Dear Shareholder

Chief Executive’s Update

The resignation of my predecessor, Simon Littlewood, in 2007 and his relocation to Hong Kong removed from London Asia Capital plc (LAC) the resources and knowledge necessary to run the business in the long term. My main priorities on joining the Board in late September were, therefore, to put this right and then to prepare and file accounts for the year to 31 December 2007. The initial plan was to do this by 5 December in time to maintain the Company's AIM listing and to enable us achieve this Toby Parker ACA was appointed Finance Director. However, it quickly became apparent that, with little of the necessary information in the UK and with the need to obtain robust fair valuations for the investee companies and to prepare audited accounts for the many subsidiaries in a wide range of distant countries, more help was needed.

Since the start of 2009, with the support of the China IPO Ltd Directors, The Earl of Cromer, Professor Francesco Gardin and Dennis Bailey, who agreed to join your Board in December, substantial progress has been made. We now have main board Directors on the Boards of most of our important subsidiaries and as signatories on the main bank accounts. We have visited some of our most important investments. In common with many companies the net worth of the business is substantially less than that reported in the 2007 interims. Nevertheless, the business appears to have some assets with real value.

Your Board is now exploring the ways in which it might be possible to return some cash to shareholders and restore liquidity in the shares by returning them to The AIM Market. Whether or not these plans have been fully developed or we have been able to finalise the accounts it is our intention to convene a General Meeting before the end of April, by which date we will be able to provide shareholders with more comprehensive information.

Your sincerely

Keith Negal

Chief Executive