At the 26th Meeting of the 3rd Board of Directors, a major asset restructuring and an asset acquisition via private placement was examined and approved .

During implementation of the major asset restructuring, it is found that Huachen Trust Co., Ltd. was not qualified as a subscriber to the private placement. Even after several negotiations, restructuring parties still have not reached any agreement on the issue. In the meantime, following disclosure of the major assets restructuring scheme, the domestic and international economic situation has changed significantly, which causes uncertainties in profit projection after the company's restructuring.

Consequently, parties related to the matter all agreed to terminate the restructuring scheme, and signed a framework agreement on termination of the major asset restructuring on 20 Nov 2008, when the issue, which constitutes a related-party transaction, was examined and approved at the 28th Meeting of the 3rd Board of Directors.

In addition, the company commits that there will be negotiation or plan regarding asset restructuring within the next three months.

Board of Directors
20 Nov 2008


Source: Shanghai Stock Exchange

Date: 21 Nov 2008

CN01/AX/MR/VW