China Energy Development : Announcements and Notices - Discontinuance of Proceedings Against the Vendor of the totalbuild Transaction

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 228)

DISCONTINUANCE OF PROCEEDINGS

AGAINST THE VENDOR OF THE TOTALBUILD TRANSACTION

Reference is made to the announcements (the ''Announcements'') of China Energy Development Holdings Limited (the ''Company'') (a) dated 16 September 2013 in relation to media reports about Mr. Wang Guoju; (b) dated 7 June 2015 in relation to charges against Mr. Wang Guoju for illegal operation crime involving allegations about improper conduct during the obtaining of the Petroleum Contract (the ''Illegal Operation Charge''); (c) dated 17 June 2015 in relation to the commencement of the Litigation in the Grand Court of the Cayman islands (the ''Cayman Court'') against (inter alia) the Defendants (including Mr. Wang Guoju and UK Prolific) with the view to obtaining Cayman Court's order to have the Totalbuild Transaction declared void or rescinded and have damages awarded to the Company; (d) dated 25 June 2015 in relation to the obtaining by the Company of the Injunction Order from the Cayman Court restraining the Defendants from disposing of, transferring, dealing in, diminishing the value of or exercising voting rights in respect of 1.86 billion issued Shares (the ''Restrained Shares''), and restraining the Defendants from converting convertible bonds representing 13,366,190,476 underlying Shares (the ''Restrained CBs''); (e) dated 18 August 2015 in relation to the continuation of the Injunction Order against the Company's undertaking not to issue or deal with additional Shares or securities without leave of the Cayman Court until the conclusion of the trial relating to the Litigation or further order by the Cayman Court (the ''Company's Undertaking''); and (f) dated 6 December 2017 in relation to the signing of the Supplemental Contract between the Group and CNPC to extend the First Phase exploration period by way of supplement and amendment to the original Petroleum Contract. Unless the context otherwise requires, capitalized terms used in this announcement shall have the same meanings as defined in the Announcements.

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For identification purposes only

Following the signing of the Supplemental Contract with CNPC on 6 December 2017, the Company was informed by Mr. Wang Guoju and his legal representative that the Illegal Operation Charge against Mr. Wang Guoju was acquitted. On that basis and after taking legal advice from the Company's legal advisers, the Company has on 27 December 2017 reached settlement with the Defendants pursuant to which the Company will apply to the Cayman Court for discontinuance of the Litigation, as a result of which the Injunction Order and the Company's Undertaking would be discharged such that the Defendants should no longer be restrained in respect of the Restrained Shares and the Restrained CBs.

By order of the Board

China Energy Development Holdings Limited

Zhao Guoqiang

Chief Executive Officer & Executive Director

Hong Kong, 27 December 2017

As at the date of this announcement, the Board comprises Mr. Zhao Guoqiang (Chief Executive Officer and alternate director to Dr. Gu Quan Rong) as executive director; Dr. Gu Quan Rong and Ms. Ngan Mei Ying as non-executive directors; and Mr. Zong Ketao, Mr. Cheng Chun Ying and Mr. Lee Man Tai as independent non-executive directors.