09:45     STONE HOLDINGS<00409> - Announcement (8)                            

    Beijing MTY was established as a limited liability                        
    company under the laws of the PRC on 26 May 2003.                         
    Beijing MTY currently is owned as to 60% by Beijing                       
    Aoxin, as to 30% by Beijing Centek and as to 10% by                       
    Beijing Liyixun. Beijing Aoxin, Beijing Centek and                        
    Beijing Liyixun, together with their respective                           
    ultimate beneficial owners are third parties                              
    independent of the Group and connected persons of the                     
    Group.                                                                    
                                                                              
    The Reorganisation                                                        
    As one of the conditions precedent, the MTY Group will                    
    undergo the Reorganisation, major terms of which are                      
    as follows:                                                               
                                                                              
    1.      the completion of the transfer of the interests                   
    in Beijing MTY from its existing shareholders to                          
    Individual A, Individual B and Individual C;                              
                                                                              
    2.      the transfer of certain assets such as intellectual               
    properties including but not limited patents and                          
    trademarks in relation to the existing business of                        
    Beijing MTY and office equipment from Beijing MTY to                      
    MTY WFOE;                                                                 
                                                                              
    3.      the entering into of the Contractual Arrangements,                
    details of which are set out in the section headed                        
    "The Contractual Arrangements" below;                                     
                                                                              
    4.      the entering into of the new employment contracts                 
    with all of the existing employees of Beijing MTY                         
    other than certain employees which will be released                       
    from Beijing MTY;                                                         
                                                                              
    5.      the signing of all the necessary legal documents                  
    to effect the Reorganisation; and                                         
                                                                              
    6.      having obtained all the approvals for the                         
    Reorganisation from the relevant regulatory bodies                        
    in the PRC.                                                               
                                                                              
    The Contractual Arrangements                                              
    As part of the Reorganisation, MTY WFOE, Beijing MTY,                     
    Individual A, Individual B and Individual C will enter                    
    into the following Contractual Arrangements:                              
                                                                              
    1.      the Loan Agreements;                                              
                                                                              
    2.      the Share Pledge Agreement;                                       
                                                                              
    3.      the Option Agreement;                                             
                                                                              
    4.      the Undertakings;                                                 
                                                                              
    5.      the Service Agreement;                                            
                                                                              
    6.      the Asset Transfer Agreement; and                                 
                                                                              
    7.      the Licensing Agreement.                                          
                                                                              
    The rationale for entering into the Contractual                           
    Arrangements is for MTY WFOE to own certain valuable                      
    assets of intellectual properties including but not                       
    limited to patents and trademarks in relation to the                      
    existing business of Beijing MTY and office equipment                     
    for future development of the business of MTY WFOE                        
    and to share the economic benefits of Beijing MTY.                        
    Under the existing PRC laws and regulations, foreign                      
    entities such as MTY WFOE is not allowed to be engaged                    
    directly in the wireless telecommunication VAS                            
    business engaged by Beijing MTY in the PRC. All the                       
    agreements and undertakings under the Contractual                         
    Arrangements are enforceable