Auto (No. 5) Co., Ltd. (hereinafter called Auto No. 5), the second largest shareholder of Lingyun Industrial Group Co., Ltd., rescinded the mortgage of 73,882,640 corporation shares on May 30th 2007.

On the same day, Auto No. 5 re-mortgaged 73,882,640 corporation shares to Shenzhen Sunlong Communication Co., Ltd., and the mortgage registration procedures were carried out in Shanghai Branch of China Securities Depository and Clearing Corporation Limited.