XN000022-1975-08-18 — Page 2

MONDAY, AUGUST 18, 1977.

TAKEOVER CODE APPROVED

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THE SECURITIES COMMISSION HAS APPROVED A CODE ON TAKEOVERS AND MERGERS FOR HONG KONG WHICH HAS BEEN DRAWN UP AFTER DISCUSSIONS WITH UNDERWRITERS, MERCHANT BANKS, THE HONG KONG FEDERATION OF STOCK EXCHANGES AND OTHERS.

THE CODE, TO PROVIDE GUIDELINES FOR COMPANIES AND THE IR ADVISERS WHO CONTEMPLATE OR BECOME INVOLVED IN TAKEOVERS AND MERGERS, WAS FINALLY AGREED AT A MEETING HELD LAST THURSDAY (AUGUST 14).

ANNOUNCING APPROVAL OF THE CODE TODAY A SPOKESMAN FOR THE SECURITIES COMMISSION SAID THAT IT WILL BE ADMINISTERED BY A COMMITTEE CONSISTING OF ONE OFFICIAL AND TWO UNOFFICIAL MEMBERS OF THE SECURITIES COMMISSION, ONE REPRESENTATIVE FROM THE HONG KONG FEDERATION OF STOCK EXCHANGES AND TWO OTHERS REPRESENTING FINANCIAL INSTITUTIONS.

THE COMMITTEE WILL APPOINT A SECRETARY WHO WILL NORMALLY BE A MEMBER OF THE STAFF OF THE OFFICE OF THE COMMISSIONER FOR SECURITIES.

COMMITTEE MEMBERS WILL HOLD OFFICE FOR ONE YEAR, BUT MAY BE RE-ELECTED. AS A BODY IT WILL HAVE THE POWER TO CO-OPT MEMBERS TO ASSIST IN SPECIFIC CASES.

THE CHAIRMAN OF THE COMMITTEE FOR THE FIRST YEAR ENDING AUGUST 31, 1976, IS MR. JAMES SELWYN, THE COMMISSIONER FOR SECURITIES. THE MEMBERS ARE: MR. J.L. BOYER AND MR. C.H. WONG, BOTH MEMBERS OF THE SECURITIES COMMISSION MR. RONALD LI, CHAIRMAN OF THE HONG KONG FEDERATION OF STOCK EXCHANGES- A REPRESENTATIVE OF JARDINE FLEMING AND CO. LTD AND A REPRESENTATIVE OF SCHRODERS AND CHARTERED LTD.

IN CASE ONE OF THE LAST TWO COMPANIES IS INVOLVED IN A TAKEOVER BID WHICH IS TO BE DISCUSSED BY THE COMMITTEE, EACH OF THEIR REPRESENTATIVES WILL HAVE AN ALTERNATE FROM ANOTHER FINANCE HOUSE OR INSTITUTION, ONE OF WHOM WOULD BE ASKED TO ATTEND THE MEETING.

THE SPOKESMAN SAID THAT GENERALLY SPEAKING A TAKEOVER OCCURS WHEN A COMPANY ACQUIRES THE CONTROL OF ANOTHER COMPANY BY MEANS OF A SPECIFIC OFFER ADDRESSED TO THE GENERAL BODY OF SHAREHOLDERS OF THAT COMPANY. IF A COMPANY OR PERSON GAINS CONTROL BY BUYING SHARES ON A STOCK EXCHANGE IN THE ORDINARY COURSE OF BUSINESS IT IS NOT CONSIDERED TO BE A TAKEOVER IN THIS SENSE, AND MOST OF THE REGULATIONS IN THE CODE WOULD NOT APPLY.

/+A_MERGEN