10:13     CAPITAL STRAT<00497> - Announcement (1)                             

    The Stock Exchange of Hong Kong Limited takes no responsibility for       
    the contents of this announcement, 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 announcement.                   
                                                                              
                                                                              
            Earnest Equity Limited        Capital Strategic Investment        
    Limited                                                                   
            (Incorporated in the British Virgin Islands with limited          
    liability)        (incorporated in Bermuda with limited liability)        
                    (Stock code: 497)                                         
                                                                              
    CLOSE OF                                                                  
    MANDATORY CONDITIONAL CASH OFFERS BY                                      
    KINGSTON SECURITIES LIMITED                                               
    ON BEHALF OF EARNEST EQUITY LIMITED                                       
    TO ACQUIRE ALL THE ISSUED SHARES IN THE CAPITAL OF                        
    AND ALL OUTSTANDING OPTIONS OF                                            
    CAPITAL STRATEGIC INVESTMENT LIMITED                                      
    (OTHER THAN THOSE ALREADY OWNED BY                                        
    EARNEST EQUITY LIMITED AND PARTIES ACTING IN CONCERT WITH IT)             
                                                                              
    Financial adviser to the Offeror                                          
                                                                              
    Independent Financial Adviser to the Independent Board Committee,         
    Independent Shareholders and Holders of the Options of Capital            
    Strategic Investment Limited                                              
                                                                              
    Lapse of the Offers                                                       
                                                                              
    Upon the close of the Offers made by Kingston Securities on behalf of     
    the Offeror at 4:00 p.m. on Friday, 21 January 2005, being the latest     
    time for acceptance of the Offers, the Offeror had received eight         
    valid acceptance in respect of 20,000 Shares, representing                
    approximately (i) 0.00522% of the total 383,447,950 issued Shares; and    
    (ii) 0.00883% of the 226,612,700 Shares subject to the Offers. There      
    was nil acceptance regarding the Option Offer by the holders of the       
    Options.                                                                  
                                                                              
    Immediately before the commencement of the Offers, the Offeror and        
    parties acting in concert with it together held 156,835,250 Shares,       
    representing approximately 40.90% of the then issued share capital of     
    the Company. On 12 January 2005, the Offeror purchased a total of         
    6,100,000 Shares on the stock market, representing approximately 1.59%    
    of the total issued share capital of the Company (the "Purchase") at      
    the Revised Share Offer Price of HK$0.55. Following the Purchase, the     
    Offeror and parties acting in concert are interested in approximately     
    42.49% in aggregate of the existing issued share capital of the           
    Company. Taking into account the acceptance in respect of 20,000          
    Shares under the Offers, the Offeror and parties acting in concert        
    with it would have been interested in 162,955,250 Shares, representing    
    approximately 42.50% of the existing issued share capital of the          
    Company. Save for the Purchase, the Offeror and parties acting in         
    concert with it have not dealt in the Shares during the offer opening     
    period in relation to of the Offers. Since the Offers did not result      
    in the Offeror and parties acting in concert with it having more than     
    50% of the voting rights of the Company, the Offers did not become        
    unconditional and the Offers lapsed at 4:00 p.m. on 21 January 2005.      
                                                                              
    References are made to the press announcements (the "Joint                
    Announcements") jointly issued by the Offeror and the Company dated 15    
    November, 3 December, 21 December and and 22 December 2004 and the        
    composite offer document dated 31 December 2004 regarding, among other    
    things, the Offers made by the Offeror for all the issued Shares and      
    all the outstanding Options other than those already owned by the         
    Offeror and parties acting in concert with it. Unless otherwise           
    defined, terms used herein shall have the same meanings as those          
    defined in the Joint Announcements.                                       
                                                                              
    Lapse of the Offers                                                       
                                                                              
    Upon the close of the Offers made by Kingston Securities on behalf of     
    the Offeror at 4:00 p.m. on Friday, 21 January 2005, being the latest     
    time for acceptance of the Offers, the Offeror had received eight         
    valid acceptance in respect of 20,000 Shares, representing                
    approximately (i) 0.00522% of the total 383,447,950 issued Shares; and    
    (ii) 0.00883% of the 226,612,700 Shares subject to the Offers. There      
    was nil acceptance regarding the Option Offer by the holders of the       
    Options.                                                                  
                                                                              
    Immediately before the commencement of the Offers, the Offeror and        
    parties acting in concert with it together held 156,835,250 Shares,       
    representing approximately 40.90% of the then issued share capital of     
    the Company. On 12 January 2005, the Offeror purchased a total of         
    6,100,000 Shares on the stock market at the Revised Share Offer Price     
    of HK$0.55, representing approximately 1.59% of the total issued share