Morning News

 Liberty Media macht dem Kartellamt keine Zugeständnisse für den Einstieg in den TV-Kabelmarkt (Reuters)
Automobile:
 DCX will bis zu 15 Mrd $ Anleihen emittieren (Asset-backed-securities).
Chemicals:
 Altana ist auch für 2002 zuversichtlich, will im Umsatz und Ertrag 2-stellig wachsen. (HB)
 BASF klagt gegen den Bußgeldbescheid (296 Mio E) der EU-Kommission.
Utilities:
 Norsk Hydro will von E.ON die VAW-Tochter für 2,5-3 Mrd E übernehmen (HB)
Consumption:
 Wünsche beantragt die Eröffnung eines Insolvenzverfahrens. (FTD)


Neuer Markt:
 Intershop geht im lfd. Q von geringer als erwarteten Kosten aus, hat für 2002 aber einen geringeren Umsatz als 2001 (70 Mio E) prognostiziert. Für das 4Q wird nun mit einem deutlichen Rückgang des Nettoverlustes gerechnet. Es stehen noch 36-37 Mio E an liquiden Mitteln zur Verfügung.
 Edel Music verkauft weitere Tochterfirma Eagle Rock (68%) an das Management=Berwertung ca. 41 Mio E.
 M+S Elektronik meldet Insolvenz an.
 Brainpool verläßt den Neuen Mart zum 11.1.2002.

devoted the last 10 years of my life to serve. I have
grown to love Hartcourt and its people: the
shareholders, the employees, the clients... It¡¯s hard
to leave home.

My job is essentially completed. If you don¡¯t focus
on the rise and fall of HRCT share price, you can see
that Hartcourt operations have experienced a steady
growth pattern and our business plan has been carried
out successfully over the last 2 years. We started out
with nothing in March 1999 to build an Internet
conglomerate in Greater China. Today, we own the
majority shares of 12 operating companies and
investments in 3 portfolio companies. These companies
have solid assets, revenue and good market positioning
in the fastest growing market in the world. They have
22 major strategic partners who are the well-known
leaders of their industry in global markets. Of
course, we have had delays and mistakes and problems,
but the end result speaks for itself.

There is nothing to apologize for, except one thing:
the current share price. I wish that the bull market
is still with us, the recession is not yet a reality,
the terrorist attacks did not happen¡­but we take what
God gives us, and hopefully, this difficult
environment will teach us more about the value of
patience and long-term investment perspective. We will
complete the spin-off of all Hartcourt assets by Q1 of
2002 (except for the E-Education), and I strongly
believe that in the long run, this move will help HRCT
share price tremendously.

I have donated to Hartcourt 5 Million of my own
shares. It will help Hartcourt to record an
extraordinary gain in Q4 or Q1. The rest of my shares
(about 4 Million) will be donated to a number of
charities. The shares will have a lock-up period
between 12 months and 36 months. In that way, there
will be no adverse effect on HRCT share price in the
future. I have told many of you that money is not my
motivation. I will walk away from Hartcourt with a
unique pride that I am one of those rare CEO¡¯s who
have benefited NOTHING from the company I founded.

I love and believe in Hartcourt with all my heart.
However, there are more to life than Hartcourt and my
workload. I have neglected other important matters of
my existence: my physical being, my mental and
spiritual self and my intellectual pursuit. It¡¯s time
for me to spend my energy on self-development; as I am
getting older, I cannot afford to overlook these life
priorities.

I will leave Hartcourt with a heavy heart. There are
too many friends and associates who have made my
Hartcourt journey a memorable one. Please do keep in
touch, as I plan to travel all over the US some time
next year. From Tennessee, Colorado, Florida to New
York, Seattle, Arizona¡­I will come and have a beer,
or play tennis, with you all. You are the most
inspiring group of shareholders and friends that any
CEO would die for.

I will leave you with the following wisdom from Henry
Drummond,¡± You will find as you look back upon your
life that the moments when you have really lived, are
the moments when you have done things in a spirit of
love¡­ Work joyfully and peacefully, knowing that the
right thoughts and right efforts will inevitably bring
about right results.¡±

With all my heart, as always,

Sincerely,

Dr. Alan V. Phan
Chairman



=====
Dr. Alan V. Phan, Chairman
The Hartcourt Companies, Inc.
19222 Pioneer Blvd. Suite 100
Cerritos, CA. 90703 USA
Tel: 562 653 0400 Ext 209
Fax: 562 653 0900
Web: www.hartcourt.com