The company received summons for the following case from the Guangdong Zengcheng People's Court:

On 20 Apr 2008, Guangzhou Hehui Real Estate Co., Ltd. (plaintiff) signed a contract with the company (the first-mentioned defendant) to purchase a land use right, covering an area of 24,518 sq. meters, located at 1 Baolong Road, Xintang Town, Zengchen, Guangzhou Province, for RMB 11,320,700. According to the contract, Guangzhou Hehui paid the company RMB 8 mln as down payment and RMB 2,088,000 as advance payment for the transfer.

On the same day, Yang Longjiang (the second-mentioned defendant) signed a warranty to guarantee the repayment of the above-mentioned RMB 8 mln down payment for the company by pledging his residential property at 888 No. 1 Street, Fenghuang Yuan, Fenghuang, Guangdong Province.

However, as the company has failed to fulfill the terms of the contract, on 4 Jul 2005, Guangzhou Hehui filed a lawsuit to the Zengchen People's Court, which ruled that the transfer should be canceled and the company should reimburse a total of RMB 10,088,000 to Guangzhou Hehui.

As of the date of this announcement, the company has yet to make any payment.

Thus, Guangzhou Hehui has petition the court to summon the company to pay interests related to the RMB 10,008 amount and bear legal fees.

The company will make an appearance in court and respond to the lawsuit in a timely manner.

Board of Directors
12 Sept 2008


Source: Shanghai Stock Exchange

Date: 12 Sept 2008

CN01/CJ/JL/BT/KM