This is the proof that Florida Splendid China is run by the highest levels
of the PRC government. I haven't heard from my contacts to know whether or
not the proper individuals have been contacted, so please keep this to
ourselves (for now).
It is in two parts, one, the text from the prospectus filed last year, and
two, a description of the State Council, which has overall responsibility
for China Travel Services (CTS) through the Office of Overseas Chinese
Affairs.
The appropriate pages will be scanned and placed online in the near future.
Konchuk Gangchen Gonpo
****
During 1996 China Travel Service (Holdings) HK Ltd. Issued additional shares
of stock. A prospectus was prepared to accompany the issue of these new
shares. This prospectus is on file with the Hong Kong government and is
available for public inspection. Page 15 of the prospectus is as follows:
Beginning of page 15.
BUSINESS DESCRIPTION OF THE ISSUER AND THE CTS GROUP
1. INTRODUCTION
History and Development
The origin of China Travel Service (Holdings) Hong Kong Limited (the
"Issuer") and its subsidiaries and affiliates (taken as a whole, the "CTS
Group" or the "Group") dates from April 1928 when China Travel Service, a
company formed in 1927 by Shanghai Commercial Bank, established a branch in
Hong Kong. The Hong Kong branch engaged in passenger and freight
transportation services.
In 1954, the Hong Kong branch of China Travel Service was reorganised and
its business was taken over by China Travel Service (Hong Kong) Ltd. ("CTS
(HK)"), a company incorporated in Hong Kong. CTS (HK) was then the sole PRC
owned travel service organisation in Hong Kong. CTS (HK) was principally
engaged in providing travel and travel-related services to Hong Kong and
Macau residents, overseas Chinese and foreigners visiting the PRC and in
freight forwarding services from the PRC to the international markets via
Hong Kong.
As a result of the economic development and growing prosperity of the PRC,
the volume of trade between the PRC and Hong Kong expanded rapidly in the
early 1980's. In 1985, the Issuer was established as the holding company of
the diversified businesses of the CTS Group and CTS (HK) became its wholly
owned subsidiary specialising in providing passenger travel services.
Ownership and Control Structure
On 9 July 1996, the authorised and issued share capital of the Issuer was
increased from HK$100 million to HK$700 million. The issued share capital of
the Issuer is held by six of its directors and one deputy general manager*
on trust for China Travel Service Head Office of the PRC, which is owned by
the Overseas Chinese Affairs Office ("OCAO") of the State Council of the PRC.
OCAO is one of the working organisations of the State Council of the PRC,
responsible for the liaison and promotion of overseas Chinese affairs. Both
the Issuer and the China Travel Service Head Office of the PRC are directly
accountable to the OCAO. The appointment of senior management of the Issuer
needs to be approved by OCAO. The current General Manager of the Issuer is
Mr. Zhu Yue Ning. He was the Deputy Mayor of Shenzhen from 1986 to 1994,
responsible for development in industry, communication and technology, and
has extensive experience in corporate management and economic development.
The directors and senior management of the Issuer are responsible for
day-to-day management and determine policies and strategies. OCAO directly
oversees and influences overall policy and strategy of the CTS group.
The OCAO and China Travel Service Head Office of the PRC issued a letter
dated 30 October 1996 to the Issuer, confirming their approval and
endorsement of the issue of the Notes, and confirming that the Issuer has
the continued support of the OCAO and China Travel Service Head Office. The
letter is addressed to the Issuer and may be regarded as a letter of intent:
it does not constitute a guarantee to noteholders.
*Namely: Mr. Zhu Yue Ning, Mr. Zhu You Jun, Mr. Shen Zhu Ying, Mr. Zhang
Xiao Shu, Mr. Qiu Yi Yong, Mr. Zheng Hong Qing and Mr Lo Sui On.
End of page 15.
Page 17 has a chart which indicates the ownership structure of the CTS
group. CTS (Holdings) HK Ltd. owns 100% of CTS (HK) Ltd. which in turn owns
100% of Florida Splendid China, Inc.
In summary:
1. The directors of CTS (Holdings) HK Ltd. hold all the shares of their
company on trust for China Travel Service Head Office of the PRC.
2. China Travel Service Head Office of the PRC is owned by the Overseas
Chinese Affairs Office ("OCAO") of the State Council of the PRC.
3. The State Council of the PRC is one of the highest level government
organizations in the PRC and its subordinate working group, the OCAO, is
responsible for appointing senior management and influencing overall policy
for the CTS group.
4. The OCAO issued a letter to CTS (Holdings) HK Ltd. The purpose of this
letter was to assure investors that the Beijing office and ACAO support the
issuance and are likely prepared to financially support CTS (Holdings) HK Ltd.
****
The State Council
Character and Composition
The State Council- that is, the Central People's Government- of the People's
Republic of China is the executive body of the highest organ of state power;
it is the highest organ of state administration.
The State Council is responsible, and reports on its work, to the National
People's Congress or, when the National People's Congress is not in session,
to its Standing Committee.
The State Council is composed of the Premier, Vice-Premiers, State
Councillors, Ministers in charge of ministries and commissions, the
Auditor-General and the Secretary-General.
The term of office of the Premier, the Vice-Premiers and the State
Councillors is five years and they can serve no more than two consecutive terms.
The Premier has overall responsibility for and directs the work of the State
Council. The Vice-Premiers and State Councillors assist in the work of the
Premier.
The plenary meetings of the State Council (composed of all members of the
State Council) and executive meetings (composed of the Premier,
Vice-Premiers, State Councillors and Secretary-General of the State Council)
presided over by the Premier, direct and make policy on important work in
various fields within their power.
Functions and Powers
The State Council exercises the following functions and powers:
(1) Adopts administrative measures, enacts administrative rules and
regulations and issues decisions ad orders in accordance with the
Constitution and the statutes;
(2) Submits proposals to the National People's Congress or it's Standing
Committee;
(3) Lays down the tasks and responsibilities of the ministries and
commissions of the State Council, exercises unified leadership over the work
of the ministries and commissions and directs all other administrative work
of a national character that does not fall within the jurisdiction of the
ministries and commissions; exercises unified leadership over the work of
local organs of state administration at different levels throughout the
country; and lays down the detailed division of functions and powers among
the Central Government and the organs of state administration of provinces,
autonomous regions and municipalities directly under the Central Government;
alters or annuls inappropriate decisions and orders issued by local organs
of state administration at different levels.
(4) Draws up and implements the plan for national economic and social
development and the state budget; directs and administers economic affairs
and urban and rural development; directs and administers affairs in
education, science, culture, public health, physical culture and family
planning; directs and administers civil affairs, public security, judicial
administration and other related matters; conducts foreign affairs and
concludes treaties and agreements with foreign states; directs and
administers the building of national defense; directs and administers
affairs concerning the nationalities, and safeguards the equal rights of
minority nationalities and the right of autonomy of the national autonomous
areas; protects the legitimate rights of Chinese nationals residing abroad
and protects the lawful rights of returned overseas Chinese and of family
members of Chinese nationals residing abroad.;
(5) Approves the geographic division of provinces, autonomous regions and
municipalities directly under the Central Government, and approves the
establishment and geographic division of autonomous prefectures, counties,
autonomous counties and cities; decides on the enforcement of martial law in
parts of provinces, autonomous regions and municipalities directly under the
Central Government.
(6) Examines and decides on the size of administrative organs and, in
accordance with the law, appoints, removes and trains administrative
officers, appraises their work and rewards or punishes them; and;
(7) Exercises such other functions and powers as the National People's
Congress or its Standing Committee may assign it.
Organs
The State Council has under it a General Affairs Office, thirty-six
ministries and nine commissions, an Auditing Administration, and a number of
subsidiary organs and working bodies directly under it's leadership.
General Affairs Office
The General Affairs Office is established in the State Council and directed
by the Secretary-General of the State Council who is assisted by
Vice-Secretary-Generals in his work. The Secretary-General, under the
direction of the Premier, executes the day-to-day work of the State Council.
Ministries and Commissions
Under the State Council are thirty-six ministries or organizations with
ministerial status:
Ministry of Foreign Affairs, etc.
Organs directly under the State Council and working bodies of the State
Council include:
State Bureau of Goods and Materials
State Bureau of Prices
State Bureau of Statistics
State Bureau of Measures
State Bureau of Standards
State Bureau of Industrial and Commercial Administration
State Pharmacological Administration
State Bureau of Building Material Industry
State Bureau of Environmental Protection
State Bureau of Meteorology
State Bureau of Patents
State Bureau of Oceanography
State Bureau of Seismology
State Bureau of Travel and Tourism
Bureau of Religious Affairs of the State Council
State Archives
General Customs Administration
Civil Aviation Administration of China
State Publications Administration
State Copyright Bureau
Working Committee of Chinese Languages
Government Offices Administration of the State Council
Office of the Counsellors of the State Council
Office of Overseas Chinese Affairs of the State Council
