Foreign-Backed Online Trading JV Obtains Chinese Gov’t Licenses

[BEIJING] The joint venture between Los
Angeles-based Hartcourt Companies, Inc. and UAC Online Stock Trading
Inc. of China has been approved by the government, Harcourt announced
on Friday.

The Chinese Government has issued the JV an Official Business License
and a Certificate of Foreign Investment despite the repeated official
declarations that foreign investment in domestic Internet companies was
technically illegal under Chinese law.

Harcourt claims that UAC is the first operating agent designated by China
Telecom to bring Chinese brokerages online.

UAC’s system has been in
operation at two offices of China Securities in Beijing and 12 additional
offices should be wired up during the next few weeks.

China Securities, the second-largest brokerage firm in China, has signed an
agreement to install the UAC system in all of its 98 offices nationwide.

At present, there are 4,000 brokerage offices in China serving 40 million
investors. UAC’s mission is to quickly capture as much market share as
possible.

Total revenues, excluding the TV set-top box users segment, are
projected to exceed $40 million by 2004.

Alan Phan, chairman and chief executive officer of Hartcourt, stated, “We were surprised
to receive the licenses this early. Our Chinese partners have delivered more
than expected.”

“With its technology and infrastructure, UAC has positioned itself to
become the first and major E-trade in China,” said Phan.

UAC is also working with Financial Telecoms Ltd (FTL) of Hong Kong to
create a Chinese language financial portal for the Internet users of China
and Hong Kong.

According to Harcourt, the merged entity, with the participation of
additional well-known American and Chinese strategic partners, will
proceed with an IPO planned for the 2nd quarter of 2000. Officials did not
indicate where shares of the company will be listed.