10:09 PCCW<00008> - Announcement (2) graduated from the Beijing University of Posts and Telecommunications in 1982 with a bachelor's degree in telecommunications. Dr Tian Suning, aged 41, is an Executive Director and the Chief Executive Officer of CNC HK. He has also served as Vice President of China Netcom since April 2002. Since 1999, he has served as Chief Executive Officer of China Netcom (Holdings) Company Limited and CNC HK. Since March 2003, he has also served as the Chief Executive Officer of Asia Netcom Corporation Limited. Prior to joining China Netcom (Holdings) Company Limited, Dr Tian was the co-founder and Chief Executive Officer of AsiaInfo Holdings Inc., a NASDAQ-listed company providing software and networking solutions in China. Dr Tian has extensive experience and knowledge in the telecommunications industry and international financing and acquisitions. Dr Tian received a Ph.D. in natural resources management from Texas Tech University in 1992, an M.S. degree in ecology from the Graduate School of the Chinese Academy of Sciences in 1988, and a B.S. degree in environmental biology from Liaoning University in 1985. Dr Tian is also a director of AsiaInfo Holdings Inc., a NASDAQ-listed company, Trend Micro Inc., a company listed in the Tokyo Stock Exchange and an independent director of TCL Corporation, a company listed on the Shenzhen Stock Exchange. Dr Fan Xingcha, aged 39, is the Chief Financial Officer of CNC HK. Since April 2000, Dr Fan has served as Vice President of Strategy and Business Development and Executive Vice President of Operations of China Netcom (Holdings) Company Limited, and Chief Financial Officer of CNC HK. Dr Fan has also served as Chief Financial Officer of Asia Netcom Corporation Limited since March 2003. Prior to joining China Netcom (Holdings) Company Limited, Dr Fan was a senior consultant of McKinsey & Company in its Shanghai office. Dr Fan received a Ph.D. degree in computer science from Flinders University in 1996 and a master's degree in electrical engineering from Southeast University in China in 1987. Other than the positions referred to above held within the China Netcom group of companies, Mr Zhang, Dr Tian and Dr Fan do not have any relationship with any other Directors, senior management or substantial or controlling shareholders of the Company. They do not have any interests in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. There is no service contract entered into between Mr Zhang, Dr Tian or Dr Fan and the Company. Pursuant to the Company's Articles of Association, they are subject to retirement by rotation and will be eligible for re-election at the annual general meetings of the Company. Each of Mr Zhang, Dr Tian and Dr Fan will receive director's fee of HK$200,000 per annum which is subject to review by the Board from time to time pursuant to the power given to it under the Articles of Association of the Company. Save as disclosed above, there are no other matters related to the appointment of Directors of the Company that need to be brought to the attention of the shareholders of the Company. CONNECTED TRANSACTION On completion of the Subscription, China Netcom (BVI), an indirectly wholly-owned subsidiary of China Netcom, became a substantial shareholder and connected person of the Company. Accordingly, members of the China Netcom Group are connected persons (as defined in the Listing Rules) of the Company and transactions between the Group and the China Netcom Group will constitute connected transactions for the Company under the Listing Rules. The following business arrangement between the Group and the China Netcom Group will continue after completion of the Subscription. On 12 September 1995, PCCW-HKT Limited (then known as Hong Kong Telecommunications Limited) (`HKTL') entered into a Memorandum of Agreement on the financial arrangement for the purchase of equipment (`Memorandum') with the Ministry of Posts & Telecommunications (`MPT') of the People's Republic of China (`PRC') in support of the Beijing-Jiujiang-Guangzhou Optical Fibre Cable System Project (the `Project'). Under the Memorandum, HKTL agreed to provide financing of up to US$70 million to MPT (the `Loan'). The Loan is repayable in 20 equal half-yearly instalments over 10 years, with a two-year grace period and a fixed interest rate of 4% per annum payable on the amount of the outstanding balance. The Loan is to be used to settle the equipment purchases for the Project. The first principal repayment date was 31 May 1998 and thereafter principal and interest is required to be paid once every 6 months. On 31 August 1998, a supplemental agreement was entered between MPT and HKTL (the `Supplemental Agreement'), under which the total loan amount of US$70 million was divided into two phases. For phase 1, the amount of US$45,445,914 had been fully drawn and the remaining balance of US$24,554,086 would be treated as the phase 2 Loan. On 21 June 1999, MPT, HKTL, the Ministry of Information Industry of the People's Republic of China (`MII'), and the Directorate General of Telecommunications P&T, China (the `DGT') entered into a novation agreement (the `Novation') to novate all the rights and obligations under the Memorandum and the Supplemental Agreement to DGT. Due to the reform of the institutions under the State Council of the PRC on