(Hong Kong and Shantou, 27 May 2004) Lu Tong, Director of the Chinese Center for Corporate Governance under the Chinese Academy of Social Sciences (CASS), shared her views on the application of Independent Directorship for corporations in China with business and law students of Shantou University (STU) in Shantou yesterday. She pointed out the way forward for the implementation of the system in China, such as strengthening property rights, improving the legal system and enhancing the rights and obligations of the independent directors.

Ms Lu was the second invited speaker for the Shantou University Law School Corporate Governance Speaker Series. She spoke on the rationale, history and development of Independent Directorship for corporations as well as its applications in China.

This speaker series on corporate governance, sponsored by Citigroup and supported by the Li Ka Shing Foundation, is one of its kind coordinated by Ms Anna Wu, Advisor to the Law School of STU, to bring knowledge and appreciation of good practices to the students and to enrich their learning. In recent years, STU has successfully implemented a number of reform measures to create a more dynamic and student-centered learning environment.

Ms Lu said, "The Independent Directors System is an effective way to strengthen the internal check-and-balance mechanism for corporations in Britain and USA. It aims to prevent the controlling shareholders from abusing their status and committing acts unfavorable to the corporations and other shareholders. At the same time, the management of the corporations can be independently monitored."

Ms Lu explained that an Independent Director does not hold any posts apart from being a director in the corporation and that such a director has no direct or indirect interest in the corporation.

Ms Lu also said that the Independent Directors System has been put in place for almost a century, but it has only been institutionalized in the 70s. In the early 90s, the system has been adopted gradually in developed countries. In the late 90s and early 20th century, some of the developing countries, such as those in East Asia and Latin America, started to implement the system in listed companies. "The development of the Independent Directors System has showed that it has been a top-down process. The governments, legislative bodies and self-regulatory bodies stipulate the rules and regulations. They also monitor and implement the system," Lu Tong said.

Ms Lu concluded from case studies that there are impediments to the implementation of the Independent Directors System in listed companies in China. Ms Lu also recommended several approaches to improve the system, such as strengthening property rights, improving the legal system and enhancing the rights and obligations of the independent directors.

Apart from the speaker series, which will feature other prominent speakers in the months to come, Citigroup has provided 12 summer internship scholarships for placement and a visit program in Hong Kong for the STU Law School. Citigroup is also supporting the development of a training module on dispute resolution and negotiation skills at the Law School.

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About Shantou University

Shantou University is the only general university in the southeastern coastal city of Shantou in Mainland China, which boasts a population of 10 million. The university, with a total of 7,000 registered students, a medical college and five affiliated teaching hospitals, is a key project for the Li Ka Shing Foundation. The Law School is one of the university's major areas of academic development.

For more information, please visit STU website: www.stu.edu.cn

About Citigroup

Citigroup (NYSE: C), the preeminent global financial services company with some 200 million customer accounts in more than 100 countries, provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life and Annuity. The Citigroup Foundation primarily focuses its grant making in three areas: financial education, educating the next generation, and building communities and entrepreneurs.

Additional information may be found at: www.citigroup.com.