100% of the votes cast at the Adjourned Meeting were in favour of Resolution 3, thereby approving the Alternative Proposal for the Directors to liquidate the Fund if Resolution 1 was not passed or any of the other conditions in respect of the implementation of the Proposal are not satisfied.
On the basis of the mandate from the Shareholders in favour of the Proposal, the Directors are proceeding to negotiate implementation of the Proposal. However, as a result of further direct negotiations subsequent to the issue of the Circular, between the Fund's investment manager ("Martin Currie") and both China Securities Corporation Limited ("CSC") and the China Securities Regulatory Commission ("CSRC"), additional commercial and regulatory issues in relation to the implementation of the Proposal have emerged. The Directors and Martin Currie are urgently seeking clarification of such issues through a continuing dialogue with CSC and CSRC and implementation of the Proposal will be conditional upon both satisfactory resolution of these issues and the negotiation of satisfactory arrangements for the swap in the context of PRC law and regulations. The Directors are seeking to resolve such outstanding issues and negotiate satisfactory arrangements for the Proposal by 15 June 2002.
Whilst negotiations for the implementation of the Proposal continue, the Directors believe it to be in the best interests of Shareholders to seek to agree with CSC repayment of all the monies held in the "B" share account with Citibank NA in New York on an accelerated basis and such monies will be held by the Fund's Mauritian subsidiary pending satisfactory resolution of the commercial and regulatory issues relating to the implementation of the Proposal.
If the commercial and regulatory issues cannot be satisfactorily resolved by 15 June 2002, the Directors will adopt Resolution 3 as approved and take all necessary steps to liquidate the Fund in accordance with the Alternative Proposal set out in the Circular."