09:42 CAPITAL STRAT<00497>-Announcement & Resumption of Trading(2) 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 the Waiver. The Strategic Investors and the Earnest Group Party also consider it desirable to make an application in respect of the Waiver and to ascertain their respective positions under the Takeovers Code in the event that the Earnest Group Party and/or any of the Strategic Investors may wish to increase their respective shareholding in the Company in the future. An application in respect of the Waiver will be made to the Executive, and if granted, will be subject to the approval of the Independent Shareholders (by poll) at the special general meeting of the Company to be convened to consider, among other things, the Waiver. In this regard, Earnest Group Party has agreed to abstain from voting on all the resolutions in respect of the Subscription and the Waiver. Each of the Strategic Investors and their respective relevant concert parties confirmed that they have not owned or dealt in the Shares during the past six months prior to the date of the Announcement. As at 21 January 2005, the date when the Offer lapsed, Earnest Group Party held 162,935,250 Shares, representing approximately 42.40% of the existing issued share capital of the Company. Earnest Equity has after the lapse of the Offer to 4 February 2005 acquired 7,132,000 Shares, representing approximately 1.86% of the existing issued share capital of the Company, from the market. Earnest Group Party confirmed that they have not dealt in any Shares after 4 February 2005 and the aforementioned acquisitions took place prior to the Company's contemplation of the Subscription and the Placing. As stated in the Announcement, each of the Strategic Investors is an independent third party to the Company, is not, a connected person of the Company and is not connected to the directors, chief executive, substantial shareholder of the Company, or its subsidiaries and their respective associates, or their respective connected persons, and the Subscription Agreements are not inter-conditional. An independent board committee comprising the independent non- executive Directors will be established to consider and to advise the Independent Shareholders as to whether the terms of the Subscription and the Waiver are fair and reasonable so far as the Independent Shareholders are concerned, and that the Subscription and the Waiver are in the interests of the Company and the Independent Shareholders as a whole. AMS Corporate Finance Limited, an independent financial adviser, has been appointed to advise the independent board committee of the Company and the Independent Shareholders with respect to the Subscription and the Waiver. If the Waiver is not granted, the Subscription will not proceed. Save as to the above, all the other terms of the Subscription and the Placing remain unchanged. Shareholders and investors are reminded that in addition to the outcome of the Waiver application, the Subscription and the Placing are subject to other conditions precedent as set out in the Announcement, including the force majeure provisions in the Subscription Agreements and the Placing Agreement. If any of these conditions precedent is not fulfilled or if the force majeure provisions under any of the Subscription Agreements or the Placing Agreement are invoked, the transaction contemplated under the relevant agreement with regard to a specific Strategic Investor or the Agent will not proceed. 3. 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. 4. 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. 5. DEFINITIONS