Cathay Merchant Group Announces Plan to Delist From the American Stock Commission

    HONG KONG, Nov. 29 /CNW/ -- Cathay Merchant Group Inc. (the "Company")
(Amex:   CMQ) announced today that it intends to voluntarily delist its common
shares from the American Stock Exchange ("AMEX").  The Company has provided
notice to AMEX and intends on filing a Form 25 with the Securities and
Exchange Commission (the "SEC") and AMEX on or about December 13, 2007 to
effect the delisting.  The delisting is expected to be effective 10 days after
this filing, which is anticipated to be on or about December 24, 2007. 
Subsequently, the Company intends to file a Form 15 with the SEC to terminate
the registration of its common stock under the Securities Exchange Act of
1934.  By filing the Form 15 with the SEC, the Company's reporting obligations
will be suspended with immediate effect and the Company expects the
deregistration to become effective 90 days after the filing unless the Form 15
is earlier withdrawn by the Company or denied by the SEC.  The Company
reserves the right to delay or withdraw the filings of the Form 25 and the
Form 15 for any reason prior to their effectiveness.  Upon the delisting from
AMEX becoming effective, the Company will be quoted on the Pink Sheets
quotation system.  The Company will continue to hold annual stockholders
meetings and intends to provide its stockholders with quarterly financial
information and annual audited financial statements.  It will also update its
stockholders with information through future mailings.
    As a result of the filing of the Form 15, the Company will not be
required to file certain reports and forms with the SEC, including Forms 10-K,
10-Q and 8-K.
    The Company considered several factors in making this decision, including
the following:

    -- the current and anticipated high costs associated with being a public
       company in the United States, including costs arising from compliance
       with the provisions of the Sarbanes-Oxley Act of 2002 ("SOX") and
       specifically compliance with Section 404 of SOX;
    -- the legal, accounting and administrative overhead and costs, both
       direct and indirect, of the evolving and increasingly burdensome U.S.
       reporting obligations;
    -- the nature and extent of the trading in the Company's stock on AMEX;
    -- the lack of analyst coverage;
    -- the market capital value that the public markets are applying to the
    -- the diversion of management's attention to compliance and reporting
       activities from the Company's operating business; and
    -- reduction of the potential liability for acts of directors and
       officers, especially in light of SOX.
    In addition to the significant time and cost savings resulting from
deregistration, this action will allow management to focus its attention and
resources on operating the Company and enhancing shareholder value.
    The Company believes that since the AMEX listing provided little benefit
with regard to increased liquidity, there is no reason to believe this may
change substantially with the intended delisting and deregistration.  Further,
any perceived risk with regard to future financing difficulties does not
represent an impediment to the Company.
    Michael J. Smith, Chief Executive Officer and President of the Company,
stated: "Our board has determined that the rising costs of compliance, as well
as the substantial demands on management time and resources necessitated by
the compliance requirements, outweigh the benefits the company receives from
maintaining its registered and listed status."
    In the longer term, the value of the Company's stock may increase due to
its accounting, legal and administrative savings both in terms of cost, time
and energy.
    The above decision arose out of careful consideration for shareholders.
The ultimate conclusion reached was that the financial and strategic burdens
of compliance with SEC regulations, including compliance with the provisions
of SOX substantially outweighed the benefits of maintaining its AMEX listing.
After consulting with an accounting and financial expert, as well as giving
consideration to current and expected regulatory requirements, it is estimated
that cost savings to the Company could range from $750,000 to $1.25 million
over the next year.
    The Company will now give consideration to distributing any such savings
realized to its shareholders by way of dividend, and looks forward to
rationalizing its existing asset base while looking for acquisitions.

    Contact information:  Michael J Smith
                          Suite 803, 8/Fl, Dina House
                          Ruttonjee Centre
                          11 Duddell Street
                          Central, Hong Kong SAR
                          Tel:  (852) 2537-3161
                          Fax:  (852) 2840-1260

                          Rene Randall
                          Tel: 1 (604) 408-8538
                          Fax: 1 (604) 683-3205

For further information:

For further information: Michael J Smith, +852 2537-3161, Fax, +852 
2840-1260,; or Rene Randall, 
+1-604-408-8538, Fax, +1-604-683-3205,, both for Cathay 
Merchant Group Inc.

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