XN000022-1989-08-01 — Page 4

TUESDAY, AUGUST 1, 1989

3

FSI TO SELL HANG LUNG BANK

THE FOLLOWING IS A JOINT

SECRETARY

INCORPORATED

HOLDINGS LIMITED:

AND

THE

STATEMENT ISSUED BY THE

BOARD

DIRECTORS

OF

OF

DAO

FINANCIAL HENG

THE FINANCIAL SECRETARY INCORPORATED ("FSI") AND THE

DIRECTORS

ARE PLEASED TO ANNOUNCE THE PARTY TO WHICH IT LIMITED { "HANG

OF DAO HENG HOLDINGS LIMITED ("DAO HENG") THAT FSI HAS SELECTED THE DAO HENG GROUP AS INTENDS TO DISPOSE OF ITS INTEREST IN HANG LUNG BANK, LUNG").

THE

HENG WILL NOW ENTER INTO FSI AND DAO

DISCUSSIONS ON

ANNOUNCEMENT DETAILED TERMS OF THE PROPOSED TRANSACTION AND A FURTHER

AFTER SIGNING OF THE SALE AND AS POSSIBLE WILL BE MADE AS SOON PURCHASE AGREEMENT.

FINANCIAL THE FINANCIAL

MORGAN GRENFELL (HONG KONG) LIMITED IS ACTING AS THE ADVISER TO FSI AND SCHRODERS ASIA LIMITED IS ACTING AS ADVISER TO DAO HENG.

AGREEMENT SIGNED ON RECIPROCAL TAX EXEMPTION ON SHIPPING INCOME

INTO AN AGREEMENT WITH

EXEMPTION

THE HONG KONG GOVERNMENT HAS ENTERED THE U.S. GOVERNMENT INCOME.

FOR RECIPROCAL

OF TAX ON SHIPPING

BY THE COMMISSIONER

OF THE HONG

THE AGREEMENT WAS SIGNED TODAY (TUESDAY) OF INLAND REVENUE, MR ANTHONY AU-YEUNG, ON BEHALF GOVERNMENT AND THE U.S. CONSUL GENERAL, MR DONALD M. ANDERSON.

YEARS

THE AGREEMENT IS EFFECTIVE IN RESPECT OF TAX ON OR AFTER JANUARY 1, 1987 AND WILL CONTINUE TO APPLY AFTER 1997.

KONG

COMMENCING

TO HONG KONG

ENTER INTO RECIPROCAL "AS A GENERAL RULE, HONG KONG DOES NOT

WITH OTHER COUNTRIES BECAUSE OF THE TAX EXEMPTION ARRANGEMENTS

INHERENT

A OUR TAXATION SYSTEM,

SOURCE

CONCEPT

TERRITORIAL GOVERNMENT SPOKESMAN EXPLAINED.

"THE PURPOSE OF THIS AGREEMENT

IN

ΤΟ IS

"

OVERCOME THE PROBLEMS INDUSTRY

POSED BY THE 1986 U.S. TAX REFORM ACT FOR THE LOCAL SHIPPING AND THE PLANNED HONG KONG SHIPPING REGISTER.

/THE 1986