09:35 CHINA FIRE<08201> - Announcement & Resumption of Trading (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. China Fire Safety Enterprise Group Holdings Limited (Incorporated in the Cayman Islands with limited liability) (Stock code: 8201) PROPOSED ISSUE OF SHARES TO PROPOSED STRATEGIC INVESTOR, OPTION AGREEMENT BETWEEN PROPOSED STRATEGIC INVESTOR AND A CONTROLLING SHAREHOLDER, APPLICATION FOR THE GRANT OF THE WHITEWASH WAIVER, CONNECTED TRANSACTION AND RESUMPTION OF TRADING The Board wishes to announce that on 1 February 2005 the Company has entered into the Subscription Agreement with UTFE, and Mr. Jiang has entered into the Option Agreement with UTFE. By virtue of the arrangements contemplated under the Option Agreement and the Subscription Agreement, UTFE, Mr. Jiang and Mr. Jiang!|s brother, Mr. Jiang Qing are parties acting in concert (within the meaning of the Takeovers Code). As at the date of this announcement, Mr. Jiang and Mr. Jiang Qing are interested in an aggregate of 989,100,000 Shares, representing approximately 48.96% of the issued share capital of the Company. Upon completion of the First Tranche Subscription, UTFE, Mr. Jiang and Mr. Jiang Qing will be interested in an aggregate of 1,345,100,000 Shares, representing approximately 56.61% of the issued share capital of the Company as enlarged by the issue of the new Shares under the First Tranche Subscription. Under Rule 26 of the Takeovers Code, in the absence of the Whitewash Waiver, either or both of UTFE and Mr. Jiang would be obliged to make a mandatory general offer to acquire all the Shares other than those already owned by itself or himself (as the case maybe) and parties acting in concert with it or him upon completion of the First Tranche Subscription. An application will be made by either or both of UTFE and Mr. Jiang to the Executive for the Whitewash Waiver. If the Whitewash Waiver is not obtained, the Subscription Agreement and the Option Agreement will lapse. By virtue of the entry into of the Option Agreement between Mr. Jiang and UTFE, UTFE is considered to be a deemed connected person of the Company under Rule 20.11(4)(a) of the GEM Listing Rules with respect to the Proposed Share Subscription. Therefore, the Proposed Transaction constitute a connected transaction of the Company. An independent Board committee will be established to advise the Independent Shareholders in relation to the Proposed Transaction. An independent financial adviser will be appointed to advise the independent Board committee and the Independent Shareholders. An announcement will be made as soon as the independent financial adviser is appointed. At the request of the Company, trading in Shares on GEM was suspended with effect from 9:35 a.m. on 17 January 2005, pending release of this announcement. Application has been made by the Company for the resumption of trading in the Shares with effect from 9:30 a.m. on 3 February 2005. A circular containing further details of the Proposed Transaction will be despatched to the shareholders of the Company as soon as practicable. The announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities in the Company. Shareholders and investors should note that subject to the First Tranche Conditions, the Second Tranche Conditions and the conditions to the Option Agreement being fulfilled or waived (as the case may be), completion of the Subscription Agreement and the Option Agreement may or may not proceed. Shareholders and investors are advised to exercise caution when dealing with the Shares.