A joint venture party of Aoyuan"s Beijing project([independent third party]) had been in default of its obligations to the Original Lenders under the Finance Documents which constituted events of default thereunder. On 28 July 2011, a wholly-owned subsidiary of the Company as Purchaser and the Original Lenders as Sellers entered into the Transfer Documents, pursuant to which the Original Lenders agreed to assign absolutely to the Purchaser all the rights, interests and obligations relating to the Original Lenders" respective participations in the Finance Documents at a total consideration of HK$713,430,000. Accordingly, the Security Agent appointed the Receivers and enforced the Security Assets pursuant to its rights duly given under the Share Mortgage in order to protect the interests of the Purchaser as creditor of the Loan and of the Security Agent as mortgagee of the Security Assets respectively.

The Company received a Writ of Summons dated 15 August 2011 and an Inter Parte Summons dated 16 August 2011 issued by Hong Da against the Company, Aoyuan International, Century Profit (collectively, the "Parties"), the Purchaser, the Security Agent and the Receivers. The Application was heard on 19 August 2011. In the hearing, (a) an adjournment for hearing of the Application was granted until 20 October 2011; and (b) before determination of the Application, each of the Parties, the Purchaser and the Security Agent undertook not to deal with, whilst the Receivers were restrained from dealing with the Security Assets and the relevant interest in Beijing Yaohui.

The Group has instructed lawyers to handle the legal proceedings of the Application and will continue to use its best endeavours to protect the interests of the Company and the shareholders as a whole.