Bangkok--May 18--MDK Consultants (Thailand) KIM ENG HOLDING LIMITED AND TAIWAN ’ S YUANTA GROUP TO FORM STRATEGIC ALLIANCE — Yuanta will increase shareholding in Kim Eng through the sale of its Thailand operation SINGAPORE,MAY 17, 2001 _ Kim Eng Holdings Limited [“Kim Eng ”], holding company of Kim Eng Securities [Pte] Ltd, a leading Singapore stockbroking company, today announced its plan to form a strategic alliance with Yuanta Securities Asia Financial Service Limited [“Yuanta ”], a wholly owned subsidiary of Taiwan ’s Yuanta Core Pacific Securities Co. Limited [“Yuanta Core Pacific ”]. Yuanta Core Pacific is the leading stockbroking company in Taiwan. It is part of the Yuanta Securities Group, which was established in 1961 and is today Taiwan ’s largest securities broking house. Kim Eng and Yuanta have also entered into a sale and purchase agreement in which Kim Eng will acquire 77.73% of Yuanta Securities [ Thailand ] Co Limited [“Yuanta Thailand ”]. In return, subject to any amendment arising from its due diligence exercise, Kim Eng will issue 29,500,000 new shares at S$1.55 each to Yuanta representing approximately 4.9% of its enlarged issued and paid up capital. Yuanta, which currently already owns 4.9% of Kim Eng, will increase its share holding to 9.5% based on the enlarged share capital. The agreement values 77.73% of Yuanta Thailand at S$45.7 million. It takes into account the Net Tangible Asset [“NTA ”] value of Yuanta Thailand of S$33.6 million [ 845 million Thai Baht ] as at March 31, 2001 and its leadership position in Thailand, where it has a market share in excess of 13%. The partnership will focus on the development of several business in Singapore, Malaysia, Thailand, Hong Kong , China, Taiwan, the Philippines and Indonesia , namely : - Asset management and client services, with primary focus on high net worth individuals and institutions - Research - Network for the distribution of securities - Direct investment and/or private equity - Margin financing - Derivative products Commenting on the strategic alliance, Mr Roland Ooi, Managing Director of Kim Eng said : “Over the past 10 years, Kim Eng has built an extensive regional network spanning six Asian countries. With the strategic alliance, we have taken a significant step to strengthen our franchise and consolidate our position as Singapore ’s largest Independent stockbroking firm. Why Yuanta? It is a firm that has operated very successfully in a liberalized environment. Yuanta has diversified its revenue model from a traditional agency business to encompass a broad range of activities, including scrip-borrowing and lending, derivative and asset management. We strongly believe this alliance will bring synergistic benefits to both companies. Mr Lee-Chiou Chang, President of Yuanta Core Pacific Securities said: “We are very excited about the vast potential that this strategic alliance will bring Kim Eng is one of the leading stockbroking companies in Singapore and has a proven track record in the regional markets. Kim Eng will provide us with an immediate penetration into these markets. This ties in well with our plan to move aggressively into markets beyond Taiwan. This strategic alliance will certainly bring us one step closer to our target of becoming the most prominent multinational securities conglomerate in the Asia Pacific region. Together, we will build a strong partnership. ” Upon the completion of the acquisition of Yuanta Thailand, the strategic alliance, which is for an initial period of 180 days, will be extended to five years. At the end of the five-year period, it will automatically be extended for another five years if Yuanta has a 20% equity interest in Kim Eng at that time. If Yuanta ’s shareholding in Kim Eng increases to 24.9%, it will be extended for 10 years. As Yuanta will become a substantial shareholder upon completion of the acquisition of Yuanta Thailand, it will be entitled to appoint two members to the board of Kim Eng. If Yuanta increases its shareholding in Kim Eng to 15%, it will be entitled to appoint one-third of the board members (excluding independent directors). Apart from the above conditions, Kim Eng has given an undertaking to Yuanta of a name change to “Yuanta Kim Eng Holdings Limited ” in the event Yuanta and its related parties hold at least 20% of the share capital of Kim Eng. Kim Eng ’s subsidiaries and associated companies will be similarly renamed. As for the acquisition of Yuanta Thailand, Mr Ronald Ooi said: “With the completion of this acquisition, our market position will be strengthened. Together with our wholly-owned subsidiary, (Kim Eng Securities (Thailand) Limited, one of the top five stockbroking houses), we will have a combined market share in excess of 20%.” Kim Eng and Yuanta have also agreed not to compete with each other in countries where they both have operations for the period commencing one month from the completion date of the acquisition, or six months from the date of the strategic alliance agreement, whichever is earlier. As the proposed acquisition will be completed after the financial year ended March 31, 2001, it will not have an effect on the earnings per share and the NTA value per share of Kim Eng for the financial year ended March 31, 2001. Subsequent to the conclusion of the negotiations on the strategic alliance and acquisition agreements, Kim Eng and Yuanta have been notified of alleged irregular trading activities of Yuanta Thailand ’s customers. The Stock Exchange of Thailand has requested Yuanta Thailand to suspend its trading activities from next Thursday (May 24, 2001). Kim Eng and Yuanta Thailand together to enhance its control, compliance and auditing procedures, to have the suspension tilted as soon as possible. ABOUT KIM ENG HOLDING LIMITED Kim Eng Holdings Limited is the holding company of one of Singapore ’s leading stockbroking houses, Kim Eng Securities (Pte) Ltd. With almost 30 years ’ track record, Kim Eng ’s clientele base includes not only retail investors but also major corporations and international financial institutions. Besides stockbroking, it is involve in research, equity underwriting, share financing, investment advisory, corporate finance and custodian services. Through its successful regionallsation strategy, Kim Eng has built up a more than 1000-strong international network spanning a 24-hour time zone, from East Asia to London and New York. It is a full-fledged member of the stock exchanges in five East Asian markets — Singapore, Thailand, Hong Kong, Indonesia and the Phillppines. ABOUT YUANTA GROUP Established in 1961, the Yuanta Group is Taiwan ’s largest securities broking house. Yuanta Core Pacific, Its flagship company, was fomed in 2000’ after the marger of Yuanta Securities, Core Pacific Securities and Data Securities. With 71 branches islandwide, it has the most extensive network and the largest market share in Taiwan. With a market capitalisation of US$1.4 billion, Yuanta reported first quarter earnings before tax of US$77 million, market it Taiwan ’s most profitable brokerage. For the financial year ended December 31,2000. Yuanta ’s earnings before tax was US$127 million. The leader in stockbroking. Yuanta is also ahead of its competitors in corporate finance, equity underwriting and derivatives trading. With a margin loan book of more than S$1 billion,it is the biggest player in share financing amongst securities houses in Taiwan. Yuanta is also involved in futures brokerage, asset management and the provision of investment trust services. Issued on behalf of : Kim Eng Holdings Limited By : Citigate Dewe Rogerson IMAGE Pte Ltd 55 Market Street # 11-01/03 Sinsov Building Singapore 048941 ---------------------------------------------------------- For more information, please contact: Mr. Somkanay Thamnoonragsa KIM ENG SECURITIES (THAILAND) LTD. Tel. 231-2700 Ms. Jaruwannee Ponghunsa YUANTA SECURITIES (THAILAND) CO., LTD. Tel. 658-6300 MDK Consultants (Thailand) Ltd. Suntaree Chinprahut, Varaporn Keatchaiwanit Tel. 658-6111-20 End.-AN-