09:20 CHINA UNITED<00273>-Announcement & Resumption of Trading (6) investment holding, investment in trading securities and provision of brokerage and financial services. Alpha Aim is a wholly-owned subsidiary of the Company that was established specifically for the investment in Found Macau. The relationship between Mr. Ong and Mr. Lao was not disclosed in the announcement of the Company dated 9th December, 2004 and circular dated 20th December 2004 because the Board was not aware of it at the relevant time and was made aware of this information shortly after the issue of the announcement of 9th December, 2004 and the circular dated 20th December, 2004. REASONS FOR THE TRANSACTION The acquisition price of US$30 for the 30 FM Shares is based on the par value of US$1 per FM Share. Found Macau's intention is to raise HK$500 million in the form of shareholders loans. The provision of the New Found Macau Loan of HK$150 million by Alpha Aim is based on Alpha Aim's shareholding interest of 30% in Found Macau upon approval of the FM Transactions. The Company is of the view that terms of the New Found Macau Transactions are a good opportunity to increase its investment in Found Macau, which now is close (subject to contract) to agreeing formally the acquisition of previously identified investment targets and new investment targets. The reason the Company entered into the Termination Deed and the Disposal and the FM Transactions is due to Found Macau's recent expedited progress in identifying and negotiating on investment targets which requires substantial investment. Hence, the original Found Macau Loan of HK$50 million is not sufficient for the purpose of funding the identified investment targets of Found Macau. The Company does not have any current intention to make further investments in Found Macau. The Directors are of the view that the term of the FM Transactions are fair and reasonable and in the interests of shareholders as a whole. Mr. Ong abstained from voting at the board meeting on the FM Transactions. The independent non-executive directors (excluding Mr. Ong who has a material interest in the FM Transactions) will form a view on the FM Transactions once they have reviewed the opinion of the independent financial adviser. IMPLICATIONS UNDER THE LISTING RULES The Group will through its wholly-owned subsidiary, Alpha Aim, hold a 30% equity stake in Found Macau after completion of the New FM Acquisition but Found Macau will not become a subsidiary of the Company as a result of the New FM Acquisition. Found Macau has not commenced business yet and as at the date of this announcement not involved in the operation of any casino and entertainment business. No licence is required in Hong Kong for the operation of the casino and entertainment business in Macau if the casino and entertainment operations are conducted exclusively offshore. The Company will use its best endeavours (insofar as it is able in its capacity as a shareholder in Found Macau to do so) to ensure that for as long as the Company has a direct or indirect interest in the Found Macau, the casino and entertainment business carried out by Found Macau will comply with the applicable laws in the areas where such activities operate and will not contravene the Gambling Ordinance of Hong Kong insofar as it is applicable. Shareholders should be aware that under the Guidelines issued by the Stock Exchange in relation to `Gambling Activities undertaken by listed applicants and/or listed issuers' dated 11th March, 2003, should the Group be engaged in gambling activities and operation of such gambling activities (i) fail to comply with the applicable laws in the areas with such activities operate and/or (ii) contravene the Gambling Ordinance such that the Company or its business may be considered unsuitable for listing under Rule 8.04 of the Main Board Listing Rules, the Stock Exchange may direct the Company to take remedial action, and/or may suspend the dealings in, or may cancel the listing of, its securities. Mr. Ong, Mr. Lao, Lourenco Cheong and their respective Associates do not hold any Shares as at the date of this announcement. Unity beneficially holds 19,648,000 shares, representing approximately 1.43% of the issued share capital of the Company as at the date of this announcement. Filipe Lau holds 2,000,000 shares, representing approximately 0.15% of the issued share capital of the Company as at the date of this announcement. Mr. Lao is the stepfather of Mr. Ong and hence an `associate' of a director of the Company treated as a connected person of the Company under Rule 14A.11(4)(b) of the Listing Rules. The FM Transactions constitute major and connected transactions under Rule 14.06 and Rule 14A.13 of the Listing Rules and are subject to approval of independent shareholders at the EGM. Unity, Filipe Lau and their respective Associates who have a material interest in the Transactions are required to abstain from voting at the EGM on the Transactions. Save and except for Unity, Filipe Lau and their respective Associates, there is no shareholder with a material interest in the FM Transactions which is required to abstain from voting. Radford Developments Limited (see note 2 of the section