Regarding the entrusted loan arrangement announced on 8 December 2011, China Chengtong Development Group (HKG:0217) said as stated in the announcement, the borrower Beijing Yinxin Xingye Real Estates Development shall provide certain security for the entrusted loan. As the borrower was unable to complete the registration of the charge over the land, Chengtong Financial Leasing has not released the entrusted loan to the borrower.

On 19 January 2012, Chengtong Financial Leasing and the borrower entered into an agreement to terminate the entrusted loan arrangement. Pursuant to such agreement, the borrower shall be responsible for all expenses incurred in connection with the entrusted loan arrangement (including by not limited to legal fees and audit fees).

The directors of China Chengtong consider that the termination of the entrusted loan arrangement have no material adverse impact on the financial and operational position of the company.