UNITED PACIFIC<0176> - Announcement

The  Stock  Exchange of Hong Kong Limited takes no responsibility for
the  contents of this announcement, makes no representation as to its
accuracy  or  completeness  and  expressly disclaims any liability
whatsoever  for  any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this announcement.

United Pacific Industries Limited
(Incorporated in Bermuda with limited liability)
ANNOUNCEMENT

The  board of UPI announces that the possible major and connected
transaction  (`Transaction')  referred to in the announcement of the
1998/1999  final  results  of the Group (as defined below) dated 24
August  1999 (`Announcement') will not proceed now and certain changes
in  the management of UPI. The possible special dividend as previously
mentioned in the Announcement will, therefore, not occur.       

1.
Possible major and connected transaction
The  board  of  directors  (`Board')  of United Pacific Industries
Limited  (`UPI')  announces  that the Transaction referred to in the
Announcement  will  not  proceed as the parties have been unable to
agree  on  various  principal terms and conditions resulting in the
potential  purchaser  withdrawing  from the Transaction. In light of
this  state of affairs, the possible special dividend to shareholders
of  UPI  as previously mentioned in the Announcement will, therefore,
not occur.

2.
Management Appointments
The  Board  also announces that (i) Mr. HO Che Kong, who will retain
his  position  as chairman of the Board, has been appointed the group
managing  director of UPI, with effect from 1 November 1999; and (ii)
Mr.  George  Y.  L.  CHAN, the chief financial officer of UPI, will
assume  with immediate effect the office of acting chief executive of
Hong  Kong  Toy  Centre International Limited, an approximately 72%
owned subsidiary of UPI.

3.
Resignation
The  Board  has  accepted the resignation of Mr. Simon N. HSU, whose
resignation  as  group  managing director of UPI and from all other
positions  in  UPI,  its  respective  subsidiaries and associated
companies  (`Group'),  will take effect from 1 November 1999. Mr. Hsu
will  remain as a non-executive director of UPI. The Board would like
to  express their thanks to Mr. Hsu for his services and contribution
to  the  Group  especially  during  the difficult times which have
affected  the  Group  in  the preceding fiscal year ended 31 March
1999.

4.
Way Forward
The  Board  wishes  to state that the fact that the Transaction will
not  materialise  will  not  affect UPI's financial position as UPI
remains  solvent  and has sufficient cash reserves to repay all bank
debt.  The  Board would also like to express that, although the past
fiscal  year  had been a difficult one for the Group, as reflected in
its  recently  published results for the year ended 31 March 1999, it
is  confident  that  the  operating environment for the Group will
continue  to improve, which will strengthen the trading activities of
the  Group's  core  businesses.  The  Board expects that, barring
unforeseen  circumstances,  the  Group (except Hong Kong Toy Centre
International  Limited  and  Climax  International Company Limited)
should  have very little or no bank borrowings by 31 March 2000 and be
profitable  at  the  operating level. The Board and its chairman are
determined  to  pursue  all opportunities, including investment and
disposal  opportunities, as and when they arise in the future, with a
view to enhancing shareholder value.

                               By Order of the Board  
                               Ho Che Kong                          
                               Chairman                      
                                                             
Hong Kong SAR, 2nd September 1999