Controlling Shareholder to Take over Company Competitor

The company recently received a notice from China Railway Engineering Corporation (CREC), its controlling shareholder, stating that the State-owned Assets Supervision and Administration Commission of the State Council decided to transfer to CERC the overall assets of Guangdong Zhonghai Engineering Construction Bureau (GZECB), a competitor of the company, without consideration.

As the company is not eligible to acquire GZECB and GZECB is to be transformed into a limited liability company, on 7 Nov 2008, the company's board of directors approved CREC to obtain GZECB's property rights and maintained the company's right of first refusal in the acquisition of GZECB from CREC, in compliance with an agreement on avoiding intra-industry competition signed on 18 Sept 2007 by the company and CREC.

An additional meeting of the board of directors will be convened to examine the acquisition of GZECB following the transfer of GZECB.

Board of Directors
10 Nov 2008


Source: Shanghai Stock Exchange

Date: 10 Nov 2008

CN01/RP/JL/JE/KM