Independent Shareholders Urge Other Shareholders to Vote for Change at China Yuchai International's Special General Meeting

RALEIGH, N.C., Aug. 10  /PRNewswire/ -- The below letter to shareholders is being issued by Shah Capital Management, Trellus Management, Quasar Capital Management and Mr. Muller:

China Yuchai International (ticker CYD, listed on the New York Stock Exchange), has a history of failing to file accurate annual financials in a timely fashion, little communication with the investment community and a total lack of transparency.  In May of this year a group of independent shareholders, some of whom had been working to affect change at the company for more than 2 years, sent a letter to the board offering a final opportunity to engage in constructive dialogue in private and make changes to address the shortcomings outlined above. Unfortunately, management refused to enter into discussions and shareholders have been left with no choice but to demand that the company call a special meeting of shareholders.

The board of directors currently has no allegiance to the majority of the shareholders.  The reason for this is a so-called "special share" that gives one minority shareholder, Hong Leong Asia, owner of 21.2% of the outstanding stock, the right to appoint a majority of the directors and to veto any proposal by any other shareholders, even if they are passed by an overwhelming majority of shares.  The special shareholders' meeting will be asked to vote for the elimination of the Special Share, the removal of two directors - Mr. Teo Tong Kooi, the former president and the head of the audit committee, Mr. Tan Aik-Leang, who was responsible for overseeing issuance of financial statements at a time when the annual audited statements were filed up to a year late.  Also, no quarterly statements were issued at all until very recently 1st Quarter of 2009 results were released without a conference call.  The shareholders will also be asked to allow the independent shareholders to elect two independent directors with relevant industry experience.

After first distributing proxies recommending a vote "for" the proposals from the shareholders, China Yuchai International's (CYI) board of directors changed its mind, stated it made a mistake and now asks for a vote "against" these proposals.  This action clearly shows their lack of competence.

What does an independent, impartial proxy advisory firm think about this?  Proxy Governance, Inc. in a nine page analysis recommends a vote "for" the independent shareholders' proposals.  Their conclusions regarding China Yuchai and its board include comments such as: ". . .manifestly poor governance and management practices. . .", ". . .questionable business decisions. . ." and ". . . the company's significant failures to proactively support shareholder value. . ."

China Yuchai International's Special general meeting will take place on September 4th, 2009 in Kuala Lumpur.  We encourage all shareholders of CYI to review Proxy Governance, Inc.'s analysis before casting their votes.  In light of the limited time remaining before the meeting, we also urge the shareholders to vote on the internet.  We would like to STRESS THE IMPORTANCE OF YOUR VOTE as two thirds of the common share majority is needed to pass the binding resolutions.

We also make a request to the board of CYI to publicly release the proxy results "For" and "Against" after the Special General meeting.

About Shareholders (Shah Capital Management, Quasar Capital Management, Trellus Management, Mr. Muller)

Shah Capital Management, based in Raleigh, is an SEC registered investment advisor to private investment fund as well as separately managed accounts

  Trellus Management is a private money manager based in New York
  Quasar Capital Management is a private money manager based in New York
  Mr. Muller is an investor and entrepreneur based in Connecticut

  Cautionary Statement Regarding Forward Looking Statements


This letter contains forward-looking statements. All statements contained in this letter that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. These statements are based on our current expectations and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate. We do not assume any obligation to update any forward-looking statements contained in this letter.

Shah Capital Management, Don Espey [phone]

Quasar Capital Management  [phone] 

DATASOURCE: Shah Capital Management



CONTACT:  Shah Capital Management, Don Espey, [phone]



Web Site:  http://www.shahcapital.com/ 

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