10:37     GEELY AUTO<00175>-Announcement & Resumption of Trading (7)          

    than 25% of the Shares are held by the public or if the Stock Exchange    
    believes that:                                                            
                                                                              
    * a false market exists or may exist in the trading of the Shares; or     
                                                                              
    * there are too few Shares in public hands to maintain an orderly         
    market,                                                                   
                                                                              
    then the Stock Exchange will consider exercising its discretion to        
    suspend trading in the Shares until a sufficient level of public float    
    is attained.                                                              
                                                                              
    The Stock Exchange will closely monitor all future acquisitions or        
    disposals of assets by the Company. Pursuant to the Listing Rules, the    
    Stock Exchange has the discretion to require the Company to issue an      
    announcement and a circular to the Shareholders irrespective of the size  
    of any proposed transactions, particularly when such proposed             
    transactions represent a departure from the principal activities of the   
    Company. The Stock Exchange also has the power, pursuant to the Listing   
    Rules, to aggregate a series of acquisitions or disposals of the Company  
    and any such transactions may result in the Company being treated as if   
    it were a new listing applicant and subject to the requirements for new   
    listing applicants set out in the Listing Rules.                          
                                                                              
    DESPATCH OF OFFER DOCUMENT                                                
                                                                              
    The Company will appoint an independent financial adviser to advise the   
    independent board committee of the Company to be set up on the fairness   
    and reasonableness of the terms of the Offer. The composite Offer         
    Document containing details of the Offer, the acceptance and transfer     
    forms and, among other things, the advice from the independent board      
    committee of the Company and the advice from the independent financial    
    adviser is expected to be despatched to the Shareholders within 21 days   
    from the publication of this announcement. Further announcement(s) will   
    be made by the Company regarding the Offer as and when appropriate.       
                                                                              
    CONTINUING CONNECTED TRANSACTIONS                                         
                                                                              
    Background                                                                
                                                                              
    Fulin Guorun, a 51% owned subsidiary of the Company, has been in its      
    usual and ordinary course of business, selling automobile parts and       
    components on normal commercial terms to an associated company of the     
    Company, Zhejiang Geely JV since December 2003. Fulin Guorun is           
    principally engaged in the manufacturing and trading of automobile parts  
    and components in the PRC.                                                
                                                                              
    As at the date of this announcement and prior to Completion, Mr. Li is    
    not a connected person of the Company, as Mr. Li does not hold more than  
    50% of the issued share capital of Proper Glory nor is he a director of   
    Proper Glory or of the Company. Hence, prior to Completion, any           
    transactions between the Group and Mr. Li or his associates will not      
    constitute connected transactions under the Listing Rules.                
                                                                              
    Upon Completion, Mr. Li will become the ultimate controlling              
    Shareholder, and thus a connected person of the Company. Mr Li is also    
    the ultimate controlling shareholder of Zhejiang Geely JV. The            
    transactions between Fulin Guorun and Zhejiang Geely JV constitute        
    continuing connected transactions for the Company. The Supply Agreement   
    was entered into between Fulin Guorun and Zhejiang Geely JV to govern     
    the terms of the Continuing Connected Transactions for the period from    
    the date of the Supply Agreement to 31 December 2007. As the amount of    
    the Continuing Connected Transactions on annual basis is expected to      
    exceed the 2.5% threshold stated in Rule 14A.34 of the Listing Rules,     
    the Continuing Connected Transactions will be subject to the              
    requirements of reporting, announcement and approval by the Independent   
    Shareholders at the EGM as set out in Chapter 14A of the Listing Rules.   
                                                                              
    As the Supply Agreement is independent of the Offer, it is not            
    conditional upon the closing of the Offer. Similarly, the Offer are not   
    conditional upon the approval of the Supply Agreement by the Independent  
    Shareholders at the EGM.                                                  
                                                                              
    The Supply Agreement dated 6 May 2005                                     
                                                                              
    Parties:        (i)        Fulin Guorun, a 51% owned subsidiary of the    
    Company;                                                                  
                                                                              
            (ii)        Zhejiang Geely JV, whose principal business is        
    engaged in the design and manufacture of automobiles in the PRC.          
                                                                              
    Nature of transaction                                                     
                                                                              
    Fulin Guorun will, in its usual and ordinary course of business, enter    
    into transactions with Zhejiang Geely JV for the sale of automobile       
    parts and components to these companies for their own consumption in the