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ARTICLE ENTITLED: MIDF URGES EON TO REVISE 32 SEN PER SHARE EX-GRATIA PAYMENT

With reference to the captioned article which appeared in The Edge Online on 26 September 2000, Malaysian Industrial Development Finance Berhad (MIDF) would like to clarify that it has NOT asked Edaran Otomobil Nasional Berhad (EON Berhad) to consider putting forward a better offer than the ex-gratia payment of 32 sen per share to the minority shareholders of Oriental Bank Berhad (OBB). All matters relating to the disposal of OBB have been dealt with between MIDF and EON Bank, and not EON Bhd.

The 32 sen offer made by EON Bank (not EON Berhad as mentioned in the article) was arrived at after a financial due diligence review by EON Bank’s advisers, Messrs. KPMG, and an independent evaluation of net tangible assets carried out by MIDF’s advisers, Messrs. Ernst & Young. Based on these exercises and after several rounds of negotiations, the 2 parties, namely MIDF and EON Bank, agreed that the ex-gratia payment, to be made only to minority shareholders and not MIDF, should be 32 sen per share. The requisite approval of the Minister of Finance to this ex-gratia payment has been obtained.

MIDF will not receive any payment for its 278,388,710 shares in OBB. EON Bank has only agreed to repay MIDF the RM130 million in subordinated loan extended by MIDF to OBB.

Regarding the statement that Dato’ Darwis said that “MIDF has made a verbal request to EON to look into ways in resolving the situation” he meant that notwithstanding the agreed position in respect to the ex-gratia payment to be made to the minority shareholders there had been several appeals from these shareholders to MIDF to improve the quantum of the ex-gratia payment. MIDF in turn verbally passed on the appeals to EON Bank for their consideration.

Dato’ Darwis expressed sympathy for the minority shareholders, especially the employee shareholders and also expressed hope that EON Bank, notwithstanding that the agreement was already reached, would consider some means to further alleviate the plight of the minority shareholders.

The article appearing on “The Edge” web-site on Tuesday, 26 September 2000 should be read in the context of the foregoing.

c.c. Encik Wong Wing Seong,
Director
Issues and Investment Division
Securities Commission

Query Letter Contents :

We refer to the above article appearing in The Edge Online, on 26 September
2000, a copy of which is enclosed for your reference.
In particular, we would like to draw your attention to the underlined sentence,
which is reproduced as follows:-
"Malaysian Industrial Development Finance Bhd (MIDF) has asked Edaran Otomobil
Nasional Berhad (EON Bhd) to consider putting forward a better offer than the
ex-gratia payment of 32 sen per share to the minority shareholders of Oriental
Bank Bhd."

In accordance with the Exchange's Corporate Disclosure Policy, you are
requested to furnish the Exchange with an announcement for public release
confirming or denying the above reported article and in particular the
underlined sentence after due and diligent enquiry with all the directors,
substantial shareholders and all such other persons reasonably familiar with
the matters about which the disclosure is to be made in this respect. In the
event you deny the above sentence or any other part of the above reported
article, you are required to set forth facts sufficient to clarify any
misleading aspects of the same. In the event you confirm the above sentence or
any other part of the above reported article, you are required to set forth
facts sufficient to support the same.
Please furnish the Exchange with your reply within one (1) market day from the
date hereof.

Yours faithfully


Chong Fui Tzy
Manager, Listing Operations
ASL/TPL
c.c. Securities Commission (via fax)