Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - Cash issuer bid made in Canada - Bid madein accordance with the laws of Hong Kong - de minimisexemption unavailable because Hong Kong not recognized jurisdictionin Ontario - Bid exempted from the requirements of Part XX,subject to certain conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as amended,ss. 93(3)(h), 95, 96, 97, 98, 100 and 104(2)(c).

Recognition Orders Cited

In the Matter of the Recognition of CertainJurisdictions (Clauses 93(1)(e) and 93(3((h) of Act) (1997)20 OSCB 1035.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, BRITISH COLUMBIAAND ONTARIO

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

SCMP GROUP LIMITED

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of Alberta, British Columbia and Ontario (the"Jurisdictions") has received an application fromSCMP Group Limited ("SCMP") for a decision under thesecurities legislation of the Jurisdictions (the "Legislation")that the formal issuer bid requirements in the Legislation,including the provisions relating to delivery of an offer andissuer bid circular and any notices of change or variation thereto,minimum deposit periods and withdrawal rights, take-up of andpayment for securities tendered to a bid, disclosure, financing,identical consideration and collateral benefits (collectively,the "Issuer Bid Requirements") do not apply to theproposed issuer bid offer (the "Offer") by SCMP torepurchase up to 173,438,400 issued ordinary/common shares (the"Shares") of SCMP from its shareholders;

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System")the Ontario Securities Commission is selected as the principalregulator for this application;

AND WHEREAS SCMP has represented to theDecision Makers that:

1. SCMP is a corporation incorporated underthe laws of Bermuda. SCMP's registered office is located inBermuda and its principal place of business is in Hong Kong.

2. SCMP's issued share capital as at December31, 2001 consisted of 1,733,784,078 ordinary shares of HK$0.10nominal value each (each a "Share") plus 136,447dilutive Shares in respect of outstanding Share options. TheShares are listed on the main board of The Stock Exchangeof Hong Kong Limited.

3. SCMP is not a reporting issuer in Ontario,nor is it a reporting issuer or the equivalent in any otherjurisdiction in Canada.

4. The Offer was announced on September 3,2002 and will be made to all holders of the outstanding Shares(the "Shareholders"). The Offer is an all cash offerwhereby SCMP is offering to repurchase up to a maximum of173,438,400 Shares at an offer price of HK$3.60 per Share.This Share repurchase by general offer constitutes an issuerbid for such Shares.

5. The Offer is being made in accordance withthe laws of Hong Kong and Bermuda and The Codes on Takeoversand Mergers and Share Repurchases (the "Hong KongCode"), and not pursuant to any exemptions from suchrequirements. The Hong Kong Code is regulated by the HongKong Securities and Futures Commission (the "HKSFC").

6. Pursuant to the Hong Kong Code, SCMP submittedto the HKSFC for its review and approval an offer documentcontaining the terms and conditions of the Offer and prescribeddisclosure (the "Offer Document"). The Offer Documenthas been approved by the HKSFC and was mailed by SCMP to Shareholderson September 23, 2002. Pursuant to the Hong Kong Code, theShareholders have a 21 day period during which to accept theOffer, including 14 days after the Offer becomes unconditional.

7. The Offer is conditional upon the approvalof Shareholders at a special general meeting, expected tobe held on or around October 7, 2002. The notice conveningsuch meeting is included in the Offer Document.

8. There are a total of 6 Shareholders withregistered addresses in the Jurisdictions (the "CanadianShareholders"). The Canadian Shareholders hold in theaggregate less than 2% of the issued and outstanding Sharesas set out below:

Province

Number of Shareholders

Number of Shares Held

Approximate Percentageof Outstanding Shares at September 2, 2002

Value of Assured Entitlementsunder Offer (HK$)

Ontario

3

21,050

0.0012%

11,632

British Columbia

2

5,300

0.0003%

2,929

Alberta

1

2,000

0.0001%

1,105

Total

6

28,350

0.0016%

15,666

9. On the basis of the Offer price of HK$3.60per Share, the aggregate value of the Shares registered inthe names of the Canadian Shareholders amounts to HK$102,060.

10. Assuming successful completion of theOffer, the total amount of consideration to be paid by SCMPto all accepting Shareholders is HK$624,378,240. Assumingsuccessful completion of the Offer and that the Canadian Shareholderstender acceptances in respect of their assured entitlementsof 3.07 Shares for every 20 held, the aggregate amount ofconsideration that would be paid to Canadian Shareholdersunder the Offer would be HK$15,666.

11. SCMP cannot rely on the de minimisexemption from the issuer bid requirements because the DecisionMakers have not recognised Hong Kong for this purpose in theLegislation.

12. The Offer will be made on the same termsand conditions to the Canadian Shareholders as it has beenmade to all Shareholders, including offering identical consideration.

13. The Offer Document and all other materialrelating to the Offer, including any amendments, that willbe sent by SCMP to Shareholders residing outside Canada shallconcurrently be sent to the Canadian Shareholders and filedwith the Decision Makers.

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each of the DecisionMakers (the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that SCMP is exempt from the Issuer Bid Requirementsin making the Offer to the Canadian Shareholders provided that:

(a) the Offer and all amendments to theOffer are made in compliance with the laws of Hong Kongand Bermuda, including the Hong Kong Code; and

(b) the Offer Document and all other materialrelating to the Offer, including any amendments, that aresent by or on behalf of SCMP to Shareholders residing outsideCanada are concurrently sent to the Canadian Shareholdersand copies of such material are filed as nearly as practicablecontemporaneously with the Decision Maker in each Jurisdiction.

September 30, 2002.

"Paul M. Moore"                    "RobertL. Shirriff"