CDC Corporation to Amend Form 20-F Annual Report for 2006 to Correct Segment Footnote Disclosure

Friday March 21 12:30 AM

On March 17, 2008, management and the audit committee of the board of directors of the Company concluded that the financial statement footnote disclosure of segment net income (loss) for fiscal year ended December 31, 2006, contained in Footnote 27 of Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 20-F for the year ended December 31, 2006, contained two accounting errors related to the allocation of expenses among the Company's business segments. First, an aggregate of approximately $6.3 million of purchased intangibles amortization expense related to certain acquisitions was improperly allocated to the Software and Business Services segments. Purchased intangible amortization should have been included in the measurement of Corporate segment net income (loss). Second, an inter-company consolidation adjustment within the Mobile Services and Applications segment of approximately $8.5 million was improperly allocated to the Corporate segment. The net effect of the adjustments made to correct these errors is as follows (in thousands):

(in thousands)                         As
                                    Previously
                                    Disclosed  As Restated Difference
                                   -----------------------------------
                                      Year ended December 31, 2006
                                   -----------------------------------
Segment net income (loss):
  Software                          $  11,878   $  16,811   $   4,933
  Business Services                     2,565       3,887       1,322
  Mobile Services and Applications      6,152      (2,367)     (8,519)
  Internet and Media                      528         528           -
  CDC Games                            12,160      12,160           -
                                   ----------- ----------- -----------

                                       33,283      31,019      (2,264)
  Corporate and other unallocated
   amounts                            (22,443)    (20,179)      2,264
                                   ----------- ----------- -----------

Total consolidated net (loss)
 income                             $  10,840   $  10,840   $       -
                                   =========== =========== ===========

The audit committee of the Company's Board of Directors has discussed these errors with the Company's independent registered public accounting firm, Deloitte and Touche LLP. Until the Company files its amended Annual Report on Form 20-F for the year ended December 31, 2006, the consolidated financial statements and footnotes thereto for the year ended December 31, 2006, should not be relied upon.

About CDC Corporation

The CDC family of companies includes CDC Software focused on enterprise software applications and services, CDC Games focused on online games, and China.com focused on portals for the greater China markets. For more information about CDC Corporation (NASDAQ:CHINA), please visit www.cdccorporation.net.

Cautionary Note Regarding Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding particular information in previously issued financial statements which require restatement, the size of such adjustments, line items for which the Company does not believe require restatement, whether additional line items require restatement, whether a material weakness exists in the Company's internal controls, the actions the Company intends to take to improve its internal controls and effectiveness of such actions, and other statements that are not historical fact, the achievement of which involve risks, uncertainties and assumptions. These statements are based on management's current expectations and are subject to risks and uncertainties and changes in circumstances. There are important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, including the following: the completion of the internal review by management, the review by the Company's Audit Committee and Board of Directors, the review of the Company's independent registered public accounting firms. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. Further information on risks or other factors that could cause results to differ is detailed in filings or submissions with the United States Securities and Exchange Commission made by CDC Corporation in its Annual Report for the year ended December 31, 2006 on Form 20-F filed on July 2, 2007, as such may be amended from time to time. All forward-looking statements included in this press release are based upon information available to management as of the date of the press release, and you are cautioned not to place undue reliance on any forward looking statements which speak only as of the date of this press release. The company assumes no obligation to update or alter the forward looking statements whether as a result of new information, future events or otherwise.

Contact:

CDC Corporation
Investor Relations:
Monish Bahl, 678-259-8510
monishbahl@cdcsoftware.com
or
Media Relations:
Articulate Communications Inc.
Kate Corcoran, 212-255-0080, ext. 18
kcorcoran@articulatepr.com

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