09:39     HK CHINESE LTD<00655> - Announcement (3)                            

    information and belief and having made all reasonable                     
    enquiries, are third parties independent of HKC and                       
    its connected persons) for acquiring the Property,                        
    being the whole of the development known as Newton                        
    Heights and located at 1 Newton Road, Singapore, for                      
    an aggregate consideration of S$43,620,000                                
    (equivalent to approximately HK$205,899,000),                             
    details of which have been disclosed in joint                             
    announcements made by Lippo, LCR and HKC on 25th                          
    February, 2005 and 18th May, 2005, and a circular                         
    issued by HKC on 21st March, 2005. In accordance with                     
    the terms and conditions of the Property Acquisition                      
    Agreement, HKCL Pte has paid to the Property Vendors'                     
    solicitors a deposit in the aggregate amount of                           
    S$2,181,000 (equivalent to approximately                                  
    HK$10,295,000). Completion of the Property                                
    Acquisition Agreement has yet to take place, pending                      
    the issuance of an outline planning permission by the                     
    government in Singapore, and it is expected that such                     
    completion will not take place prior to 17th June,                        
    2005. Since HKC is not acquiring the Property under                       
    the Sale and Purchase Agreement, it is considered that                    
    valuation of the Property is not required and                             
    therefore no valuation has been conducted by HKC on                       
    the Property.                                                             
                                                                              
    Apart from entering into the Property Acquisition                         
    Agreement and attending to the matters incidental                         
    thereto, HKCL Pte has not carried out any other                           
    business since its incorporation on 26th November,                        
    2003. As at 30th April, 2005, the unaudited net asset                     
    value and total assets of HKCL Pte and the                                
    Shareholder's Loan amounted to S$995,451 (equivalent                      
    to approximately HK$4,699,000), S$2,400,000                               
    (equivalent to approximately HK$11,329,000) and                           
    S$1,404,549.11 (equivalent to approximately                               
    HK$6,630,000), respectively. The total assets of HKCL                     
    Pte comprise the deposit paid by HKCL Pte under the                       
    Property Acquisition Agreement in the amount of                           
    approximately HK$10,295,000 and other assets (being                       
    prepayments and other receivables incidental to the                       
    acquisition of the Property) of HK$1,034,000. For the                     
    period from 26th November, 2003 (being the date of                        
    incorporation of HKCL Pte) to 31st December, 2004,                        
    HKCL Pte recorded an audited loss (before tax and                         
    after tax) of S$3,129 (equivalent to approximately                        
    HK$15,000).                                                               
                                                                              
    LISTING RULES IMPLICATIONS                                                
    Since HKCL Investments is a wholly-owned subsidiary                       
    of HKC which in turn is beneficially owned as to                          
    approximately 72.26 per cent. by LCR, LCR is a                            
    substantial shareholder and a connected person of HKC.                    
    Also, since Auric Property is a wholly-owned                              
    subsidiary of Auric Pacific which in turn is an                           
    indirect subsidiary of LCR, each of Auric Property                        
    and Auric Pacific is an associate of LCR. Accordingly,                    
    Auric Property is a connected person of HKC, and                          
    therefore the entering into of the Sale and Purchase                      
    Agreement constitutes a connected transaction for HKC                     
    under Rule 14A.13 of the Listing Rules. Since the                         
    relevant percentage ratios for the Purchase Price                         
    exceed 0.1 per cent. but are less than 2.5 per cent.,                     
    HKC is exempt from the independent shareholders'                          
    approval requirements and only subject to the                             
    reporting and announcement requirements for                               
    connected transactions under Rule 14A.32 of the                           
    Listing Rules.                                                            
                                                                              
    REASONS FOR THE TRANSFER OF HKCL PTE                                      
    HKC intends to streamline the management and                              
    administration of its property investments by                             
    gradually reducing its property development projects                      
    on hand. In view of this, HKC considers