The company reached a compromise with Beijing Beida Jade Bird Sci-Tech Co., Ltd., Beijing Urban Construction Donghua Real Estate Development Co., Ltd. and Beijng Donghua Guangchang Property Co., Ltd. over a RMB 1.5 bln debt dispute.

According to the compromise agreement signed between the above-mentioned parties and the company, Beijing Urban Construction Donghua Real Estate Development will repay the RMB 1 bln debt to the company. Of the RMB 1 bln, RMB 700 mln will be paid within 3 days after the mediation order of the Higher People's Court enters into force and the remaining RMB 300 mln will be paid as outlined in the agreement.

If Beijing Urban Construction Donghua Real Estate Development fails to pay the RMB 700 mln in time, the company holds the right to claim for interest for the RMB 700 mln as well as the right to apply for a compulsory enforcement.

If Beijing Urban Construction Donghua Real Estate Development pays the RMB 700 mln in time, the company will withdraw another lawsuit against the aforementioned defendants.

Following a full payment of RMB 1 bln, the company will loan RMB 800 mln to Beijing Beida Jade Bird Sci-Tech under the condition that Beijing Beida Jade Bird Sci-Tech could provide a pledge of no less than RMB 1.6 bln.

Beijing Beida Jade Bird Sci-Tech promised that the collateral for the RMB 800 mln loan is acceptable according to relevant regulations. Beijing Urban Construction Donghua Real Estate Development will repay the RMB 300 mln to the company within 5 days after the receipt of a written confirmation letter about the collateral from the company. If the company fails to provide a loan for Beijing Beida Jade Bird Sci-Tech within the agreed period even though Beijing Beida Jade Bird Sci-Tech meets all requirements for a loan, the company should return the RMB 300 mln to Beijing Urban Construction Donghua Real Estate Development.

As of the date of this announcement, the company has made RMB 600 mln as impairment reserve for the RMB 1.5 bln overdue loans.

Board of Directors
21 Nov 2008

Source: Securities Times

Date: 21 Nov 2008

CN01/DC/LZ/VW/JW