Goldman Sachs Announces Joint Venture in China

BEIJING, CHINA, December 2, 2004 -- The Goldman Sachs Group, Inc. (NYSE: GS) announced today that it has received approval from the China Securities Regulatory Commission to establish a joint venture investment banking firm in China.

Through the new entity, Goldman Sachs will, for the first time, be able to offer a wide range of investment banking services to domestic mainland China clients.

The new joint venture will be in partnership with a recently established domestic securities firm, Beijing Gao Hua Securities Company Limited. Goldman Sachs will own 33 per cent of the joint venture, while Beijing Gao Hua Securities will hold the remaining 67 per cent. The joint venture will be called Goldman Sachs Gao Hua Securities Company Limited.

Beijing Gao Hua Securities Company Limited has a comprehensive domestic securities license allowing it to conduct, among other things, broking and trading in ‘A’ shares and ‘A’ share convertible bonds. The firm was established by a group of investors led by experienced China banker Mr Fang Fenglei and Legend Holdings, one of China’s leading conglomerates. Mr Fang has previously held the positions of Deputy CEO of China International Capital Corporation Limited (CICC), CEO of BOC International Holdings Limited and CEO of ICEA Financial Holdings Limited.

Once established, Goldman Sachs Gao Hua is expected to underwrite locally listed ‘A’ share transactions and RMB-denominated corporate bonds and convertible bonds, as well as offer domestic financial advisory and other services.

Commenting on the announcement, Mr Henry M. Paulson Jr., Chairman and Chief Executive Officer of Goldman Sachs, said: "China has, for many years, been of great strategic importance to our firm. With this ground breaking joint venture, we are entering into an exciting new chapter for Goldman Sachs in China. Together with our partners, we are looking forward to building the leading investment bank in this market.”

Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest global investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.

Legend Holdings Limited is the parent company of two Hong Kong listed subsidiaries, Lenovo Group Limited (previously Legend Group Ltd) and Digital China Holdings Limited. Lenovo Group Ltd is the largest IT company in the PRC, its Lenovo brand PC has been the country’s best-selling PC since 1996 and had a market share of about 27% in 2003 according to International Data Corporation. Lenovo is also the number one PC brand in the Asia Pacific market (excluding Japan) with a market share of 12.6%. Lenovo Group was listed on the Hong Kong Stock Exchange in 1994 and is a constituent stock of the Hang Seng Index. Its American Depositary Receipts are also traded in the United States. Digital China Holdings Ltd is the largest IT products distributor as well as a leading IT service provider in China. Legend Holdings also engages in venture capital and real estate development.

Media Contact: Tel: 852- 2978 0218