of the Company under the Listing Rules. ACQUISITION AGREEMENTS Shangsan Co has entered into the Agreements with each of Kinghing Investment, Taizhou Investment and Tonghe Investment for the Acquisitions of an aggregate of 70.46% equity interest in Kinghing Securities. Except for the identities of the transferor parties and the percentage of equity interest in Kinghing Securities to be acquired by Shangsan Co (for details, please refer to "The Acquisitions" below), the principal terms of each of the Agreements are identical. Date: 20th April, 2006. The Acquisitions: Shangsan Co has agreed to acquire as to 58.46% (in aggregate), 6% and 6% equity interest in Kinghing Securities from Kinghing Investment, Taizhou Investment and Tonghe Investment respectively. Consideration for the Nil consideration is payable to Kinghing Investment, Acquisitions: Taizhou Investment and Tonghe Investment for the Acquisitions. However, under the Agreements, Shangsan Co has agreed to participate in the Restructuring of Kinghing Securities, which will involve, among other things, Shangsan Co injecting additional capital in cash into Kinghing Securities. Please see the section headed "Background and Restructuring of Kinghing Securities" below for further details of the Restructuring. Conditions for completion: Completion of each of the Acquisitions is subject to the Agreements being approved by (i) the equity owners of Kinghing Securities as required under its articles of association and (ii) the CSRC. The approvals from the equity owners of Kinghing Securities and the CSRC are expected to be obtained on or before 31st May, 2006 and completion of the Acquisitions is expected to take place following the obtaining of these approvals. Completion of each of the Acquisitions is not subject to the completion of the other Acquisitions. Shangsan Co has entered into two separate agreements with Kinghing Investment with respect to the acquisition of 11.41% and 47.05% of the equity interest in Kinghing Securities respectively. The acquisition of the 11.41% equity interest is subject to the completion of enforcement of the PRC Court Judgment dated 19th April, 2006 ordering the transfer of such equity interest from a third party to Kinghing Investment. The enforcement of the PRC Court Judgment is currently expected to be completed on or before 31st May, 2006. BACKGROUND AND RESTRUCTURING OF KINGHING SECURITIES Kinghing Securities is a limited liability company established under PRC laws and is licensed to carry on the businesses of securities broking, securities underwriting, asset management, advising on securities investment and establishment of securities investment funds, each in the PRC. Kinghing Securities carries on its businesses through its 20 operational branches and 16 sales branches, which are mainly located in the Yangtze River Delta region in the PRC. Kinghing Securities in turn owns a 60% equity interest in Shanghai Kinghing Securities Research Co., Ltd., which is engaged in businesses including the provision of investment advisory, corporate financing, corporate management and financial information consultation services, and sales of computers and software. The holder of the remaining 40% equity interest in Shanghai Kinghing Securities Research Co., Ltd. and their ultimate beneficial owners are not connected persons of the Company. Immediately prior to and after the Acquisitions, the ownership of the equity capital of Kinghing Securities is as follows: Name of the equity Percentage of holding in Percentage of holding in the holders: the equity capital equity capital immediately immediately prior to the after the Acquisitions: Acquisitions: Shangsan Co Nil 70.46% (assuming that the enforcement of the PRC Court Judgment is completed) Kinghing Investment 58.46% (of which 11.41% is Nil subject to the enforcement of the PRC Court Judgment) Shanghai 10% 10% Telecommunications Taizhou Investment 10% 4% (Note) Tonghe Investment 10% 4% Shanghai Transportation 7.69% 7.69% Zhejiang Real Estate 3.85% 3.85% Note: On 20th April, 2006 and following the entering into the Agreements, Taizhou Investment transferred its remaining 4% equity interest in Kinghing Securities to Taizhou State-Owned. In consideration of each of the Acquisitions for an aggregate of the 70.46% equity interest in Kinghing Securities, Shangsan Co has agreed to participate in the Restructuring of Kinghing Securities as described below. Pursuant to the Restructuring, Shangsan Co has agreed to inject additional capital into Kinghing Securities for a total amount of RMB600 million in cash for itself and on behalf of certain holders of equity interests in Kinghing Securities in proportion to their respective interests in Kinghing Securities in several instalments. As at the Latest Practicable Date, Shangsan Co had injected RMB575 million to Kinghing Securities. The Company expects that Shangsan Co will inject the remaining amount of RMB25 million to Kinghing Securities by the end of June, 2006. Shanghai Telecommunications, Taizhou State-Owned and Tonghe Investment have provided undertakings in writing to Shangsan Co to repay Shangsan Co the amounts of capital contributed by Shangsan Co on their respective behalf, namely, RMB60 million, RMB24 million and RMB24 million respectively, by assigning to Shangsan Co their rights to receive future dividends from Kinghing Securities, until their repayment obligations are discharged in full. The Company currently expects to obtain an undertaking in writing from Zhejiang Real Estate to repay the capital contribution by Shangsan Co on its behalf of an amount of RMB23.1 million before 31st May, 2006, by assigning to Shangsan Co its rights to receive future dividends from Kinghing Securities. However, Shanghai Transportation has refused to provide an undertaking to repay capital contribution of an amount of RMB46.14 million made by Shangsan Co on its behalf. Therefore, the Company does not expect receiving repayment from Shanghai Transportation of the amount of RMB46.14 million even if there is any dividend payable by Kinghing Securities to its equity holders in the future. Also, no guarantee or security will be provided to Shangsan Co by any equity owner of Kinghing Securities for the repayment of capital contribution made by Shangsan Co on their behalf. The Directors consider that the accounting treatment of capital contribution to Kinghing Securities by Shangsan Co on behalf of other parties should be treated as follows: (i) the capital contribution to Kinghing Securities made by Shangsan Co of an aggregate amount of RMB108 million on behalf of Shanghai Telecommunications, Taizhou State-Owned and Tonghe Investment who have provided undertakings to repay Shangsan Co will be accounted as indebtedness to Shangsan Co; (ii) the capital contribution of an amount of RMB23.1 million made by Shangsan Co on behalf of Zhejiang Real Estate will be accounted as indebtedness to Shangsan Co if Zhejiang Real Estate provides an undertaking to Shangsan Co to repay the amount, but if Zhejiang Real Estate will not provide an undertaking to repay Shangsan Co, the RMB23.1 million capital contribution will be accounted as investment of Shangsan Co in Kinghing Securities; and (iii) the capital contribution of an amount of RMB46.14 million made by Shangsan Co on behalf of Shanghai Transportation who will not provide an undertaking will be accounted as investment of Shangsan Co in Kinghing Securities, even though the equity interest of Shangsan Co in Kinghing Securities will remain at 70.46%. Based on the information provided by the management of the Company, the Hong Kong auditors of the Company, Deloitte Touche Tohmatsu, have advised that nothing came to their attention to suggest that the Company's accounting treatment should be different from that described as above. No audit or review on the aforementioned accounting treatment has been carried out in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. In addition, no verification has been carried out by Deloitte Touche Tohmatsu on the accuracy and completeness of the information provided by the management of the Company. The PRC legal advisers of the Company, Zhejiang T&C Law Firm, have advised the Company that it is legal under the PRC regulations for Shangsan Co to inject such capital on behalf of other equity holders of Kinghing Securities. The Company currently expects to receive dividends from Kinghing Securities for full repayment of the amount of capital contribution made by Shangsan Co on behalf of the other equity holders of Kinghing Securities according to their undertakings provided to Shangsan Co in about five years' time. However, there is no assurance that Kinghing Securities will distribute any dividends and that Shangsan Co will receive repayment for the amount of such capital contribution in the future. Apart from the RMB600 million additional capital contribution, there is no other capital commitment by Shangsan Co to Kinghing Securities. REASONS FOR THE ACQUISITIONS Prevent potential loss of value of the bonds owned by the Company The Company has been investing in treasury bonds issued by the PRC Government since its listing on the Stock Exchange. Under the PRC laws, the Company is required to invest such bonds through a licensed securities firm in the PRC and deposit such bonds with them. Since June 2001, the Company has invested its treasury bonds through Kinghing Securities. As at 30th December, 2005, the value of the treasury bonds beneficially owned by the Company and held with Kinghing Securities was of an approximate aggregate amount of RMB587 million. Prior to the date of the Agreements, Kinghing Securities had pledged the treasury bonds as security for certain third party repo trading transactions entered into by it through Shanghai Clearing, without prior notification to nor consent from the Company. Subsequent to the pledging of the treasury bonds, Kinghing Investment, the largest equity owner of Kinghing Securities at the relevant time, had misappropriated funds of Kinghing Securities such that Kinghing Securities did not have sufficient funds to settle the relevant repo trading transactions, and as a result, the security over the treasury bonds beneficially owned by the Company may be enforced. On 30th December, 2005, the Company was notified by the Zhejiang provincial government of its decision to suspend the business of and to restructure Kinghing Investment. The Company was also instructed by the Zhejiang provincial government to temporarily suspend its trading of its treasury bonds held in its investment account with Kinghing Securities for the sake of maintaining financial stability. As a result, the Company had been unable to withdraw the bonds from Kinghing Securities. On 10th March, 2006 and in the course of the investigation on Kinghing Investment led by the Zhejiang provincial government, the Company became aware that the treasury bonds it held with Kinghing Securities were at risk of being enforced as security. The Company did not make an announcement at that time because the terms of the Restructuring had not been finalised before the Agreements were entered into on 20th April, 2006 and there was no realised loss of the value of the bonds if the Company is able to prevent the enforcement of security through its participation in the Restructuring. In light of the above circumstances, the Company has decided to participate in the Restructuring, through which additional RMB600 million capital contribution will be injected by Shangsan Co into Kinghing Securities, to enable Kinghing Securities to settle the repo trading transactions currently of an approximate amount of RMB600 million and to obtain the release of the security over the treasury bonds beneficially owned by the Company. The Company has considered it to be highly likely that the Company would not be able to recover the full value of the bonds by claiming against Kinghing Securities. By investing in Kinghing Securities, the Company believes that it can avoid the potential loss of the value of the bonds. Having obtained the release of the security over the treasury bonds, the Company has already fully recovered its treasury bonds as of the Latest Practicable Date. Investment in Kinghing Securities Upon the completion of the Acquisitions, the Company will be interested in 70.46% in Kinghing Securities. Kinghing Securities will be treated as a subsidiary of the Company and will be consolidated into the Company's financial statements after completion of the Acquisitions. The Company intends to set up a management team with suitable qualifications to supervise the day-to-day operations of Kinghing Securities. The Company is optimistic that the business of Kinghing Securities will be turned around under the improving business environment for securities companies in the PRC. Based on the Audited Financial Report, as at 31st December, 2005, Kinghing Securities had a negative net asset value of RMB187,877,793. For the year ended 31st December, 2005, the operating cash inflow of Kinghing Securities from its operating activities was RMB273 million and operating cash outflow was RMB317 million, with net cash outflow amounting to RMB44 million. According to the Audited Financial Report, the net loss before and after taxation, minority interest and extraordinary items attributable to the assets of Kinghing Securities for the year ended 31st December, 2005 were RMB80,573,704 and RMB719,414,903 respectively and the taxation, minority interest and extraordinary items were RMB37,893, RMB-3,339,618 and RMB642,142,923 respectively. Of the RMB642,142,923 amount of extraordinary items, RMB607,342,923 relates to the loss due to the misappropriation of funds in Kinghing Securities by Kinghing Investment and the remaining RMB34,800,000 relates to a loss due to the payment of guarantee obligations of Kinghing Securities. The net loss before and after taxation, minority interest and extraordinary items for the year ended 31st December, 2004 were RMB48,660,386 and RMB50,427,093 respectively. However, the Company expects that, immediately following the completion of the Restructuring and the injection of the RMB600 million new capital to Kinghing Securities and Kinghing Securities' settlement of the repo trading transactions, the book value of the total assets of Kinghing Securities will be between RMB400 million to RMB450 million. Kinghing Securities currently has sufficient working capital for its operations of business and to satisfy the minimum requirements under the relevant PRC regulations. The Company has no intention to change the Group's current principal businesses, being the investment in and development of expressways in the Zhejiang Province of China. The Directors believe that the Acquisitions will not have material impact on the earnings, assets and liabilities of the Group. Views of the Directors The independent non-executive Directors of the Company have expressed concerns over the Acquisitions, in particular the investment is in a securities company which carries on business outside the scope of business of the Group and the financial risks borne by the Company if Shangsan Co is unable to dispose of its interests in Kinghing Securities in the future. The Company understands the concerns of the independent non-executive Directors, however, having assessed the potential loss of the Company of an amount of approximately RMB600 million of the bonds held with Kinghing Securities and the potential income earning opportunities of Kinghing Investment in the future, considered that it was in the best interests of the Company to enter into the Agreements. The Directors (including the independent non-executive Directors, except for Ms. Zhang Yang who abstained in voting at the meeting of the board of directors approving the Agreements), having regard to the background of the Acquisitions as described above, believe that the terms of the Agreements, which were determined after arm's length negotiations, are the best terms the Company could obtain under such circumstances, and are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. The Acquisitions contemplated under the Agreements, in aggregate, constitute a discloseable transaction of the Company under the Listing Rules and are required to be disclosed by way of the Company's announcement dated 25th April, 2006 and this circular. BASIS OF THE CONSIDERATION The consideration for the Acquisitions was determined after considering the assets and liabilities, and profit and loss positions, the intrinsic investment value of Kinghing Securities and arms-length negotiations between Shangsan Co and Kinghing Investment, Taizhou Investment and Tonghe Investment respectively. FUNDING FOR THE CAPITAL INJECTION The RMB600 million capital injection to Kinghing Securities by Shangsan Co will be financed by the internal funds of Shangsan Co. RESTRICTIONS TO SUBSEQUENT SALE The Agreements do not include any restriction on Shangsan Co for its sale of the equity interest in Kinghing Securities it acquired under the Agreements. Any subsequent sale of the equity interest by Shangsan Co shall comply with the relevant PRC laws. INFORMATION RELATING TO THE COMPANY AND SHANGSAN CO The Company was incorporated on 1st March, 1997 in the PRC and is a joint stock limited company, currently with a registered share capital of RMB4,343,114,500 (approximately HK$4,174,867,346). The main business of the Group is investment in and development, operation, management and toll collection of Shanghai-Hangzhou-Ningbo Expressway and Shangsan Expressway, both in Zhejiang Province of the PRC, as well as businesses ancillary to the operation of the two expressways, such as billboard advertising and operation of service areas on the expressways. Shangsan Co is a PRC incorporated limited liability company owned as to 73.625% by the Company, 18.375% by Huajian Transportation, 5% by Tiantai County Transport Development Company and 3% by Shangyu Municipal Transport Investment Company. Huajian Transportation is a substantial shareholder of the Company whereas Tiantai County Transport Development Company and Shangyu Municipal Transport Investment Company are independent third parties of the Company. The principal business of Shangsan Co is the investment in the Shangsan Expressway operated by the Group. INFORMATION RELATING TO COUNTERPARTIES OF THE AGREEMENTS Kinghing Investment is a PRC incorporated limited liability company engaged in businesses including provision of trustee and custodian, fund management, corporate financing, corporate management, financial advisory, securities underwriting, and investment management services. Taizhou Investment is a PRC incorporated limited liability company engaged in businesses including provision of investment management and corporate management advisory services, and investment. Tonghe Investment is a PRC incorporated limited liability company engaged in investments as permitted by the PRC laws and regulations. Shanghai Telecommunications is a PRC incorporated limited liability engaged in businesses including telecommunications, manufacturing of communication equipment and computers, communication engineering and relevant consulting services. Shanghai Transportation is a PRC incorporated limited liability engaged in businesses including road transport, vehicle repair, manufacturing of vehicle parts, construction equipment and special vehicles, and sales of special vehicles. Zhejiang Real Estate is a PRC incorporated limited liability engaged in businesses including real estate development, indoor furnishings, and wholesale and retail of construction materials. To the best of the Directors' knowledge, information and belief and after having made all reasonable enquiry, Kinghing Investment, Taizhou Investment, Tonghe Investment, Shanghai Telecommunications, Shanghai Transportation and Zhejiang Real Estate, and their respective ultimate beneficial owners, are third parties independent of the Company and its connected persons of the Company. ADDITIONAL INFORMATION Your attention is drawn to the information set out in the Appendix to this circular. Yours faithfully, By Order of the Board ZHANG Jingzhong Company Secretary APPENDIX GENERAL INFORMATION 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 enquires, 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. Directors' interests in securities As at the Latest Practicable Date, the interests and short positions of the Directors, Supervisors, and the chief executive in the shares, underlying shares and debentures of the Company or any associated corporations (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 interests and short positions which they have taken on were 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 to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows: Name Position Contribution Nature of Percentage of interest of registered registered capital to capital in Development Development Co Co (RMB) Mr. Geng Xiaoping Chairman 2,400,000 beneficially 3.00% owned(1) Mr. Fang Yunti Director/Chief 1,920,000 beneficially 2.40% executive owned(2) Mr. Jiang Wenyao Director 1,320,000 beneficially 1.65% owned(3) Mr. Zhang Jingzhong Director 1,100,000 beneficially 1.38% owned(4) Mr. Fang Zhexing Supervisor 700,000 beneficially 0.88% owned(5) Notes: (1) These interests in the registered capital of Development Co are held by Ms. Huang Qiuxia as trustee for and on behalf of Mr. Geng Xiaoping pursuant to a trust agreement dated 26th May, 2003. (2) These interests in the registered capital of Development Co are held by Ms. Huang Qiuxia as trustee for and on behalf of Mr. Fang Yunti pursuant to a trust agreement dated 26th May, 2003. (3) These interests in the registered capital of Development Co are held by Ms. Huang Qiuxia as trustee for and on behalf of Mr. Jiang Wenyao pursuant to a trust agreement dated 17th April, 2006. (4) These interests in the registered capital of Development Co are held by Ms. Huang Qiuxia as trustee for and on behalf of Mr. Zhang Jingzhong pursuant to a trust agreement dated 14th September, 2005. (5) These interests in the registered capital of Development Co are held by Ms. Huang Qiuxia as trustee for and on behalf of Mr. Fang Zhexing pursuant to a trust agreement dated 26th May, 2003. Save as disclosed above, as at the Latest Practicable Date, none of the Directors, the Supervisors and the chief executive and their respective associates had any interests or short positions in the shares, underlying shares and debentures of the Company or any associated corporations (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 interests and short positions which they have taken on were 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 to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies. 3. Substantial shareholders' interests in securities As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of the SFO and so far as the Directors were aware, the following persons (not being a Director, Supervisor or chief executive of the Company) had an interest or short position 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 or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group together with the number of shares in which they were deemed to be interested: Name Capacity Number of Percentage shares held of share capital (domestic shares) Communications Investment Direct 2,432,500,000 83.61% Huajian Transportation Direct 476,760,000 16.39% Name Capacity Number of Percentage shares held of share capital (H shares) Aberdeen Asset Management Plc and its Interest held 206,964,000 14.43% associates by controlled (long corporations position) Mondrian Investment Partners Ltd. Investment 158,092,000 11.03% manager (long position) Credit Suisse Group Interest held 82,900,079 5.78% by controlled (long corporations position) J.P. Morgan Chase & Co. Interest held 81,040,817 5.65% by controlled (long corporations position) Save as disclosed above, as at the Latest Practicable Date, there was no other person (other than the interests of the Director, Supervisor or chief executive of the Company), who had an interest or short position in the shares and underlying shares and debentures of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group. 4. Interest of Directors in substantial shareholders Mr. Geng Xiaoping, an executive Director, is a director and general manager of Communications Investment. Ms. Zhang Luyun, a non-executive Director, is a director and a deputy general manager of Communications Investment. Ms. Zhang Yang, a non-executive Director, is an assistant general manager and manager of the securities management department of Huajian Transportation. Mr. Zhang Liping, an independent non-executive Director, is a managing director and chairman of China Investment Banking of Credit Suisse (Hong Kong) Limited, a member of Credit Suisse Group. 5. Service contracts As at the Latest Practicable Date, none of the Directors nor Supervisors has a service contract with any member of the Group which is not determinable within one year without payment of compensation (other than statutory compensation). 6. Interests in competing businesses As at the Latest Practicable Date, none of the Directors or Supervisors (and their respective associates) has any interest, and as far as each Director is aware none of his associates has any interests, in any business which competes or is likely to compete, either directly or indirectly, with the existing business of the Group. 7. Litigation So far as the Directors were aware, as at the Latest Practicable Date, no litigation or claims of material importance are pending or threatened against any member of the Group. 8. General (a) The Secretary of the Company is Mr. Zhang Jingzhong, a PRC qualified lawyer. (b) As at the date hereof, the Company has not appointed any qualified accountant as required under the Listing Rules. As announced on 20th January, 2006, the Company has obtained a conditional waiver in relation to compliance with Rule 3.24 of the Listing Rules. (c) The registered office of the Company is situated at 19/F, Zhejiang World Trade Centre, 122 Shuguang Road, Hangzhou, Zhejiang Province, the PRC. The head office of the Company is situated at 12/F, Block A, Dragon Century Plaza, 1 Hangda Road, Hangzhou, Zhejiang, the PRC. The branch share registrar of the Company in Hong Kong is Hong Kong Registrars Limited, 46th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong. (d) The English language text of this document shall prevail over the Chinese language text.

Companies

Zhejiang Expressway Co 'H' Shares (ZHEH)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today