09:52     SW KINGSWAY<00188> - Announcement (4)                               

    REASONS FOR AND BENEFITS OF THE ACQUISITION                               
                                                                              
    One of the principal business activities of the Group is                  
    proprietary investment. Given that the property market in                 
    Beijing, PRC is on the upward trend, the Directors consider that          
    the Acquisition not only meet the investment objectives of the            
    Group but also represents an opportunity for the Group to expand          
    its assets base and diversify its investment portfolio.                   
    Additionally, the Property could be used by the Group for the             
    creation of a real estate investment fund. The Directors are              
    of the view that the terms of the Acquisition are fair and                
    reasonable. The Directors consider that the Acquisition is in             
    the interest of the Company and the shareholders of the Company           
    as a whole.                                                               
                                                                              
    GENERAL                                                                   
                                                                              
    After considering all relevant size test, the Acquisition                 
    constitutes a major transaction of the Company under Chapter              
    14 of the Listing Rules and is therefore subject to the                   
    shareholders' approval in accordance with Chapter 14 of the               
    Listing Rules as the value of the Property of RMB236,182,869              
    (equivalent to approximately HK$222,898,140 (based upon the               
    exchange rate at 1.0596 as at 13 April 2005)) amounts to                  
    approximately 30% of the total assets of the Company of                   
    787,073,315 as at 31 December 2004 (based on the information              
    as disclosed in the latest published interim report of the                
    Company for the six months ended 31 December 2004). Pursuant              
    to Rule 14.44 of the Listing Rules, shareholders' approval for            
    a major transaction shall be given by a majority vote at a general        
    meeting of the shareholders of the listed issuer unless all the           
    following conditions are met, in which case written                       
    shareholders' approval may be accepted in lieu of holding a               
    general meeting:                                                          
                                                                              
    (1)     no shareholder of the listed issuer is required to abstain        
    from voting if the listed issuer were to convene a general meeting        
    for the approval of the transaction; and                                  
                                                                              
    (2)     the written shareholders' approval has been obtained from         
    a shareholder or a closely allied group of shareholders who               
    together hold more than 50% in nominal value of the securities            
    of the listed issuer giving the right to attend and vote at that          
    general meeting to approve the transaction.                               
                                                                              
    As no shareholder of the Company has a material interest in the           
    Acquisition, no shareholder of the Company is required to abstain         
    from voting if the Company were to convene an extraordinary               
    general meeting for the approval of the Acquisition. In addition,         
    a written approval on the Acquisition has been obtained by the            
    Company from Kingsway International Holdings Limited, the                 
    controlling shareholder of the Company holding 2,410,571,327              
    shares in the issued capital of the Company which represent               
    approximately 74.2% of the nominal value of the shares of the             
    Company as at the date of this announcement and which give the            
    right to such shareholder to attend and vote at the general               
    meeting for the approval of the Acquisition. Accordingly, all             
    the conditions as set out in Rule 14.44 of the Listing Rules              
    are met by the Company and, therefore, the Company shall not              
    be required to hold an extraordinary general meeting for the              
    shareholders' approval of the Acquisition.                                
                                                                              
    A circular containing, among others, further details of the               
    Acquisition together with the valuation report of the Property            
    prepared by the Valuer will be dispatched to the shareholders             
    of the Company as soon as practicable.                                    
                                                                              
    DIRECTORS