BEIJING, Jan. 6, 2011 /PRNewswire-Asia-FirstCall/ -- Qiao Xing Mobile Communication Co., Ltd. (NYSE: QXM) (the "Company" or "QXM"), a manufacturer of mobile handsets in the People's Republic of China, today announced that, at a meeting of QXM's board of directors (the "Board") held on 31 December 2010, the Board authorized that a Scheme of Arrangement (the "Scheme"), proposed by QXM's parent company, Qiao Xing Universal Resources, Inc. ("XING"), pursuant to which XING would acquire all of the outstanding ordinary shares of QXM other than those shares held by XING (the "Minority Shares") in exchange for 1.9 shares of XING's common stock plus US$0.80 in cash for each Minority Share (the "Scheme Consideration"), be put forward by the Company to the holders of the Minority Shares (the "Minority Shareholders") for their consideration.

In connection with this authorization, the Board discussed, among other things, the following:

    --  The Board had previously appointed a special committee (the "Special
        Committee"), consisting of two independent directors to, among other
        things, (i) determine whether the Scheme is advisable and in the best
        interests of the Company and whether the Scheme is fair and equitable to
        the Minority Shareholders and (ii) recommend to the Board whether they
        should approve or reject the Scheme and recommend to the Directors what
        actions, if any, should be taken by the Company with respect to the
        Scheme, including whether the Directors should recommend approval of the
        Scheme by the Company's shareholders.


    --  The Special Committee retained an investment banking firm (the "IB
        Firm") to make a determination with respect to the fairness of the
        Scheme Consideration, from a financial point of view, to the Minority
        Shareholders.  The IB Firm has informed the Special Committee that it is
        not in a position to render to the Special Committee an opinion as to
        whether or not the Scheme Consideration to be received by Minority
        Shareholders pursuant to the Scheme is fair, from a financial point of
        view, to such Minority Shareholders and the Special Committee has not,
        to date, retained a replacement investment banking firm.  Because the
        Special Committee has not received a fairness opinion from a
        professional financial advisor with respect to the Scheme Consideration,
        the Special Committee has not made any determination with respect to
        whether the Scheme is advisable and in the best interests of the Company
        and/or fair and equitable to the Minority Shareholders.


    --  In light of the foregoing, the members of the Board (i) participated in
        the meeting for the sole purpose of determining whether the Scheme
        should be put forward by the Company to its Minority Shareholders for
        their consideration, and (ii) did not make any resolution in respect of
        the merits of the Scheme (including (without limitation) the Scheme
        Consideration), or make any recommendation to the Minority Shareholders
        as to whether they should vote for or against the Scheme. Each of the
        Independent Directors confirmed that they did not disapprove or approve
        of the Scheme.


    --  The Scheme has built into it a number of checks and balances, namely (i)
        it has to be approved by the requisite majorities of Minority
        Shareholders under that BVI Business Companies Act, 2004, as amended,
        being a majority in number representing not less than 75% in value of
        the Minority Shareholders who attend and vote at the meeting to sanction
        the Scheme; (ii) XING will not vote on the Scheme, so the approval
        represents the view of the Minority Shareholders only, and the Scheme
        cannot be forced upon them by XING; and (iii) the Scheme will still
        require the sanction of the High Court in the British Virgin Islands.


    --  A failure to allow the Scheme to be put before the Minority Shareholders
        for their consideration could be considered as detrimental to the
        Minority Shareholders and, in light of the checks and balances referred
        to above, it seemed appropriate for the Board to provide the Minority
        Shareholders with the opportunity to consider the Scheme.

About Qiao Xing Mobile Communication Co., Ltd.

Qiao Xing Mobile Communication Co., Ltd. is a domestic manufacturer of mobile handsets in China. The Company manufactures and sells mobile handsets based primarily on the GSM, TD-SCDMA, and WCDMA technologies. It operates its business primarily through CEC Telecom Co., Ltd., its 96.6%-owned subsidiary in China. Through its manufacturing facility in Huizhou, Guangdong Province, China, and two research and development centers in Huizhou and Beijing, the Company develops, produces and markets a wide range of mobile handsets. For more information, please visit http://www.qxmc.com.

Safe Harbor Statement

This announcement contains forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as "aim," "anticipate," "believe," "continue," "estimate," "expect," "intend," "is/are likely to," "may," "plan," "potential," "will" or other similar expressions. Statements that are not historical facts, including statements about QXM's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Information regarding these factors is included in our filings with the Securities and Exchange Commission. All information provided in this press release is as of January 6, 2011, and QXM undertakes no duty to update such information, except as required under applicable laws.



    For further information, contact:
    Lucy Wang, Vice President
    Qiao Xing Mobile Communication Co., Ltd.
    Tel: (8610) 57315638
    Email: wangjinglu@cectelecom.com

SOURCE Qiao Xing Mobile Communication Co., Ltd.