Asia Electronics Holding Co. Inc. Announces Liquidation.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 10, 2001

Asia Electronics Holding Co., Inc. or the "company" (OTCBB: AEHCF), following approval by its board of directors, announced that the shareholders had approved the liquidation of the company pursuant to a plan of dissolution at a special meeting of shareholders held at Treasure Isle Hotel, Road Town, Tortola, British Virgin Islands on September 10, 2001. The company will file articles of dissolution and the plan of dissolution on September 10, 2001. The company expects to begin making liquidating distributions to its shareholders as soon as practicable thereafter.

The company's board of directors had previously approved resolutions proposing the liquidation and setting the record date as of July 26, 2001. The company then circulated a proxy statement describing the company, current developments and the board's reasons for the proposed liquidation to the shareholders on or about August 6, 2001. Due to recent developments including, but not limited to, the refusal by the company's Chinese joint venture partner to comply with the company's joint venture agreements to provide financial and accounting information on the company's Chinese joint ventures, and the failure by the company to obtain sufficient support from national, provincial and local governmental authorities including courts within China and other diplomatic efforts, the board believed that, after carefully reviewing the company's strategic alternatives, liquidation and dissolution of the company was in the best interests of the shareholders and the most likely way to preserve shareholder value. At the special meeting of shareholders held on September 10, 2001, the shareholders approved the liquidation pursuant to the plan of dissolution. The principal purpose of the plan of dissolution is to preserve shareholder value by liquidating the company's assets and distributing the net proceeds of the liquidation to the company's shareholders.

Lee M. Jacob, Chairman of the company, stated: "Our board of directors believed that, after carefully reviewing the company's strategic alternatives, liquidation and dissolution is in the best interests of our shareholders and the most likely way to preserve shareholder value."

Private Securities Litigation Reform Act Safe Harbor Statement

Certain statements above constitute forward-looking statements with respect to Asia Electronics Holding Co. Inc. or the "company". Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors may affect the company's operations, markets, products, services and prices. Such factors include, among others, the following: risks relating to the economy of China, dependence on major customers, key personnel, control by officers, dependence on affiliates, potential conflicts of interests, competition, obsolescence, absence of intellectual property protection, holding company structure, difficulty of effecting service of legal process and enforcement of judgments, political and economic risks from international operations and other risks detailed in the company's filing with the Securities and Exchange Commission.