Microsoft Word - Letter From IBC.DOC

CHANGFENG AXLE (CHINA) COMPANY LIMITED

暢豐車橋（中國）有限公司

(Incorporated in the Cayman Islands with limited liability)

17 February 2015
To: the Independent Shareholders
Dear Sir or Madam,
We refer to the circular of the Company to the Shareholders dated 17 February 2015 (the "Circular"), of which this letter forms part. Unless the context requires otherwise, capitalized terms used in this letter will have the same meanings as defined in the Circular unless the context otherwise requires.
We have been authorised by the Board to form the Independent Board Committee to advise the Independent Shareholders as to whether (1) the terms and conditions of the Subscription Agreement, the Loan, the Acquisition Agreement and the respective transactions contemplated thereunder (including the allotment and issue of the Consideration Shares and the Subscription Shares under the Specific Mandate) are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole; and (2) the Whitewash Waiver is fair and reasonable and in the interests of the Company and the Shareholders as a whole.
We wish to draw your attention to the letter of advice from Somerley Capital Limited appointed to advise the Independent Board Committee and the Independent Shareholders on the terms and conditions of the Subscription Agreement, the Loan, the Acquisition Agreement and the respective transactions contemplated thereunder (including the allotment and issue of the Consideration Shares and the Subscription Shares under the Specific Mandate) and the Whitewash Waiver as set out on pages 42 to 72 of the Circular and the letter from the Board as set out on pages 8 to 39 of the Circular.
Having considered the factors and reasons considered, and the opinions as stated in its letter of advice, we consider that (1) the terms and conditions of the Subscription Agreement, the Loan, the Acquisition Agreement and the respective transactions contemplated thereunder (including the allotment and issue of the Consideration Shares and the Subscription Shares under the Specific Mandate) are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole; and (2) the Whitewash Waiver is fair and reasonable and in the interests of the Company and the Shareholders as a whole and accordingly recommend the Independent Shareholders to vote in favour of the ordinary resolutions in relation to the Subscription Agreement and all transactions contemplated thereunder (including issue and allotment of the Subscription Shares under the Specific Mandate and the Loan), the Acquisition Agreement (including issue and allotment of the Consideration Shares under the Specific Mandate) and the Whitewash Waiver to be proposed at the EGM.

Address: Room 708, 7/F., Delta House, 3 On Yiu Street, Shatin, New Territories, Hong Kong.

Tel.: (852) 2638 1663 Fax: (852) 2638 1130

For and on behalf ofthe Independent Board Committee of Changfeng Axle (China) Company Limited

Mr. Chong Ching Hei

Independent Non-executive Director



For and on behalf ofthe Independent Board Committee of Changfeng Axle (China) Company Limited

Dr. Li Xiuqing

Independent Non-executive Director

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For and on behalf ofthe Independent Board Committee of Changfeng Axle (China) Company Limited

Mr. Zhu Weizhou


Independent Non-executive Director

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