Subsidiary's Qualification for Real Estate Development Suspended

Pursuant to a notice issued by the Shenzhen Municipal Bureau of Land Resources and Housing Management on 24 Jul 2008, the qualification for real estate development of Shenzhen SEG. Dasheng Real Estate Development Co., Ltd. (SSDRED), the company's wholly-owned subsidiary, was suspended due to the default on special public facility funds by SSDRED.

The main content of the notice is as follows:
The Construction Bureau of Futian District has twice issued written notices to remind SSDRED to pay the special public facility funds. SSDRED, however, failed to fulfill its payment obligation prior to the deadline, which violated Provision 91 in the Regulations of the Shenzhen Special Economic Region on Property Management and Provision 6 in the Management Regulations on Special Funds of Public Facilities of Shenzhen.

In compliance with Provision 116 in the Regulations of the Shenzhen Special Economic Region on Property Management and Provision 23 in the Management Regulations on Special Funds of Public Facilities of Shenzhen, the qualification of SSDRED was suspended by the Shenzhen Municipal Bureau of Land Resources and Housing Management. SSDRED can apply for administrative reconsideration within 60 days following the receipt of the notice, or appeal to the court within three months.

The company plans to take the following measures:
1) to adjust the operating direction and strategy of SSDRED
2) to negotiate positively with the Shenzhen Municipal Bureau of Land Resources and Housing Management in order to assist SSDRED to pay off the funds.

Board of Directors
25 Jul 2008


Source: Securities Times

Date: 26 Jul 2008

CN01/SC/LZ/BT/KM