09:41     CAPITAL STRAT<00497>-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.                   
                                                                              
    CAPITAL STRATEGIC INVESTMENT LIMITED                                      
    (Incorporated in Bermuda with limited liability)                          
    (STOCK CODE: 497)                                                         
                                                                              
    PROPOSED ISSUE OF 75,000,000 NEW SHARES UNDER THE SUBSCRIPTION,           
                                                                              
    EXCEPTIONAL SHARE PRICE and volume MOVEMENT                               
                                                                              
    AND                                                                       
                                                                              
    RESUMPTION OF TRADING                                                     
                                                                              
    Financial adviser                                                         
                                                                              
    Takeovers Code implication                                                
                                                                              
    Following the issue of the Company's announcement dated 8 March 2005      
    and through subsequent discussions with the Executive, the Company has    
    been informed by the Executive that he is of the view that one or more    
    of the Strategic Investors is or are acting in concert with the           
    Earnest Group Party in relation to the control of the Company.            
                                                                              
    In the interest of facilitating completion of the Subscription in a       
    timely manner (before the long-stop date of 20 May 2005) and for the      
    benefit of the Company and whilst expressing no view on the               
    aforementioned view of the Executive, the Strategic Investors have, at    
    the request of the Company, agreed to seek a whitewash waiver pursuant    
    to Note 1 on dispensations from Rule 26 of the Takeovers Code to          
    exempt them from any obligations to make a general offer of the Shares    
    as a result of completion of the Subscription.                            
                                                                              
    The Waiver, if granted by the Executive, will be subject to approval      
    of the Independent Shareholders. The Earnest Group Party will abstain     
    from voting on all the resolutions in respect of the Subscription and     
    the Waiver.                                                               
                                                                              
    Exceptional share price and volume movement                               
                                                                              
    The Company is not aware of any reasons contributing to the increase      
    in the price and trading volume of the Shares on 9 March 2005 save for    
    the information contained in the Announcement.                            
                                                                              
    Suspension and resumption of trading in the Shares                        
                                                                              
    At the request of the Company, trading in the Shares has been             
    suspended with effect from 9:30 a.m. on 10 March 2005 pending the         
    issue 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 15 March 2005.                                                         
                                                                              
    1.        INTRODUCTION                                                    
                                                                              
    This announcement is made in relation to the Announcement. Terms used     
    in this announcement shall have the same meanings as those defined in     
    the Announcement unless otherwise requires.                               
                                                                              
    2.        TAKEOVERS CODE IMPLICATION                                      
                                                                              
    Further to the Announcement and through subsequent discussions with       
    the Executive, the Company has been informed by the Executive that he     
    is of the view that one or more of the Strategic Investors are acting     
    in concert with Earnest Group Party in relation to the control of the     
    Company.                                                                  
                                                                              
    The Earnest Group Party currently owns 170,067,250 Shares which           
    represents approximately 44.26% of the existing issued share capital      
    of the Company.                                                           
                                                                              
    If one or more of the Strategic Investors is/are considered to be         
    acting in concert with the Earnest Group Party, completion of the         
    Subscription would, under Rule 26 of the Takeovers Code, give rise to     
    the obligation for the Earnest Group Party, to make a general offer       
    for all of the Shares other than those already owned by the Earnest       
    Group Party or agreed to be subscribed by the Strategic Investors         
    under the Subscription.                                                   
                                                                              
    Earnest Equity, Mr. Chung and each of the Strategic Investors             
    acknowledge the view and position of the Executive and express no view    
    thereon.                                                                  
                                                                              
    In the interest of facilitating completion of the Subscription in a