11:09     TAI FOOK SEC<00665> - Announcement (6)                              

    As at the date of this announcement, Mr. Lo is the Deputy Chairman        
    of the Company, an executive Director and the beneficial owner            
    of Wellington, which holds 70,616,222 Shares, representing                
    approximately 12.1% of the total issued share capital of the              
    Company.                                                                  
                                                                              
    GENERAL                                                                   
                                                                              
    The Group is principally engaged in securities and futures                
    contracts broking and trading, the provision of margin and other          
    financing, the provision of corporate advisory, placing and               
    underwriting services, gold bullion contracts and leveraged               
    foreign exchange dealing and trading, the provision of nominee            
    and custodian services, fund management and the provision of              
    agency services for savings plans.                                        
                                                                              
    The Directors consider that the terms of each of the Master               
    Agreements and the transactions contemplated thereunder are made          
    on an arm's length basis, in the ordinary and usual course of             
    business of the Group and on normal commercial terms which are            
    no less favourable than terms available to or from Independent            
    Third Parties. The Directors are of the view that that the terms          
    of each of the Master Agreements and the transactions                     
    contemplated thereunder are fair and reasonable and in the                
    interest of the Group and the Shareholders as a whole.                    
                                                                              
    As referred to in the Company's interim report for the six months         
    ended 30 June 2004, the Group has established a business platform         
    which enables the Group to tap into any business opportunities            
    that may arise. The Directors consider that each of the Master            
    Agreements and the transactions contemplated thereunder will              
    be consistent with the business and commercial plans of the Group,        
    including the strengthening of the Group's investment banking             
    and securities broking businesses, and would bring strategic              
    and marketing benefits to the Group.                                      
                                                                              
    In view of the business nature of the Group, the Directors also           
    consider that the entering into of each of the Master Agreements          
    is in the interests of the Group and the Independent Shareholders         
    as a whole, given that:                                                   
                                                                              
    (i)     it would be advantageous for the Group to increase its            
    financial advisory fees and underwriting/sub-underwriting                 
    commission to be received from the Connected Clients;                     
                                                                              
    (ii)    the Master Agreements and the transactions contemplated           
    thereunder would bring strategic and marketing benefits to the            
    Group as explained above;                                                 
                                                                              
    (iii)   the favourable prospects of the economy and the stock             
    market in Hong Kong; and                                                  
                                                                              
    (iv)    a higher cap for each of the Master Agreements, which are         
    of revenue nature for the Group, would accommodate the Group's            
    business development, given that the Master Agreements and the            
    transactions contemplated thereunder are on normal commercial             
    terms, in the ordinary and usual course of business of the Group,         
    and fair and reasonable so far as the Group and the Independent           
    Shareholders are concerned and are in the interests of the Group          
    and the Independent Shareholders as a whole.                              
                                                                              
    The Independent Board Committee will be established to advise             
    the Independent Shareholders in relation to the terms of each             
    of the Master Agreements and the transactions contemplated                
    thereunder. An independent financial adviser will be appointed            
    to advise the Independent Board Committee and the Independent             
    Shareholders in relation to the terms of each of the Master               
    Agreements and the transactions contemplated thereunder.