Shareholder newsletter 9th September 2015

Dear Shareholders,
We heard yesterday from Frank Li, Tim Clissold's colleague in China, that he had spoken to the Linyi government official who is handling our case. She was friendly and helpful and reported that:

In August, Governor Guo issued a letter to the UK Ambassador stating that he had asked the Shandong Provincial Bureau of Commerce to look into our situation with LVST with a view to understanding the situation and encouraging a negotiated settlement. The Provincial Bureau passed his request for information to the Linyi City Commerce Bureau with a request for the issue to be resolved.

Frank Li spoke yesterday with the Linyi Commerce Bureau official handling the case. She noted:

o the Provincial office had requested documents from Wang but not from

Sorbic;

o the official found that the documents we had already submitted were clear and sufficient and that they needed nothing more at this stage;

o Wang's letter to her, like ours, was balanced, objective and non- accusatory; Wang was complying with all of her requests and she would pass all the information onto the Provincial Bureau.

We believe that this is a significant step forward to resolving the issue. It is clear now that the Governor has responded exactly as we had hoped and that Wang feels significant pressure from the Governor. The Linyi Commercial Bureau informed Frank Li that Wang has stated in writing his willingness and intention to resolve the issues, which will make it difficult for him to continue his strategy of procrastination. It also suggests that once we do come to an agreement, the government will be supportive of implementing that agreement.
Our focus now is on maintaining the momentum initiated by our letter to the Governor.
John Mclean

Non-executive Chairman

9th September 2015

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