10:08 PCCW<00008> - 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. PCCW Limited (Incorporated in Hong Kong with limited liability) (Stock Code: 0008) COMPLETION OF THE SUBSCRIPTION APPOINTMENT OF DIRECTORS CONNECTED TRANSACTION The Board of Directors of PCCW Limited is pleased to announce that China Netcom Corporation (BVI) Limited, an indirect wholly-owned subsidiary of China Network Communications Group Corporation, completed its subscription for 1,343,571,766 new shares in PCCW Limited on 1 April 2005. The Board of Directors of PCCW Limited is also pleased to announce that Mr Zhang Chunjiang, Dr Tian Suning and Dr Fan Xingcha have been appointed as Non-Executive Directors of PCCW Limited with effect from 1 April 2005. On completion of the Subscription, China Netcom Corporation (BVI) Limited became a substantial shareholder and connected person (as defined in the Listing Rules) of PCCW Limited. Accordingly, China Network Communications Group Corporation and its subsidiaries and associates (the `China Netcom Group') are connected persons of PCCW Limited and transactions between PCCW Limited or its subsidiaries (the `Group') and the China Netcom Group will constitute connected transactions for the Company under the Listing Rules. There is an existing business arrangement between the Group and the China Netcom Group, which will continue after completion of the Subscription. This connected transaction is exempt from the requirement for independent Shareholders' approval. INTRODUCTION This announcement is made further to the joint announcement dated 20 January 2005 made by PCCW Limited (the `Company') and China Network Communications Group Corporation (`China Netcom') and the circular dated 14 February 2005 (`Circular') issued and sent by the Company to Shareholders in relation to, among other things, the proposed increase of authorised share capital and the issue of new shares to a wholly-owned subsidiary of China Netcom. Unless otherwise stated, terms defined in the Circular have the same meaning in this announcement. COMPLETION OF THE SUBSCRIPTION The Board of Directors (the `Board') of the Company is pleased to announce that the Subscription was completed on 1 April 2005. China Netcom Corporation (BVI) Limited (`China Netcom (BVI)'), an indirect wholly-owned subsidiary of China Netcom, subscribed for 1,343,571,766 new Shares, representing approximately 20% of the Company's enlarged issued share capital. APPOINTMENT OF DIRECTORS The Board is also pleased to announce that, in accordance with the terms of the Subscription Agreement which entitles China Netcom to nominate three Directors, Mr Zhang Chunjiang (`Mr Zhang'), Dr Tian Suning (`Dr Tian') and Dr Fan Xingcha (`Dr Fan') have been appointed as Non-Executive Directors with effect from 1 April 2005. Mr Zhang, Dr Tian and Dr Fan have also been appointed to a number of committees of the Company with effect from 1 April 2005. Mr Zhang has been appointed as a member of the Nomination Committee and the Regulatory Compliance Committee of the Company. Dr Tian has been appointed a Deputy Chairman of the Board and a member of the Executive Committee and the Remuneration Committee of the Company. Dr Fan has been appointed as a member of the Finance and Management Committee of the Company. Mr Zhang Chunjiang, aged 46, is the Executive Chairman and an Executive Director of China Netcom Group Corporation (Hong Kong) Limited (`CNC HK'), a company listed on The Stock Exchange of Hong Kong Limited (the `Stock Exchange'). He has also served as President of China Netcom Group since May 2003. Prior to joining China Netcom Group, Mr Zhang served as Vice Minister of the Ministry of Information Industry of the PRC (`MII') and was one of the most senior regulatory officials in the PRC telecommunications industry from December 1999 to May 2003. From August 1993 to December 1999, Mr Zhang held a series of senior-level positions at the former Liaoning Provincial Posts and Telecommunications Bureau, the former Ministry of Posts and Telecommunications of the PRC (`MPT') and the MII, including serving as the Deputy Director of the former Liaoning Provincial Posts and Telecommunications Administration Bureau, Director of Mobile Communications Administration Bureau of the MPT and Deputy Director of Telecommunications Administration Bureau of the MII. Mr Zhang is a senior engineer and has extensive experience in telecommunications management, operations and technology. Mr Zhang