Chinese state-owned film company, Century Hero Film Investment, has signed a worldwide distribution pact with Hong Kong's Mandarin Resources, an electronics manufacturer that has no track record in film.

Under the terms of the deal, Mandarin's wholly-owned subsidiary, Eagle's Wing Limited, has been appointed sole distributor of Century Hero product in all territories outside the Peoples' Republic of China for five years.

The deal raised eyebrows as Mandarin manufactures and sells electrical equipment and has no experience of the entertainment industry.

Mandarin is currently listed, but had its shares suspended for 14 years until November 2000, because of a legal battle between Hong Kong's Securities and Futures Commission and former owner Chim Pui-chung.

Century Hero is 90%-owned by CITIC Cultural, the film and entertainment arm of China International Trust and Investment Corporation (CITIC). CITIC was formed by the Chinese government in 1979 to encourage foreign investment in various industry sectors. Its interests span energy, car manufacturing and real estate, as well as investments in satellite and cable TV.

According to Hong Kong newspaper, South China Morning Post, Century Hero chose Mandarin as distributor because current controlling shareholder, Edward Chen, has strong ties to the entertainment industry. Chen is the father of Canto-pop singer Edison Chan.

Century Hero reportedly plans to produce about 10 Chinese-language films and 500 television programmes a year with a total investment of $18.1m (150m yuan).