HKEx has maintained close contact with Euro-Asia Agricultural since doubts arose about its management

Regulatory

11 Oct 2002

Hong Kong Exchanges and Clearing Limited (HKEx) has kept in close touch with Euro-Asia Agricultural (Holdings) Limited since doubts arose in July about the quality of its management, and its compliance with the Listing Rules.

It wrote to the company's listing sponsor on Thursday (10 October) asking it, together with the company and its professional advisers, to address questions that have arisen concerning the accuracy of some of the information in its prospectus.

Since 12 July we have made enquiries with the company on numerous occasions and requested it to make announcements, concerning share price fluctuations; rumours of resignations by the CEO and directors; the whereabouts of its chairman; investigation of possibly criminal acts in China by the chairman and his detention; his appointment as chief executive of a North Korean SAR; and other price sensitive information, said an HKEx spokesman, .

Trading in the company's shares was suspended on 19 September and resumed from 26 to 27 September. Trading was again suspended on 30 September and remains suspended.

HKEx has been in frequent contact with the company seeking answers to these and other questions, some of which were satisfactorily answered and others were not. Where there is possible non-compliance with the ongoing obligations of the Company under the Listing Rules, HKEx would look into the matter and take appropriate actions.

HKEx was making every effort to obtain information which the company is obliged to give under its Listing Agreement, the spokesman said. We shall continue to press the company to clarify matters in the interests of shareholders and for the maintenance of a fair market, he said.

The chronology of events is attached.

Actions taken by the Stock Exchange in relation to Euro-Asia Agricultural (Holdings) Company Limited (the "Company") since early July 2002

Date	Subject matter	Action taken by the Stock Exchange
12 July 2002	There were press articles reporting, among others, that :- Mr. Yang Bin ( "Mr. Yang"), the Chairman of the Company, was missing; Mr. Yang was involved in illegal land use, tax evasion and insider dealing; Mr. Yang's private business had certain undisclosed connected transactions with the listed group.	The Stock Exchange made enquiry with the Company and requested it to issue a clarification announcement. The announcement was issued on 12 July 2002.
7 Aug 2002	There were fluctuations in the price and trading volume of the Company's shares.	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The announcement disclosed the sale of shares to strategic investors (Win Joy investments Limited and Winshare Investments Limited) by Wise Capital Investments Limited, a controlling shareholding of the Company wholly owned by Mr. Yang.
22 Aug 2002	There were fluctuations in the price and trading volume of the Company's shares.	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The announcement stated that the directors were not aware of any matters discloseable under the general obligation imposed by Paragraph 2 of the Listing Agreement which was or might be of price-sensitive nature.
5 Sep 2002	There were fluctuations in the price and trading volume of the Company's shares.	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The announcement stated that the directors were not aware of any matters discloseable under the general obligation imposed by Paragraph 2 of the Listing Agreement which was or might be of price-sensitive nature.
13 and 16 Sep 2002	There were rumours that Mr. Chen Jun had resigned as CEO and director of the Company	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The Company replied that Mr. Chen had not resigned and was still the CEO and director of the Company and that it would not consider issuing a clarification announcement.
16 Sep 2002	There were fluctuations in the price and trading volume of the Company's shares.	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The announcement stated that the directors were not aware of any matters discloseable under the general obligation imposed by Paragraph 2 of the Listing Agreement which was or might be of price-sensitive nature. Subsequently, the Stock Exchange found out that the Company might have withheld price sensitive information in relation to the resignation of Mr. Chen when it issued the announcement on 16 Sep 2002. The Stock Exchange is looking into the matter and would take necessary action where appropriate.
17 Sep 2002	There were fluctuations in the price and trading volume of the Company's shares.	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The announcement stated that the directors were not aware of any matters discloseable under the general obligation imposed by Paragraph 2 of the Listing Agreement which was or might be of price-sensitive nature. Subsequently, the Stock Exchange found out that the Company might have withheld price sensitive information in relation to the resignation of Mr. Chen when it issued the announcement on 17 Sep 2002. The Stock Exchange is looking into the matter and would take necessary action where appropriate.
19 Sep 2002	The Stock Exchange received a notice from the Securities and Futures Commission (the SFC) on 19 September 2002, which directed the Stock Exchange to suspend the trading of the Company's shares pursuant to sub-Rule 9(1) of the Stock Exchange Listing Rules. Trading of the Company's shares was suspended.	The Stock Exchange reviewed the draft announcement of the Company. The Stock Exchange could not clear the draft announcement as it did not properly address the issue as to whether the Company had withheld any price sensitive information in relation to the resignation of Mr. Chen Jun when the Company issued the announcements on 16 and 17 Sep 2002.
20 Sep 2002	Trading of the Company's shares remained suspended. There were press reports, among others, that:- Mr. Chen Jun had heated argument with someone in the Company and then resigned; there was disagreement within the management of the Company	The Stock Exchange reviewed the revised draft announcement of the Company. The Stock Exchange could not clear the revised draft announcement as it did not properly address the issue as to whether the Company had withheld any price sensitive information in relation to the resignation of Mr. Chen Jun when the Company issued the announcements on 16 and 17 Sep 2002.
23 Sep 2002	Trading of the Company's shares remained suspended.	The Stock Exchange reviewed the revised draft announcement of the Company. The Stock Exchange could not clear the revised draft announcement as it did not properly address the issue as to whether the Company had withheld any price sensitive information in relation to the resignation of Mr. Chen Jun when the Company issued the announcements on 16 and 17 Sep 2002.
24 Sep 2002	Trading of the Company's shares remained suspended. There were press reports that Mr. Yang had been appointed as chief executive of Sinuiju Special Administration Region, North Korea.	The Stock Exchange made enquiry with the Company in relation to this issue and the impact on the Company as a result of his appointment. The Stock Exchange reviewed the revised draft announcement of the Company. The Stock Exchange could not clear the revised draft announcement as it still failed to properly address the issue as to whether the Company had withheld any price sensitive information in relation to the resignation of Mr. Chen Jun when the Company issued the announcements on 16 and 17 Sep 2002.
25 Sep 2002	Trading of the Company's shares remained suspended	The Stock Exchange cleared the announcement together with the SFC.
26 Sep 2002	Trading of the Company's shares resumed. There were fluctuations in the price and trading volume of the Company's shares.	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The announcement stated that save for the announcement dated 25 Sep 2002, the directors were not aware of any matters discloseable under the general obligation imposed by Paragraph 2 of the Listing Agreement which was or might be of price-sensitive nature.
27 Sep 2002	There were fluctuations in the price and trading volume of the Company's shares.	The Stock Exchange made enquiry with the Company and requested it to issue an announcement. The announcement disclosed that Mr. Yang had disposed of 2.37% shares in the Company and save for this, the directors were not aware of any matters discloseable under the general obligation imposed by Paragraph 2 of the Listing Agreement which was or might be of price-sensitive nature.
30 Sep 2002	The Company advised the Stock Exchange that the two announcements issued on 26 and 27 Sep 2002 would need to be clarified. The Company's shares were suspended pending a clarification announcement	The Stock Exchange reviewed the draft announcement of the Company (the Announcement). The Stock Exchange could not clear the draft of the Announcement as it did not properly address why the two announcements would need clarification.
2 Oct 2002	Trading of the Company's shares remained suspended.	The Stock Exchange reviewed the revised draft of the Announcement. The Stock Exchange could not clear the revised draft of the Announcement as it did not properly address why the two announcements would need clarification.
3 Oct 2002	Trading of the Company's shares remained suspended. There were press reports that Mr. Yang was involved in overdue tax in the mainland.	The Stock Exchange made enquiry with the Company as to whether the allegations were related to the Group. The Stock Exchange reviewed the revised draft of the Announcement. The Stock Exchange could not clear the revised draft of the Announcement as it still failed to properly address why the two announcements would need clarification.
4 Oct 2002	Trading of the Company's shares remained suspended. There were press reports that Mr. Yang had been detained in the mainland. The Company informed the Stock Exchange about the resignation of two directors.	The Stock Exchange requested the Company to issue a clarification announcement. An announcement was issued on 4 October 2002 stating that Mr. Yang could not be contacted and that two directors had resigned.
7 Oct 2002	Trading of the Company's shares remained suspended. There were press reports that the Company acquired the listing status by way of fabrication of accounting information.	The Stock Exchange reviewed the revised draft of the Announcement. The Stock Exchange could not clear the revised draft of the Announcement as it still failed to properly address why the two announcements would need clarification.
8 Oct 2002	Trading of the Company's shares remained suspended. There were press reports that Mr. Yang was involved in illegal activities. The Company informed the Stock Exchange about resignations of two other directors.	The Stock Exchange requested the Company to issue an announcement to clarify if the allegations were related to the Group and to disclose the resignation of two other directors.
9 Oct 2002	Trading of the Company's shares remained suspended. There were press reports that certain information in the prospectus, including the size and production of its computerised greenhouses, might not be accurate.	The Stock Exchange reviewed the draft announcement of the Company in relation to the matters noted on 8 Oct 2002. The Stock Exchange could not clear the draft announcement as the Company could not contact a number of its directors.
10 Oct 2002	Trading of the Company's shares remained suspended. There were further press reports that certain information in the prospectus might not be accurate.	The Stock Exchange wrote to the Sponsor of the Company requesting the Sponsor, together with the Company and the relevant professional advisers, to address the accuracy of the accounting information and other information in the prospectus. The Stock Exchange reviewed the revised draft of the announcement in relation to the matters noted on 8 Oct 2002. The Stock Exchange requested the announcement to address other price-sensitive matters including any demands for repayment of loans. An announcement was issued on 10 Oct 2002. The Stock Exchange is requesting the Company to provide a revised draft of the Announcement to address all other outstanding matters.

Updated 11 Oct 2002