On 27 June 2008, the company held its 2007 General Meeting of Shareholders in Shenzhen, at which, Chairman Xu Min told reporters that the company will relocate to Hainan Province.

Xu told reporters that 90% of the company's debts have been repaid, however, the rest remain difficult to recover. The proposal to relocate the company to Hainan will be discussed within the week. He said that as a part of the company's bankruptcy reorganisation scheme, the furniture business of Hainan Rulai Wood Industry Co., Ltd., a major shareholder of the company, will be fully injected into the company.

Holders of tradeable shares are concerned whether the reorganisation scheme will affect their benefits. Xu said that the scheme will be designed by professional institutions and that the total related assets and fees will total approximately RMB 100 mln, which will hopefully be committed by holders of non-tradeable shares.

The relocation of the company to Hainan is a step towards its bankruptcy reorganisation. According to the Enterprise Bankruptcy Law of the People's Republic of China, the company has met certain conditions for the reorganisation.

Xu is excited and confident about the new solution to the company's problems and is now soliciting related government authorities in Hainan for support.

Source: Security Times

Date: 28 Jun 2008

CN01/NW/MZ/BT/KM