Scheme of Arrangement Pursuant to Section 176 of the Companies Act 1965 between Korakyat Plantations Sdn Bhd (In Liquidation) and the Purchasers for the Rehabilitation of Taman Perindustrian Subang Mewah.

Korakyat Plantations Sdn Bhd (In Liquidation)

Official Press Release

25 July 2003

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Scheme of Arrangement

between Korakyat Plantations Sdn Bhd (In Liquidation) and the Purchasers Pursuant To Section

176 of the Companies Act 1965

The Kuala Lumpur High Court (Commercial Division) has on 3 July 2003, sanctioned the Proposed Scheme of Arrangement between Korakyat Plantations Sdn Bhd (In Liquidation) and the Purchasers of Taman Perindustrian Subang Mewah pursuant to Section 176 of the Companies Act 1965. The Scheme of Arrangement was devised by the Liquidators of Korakyat Plantations Sdn Bhd to rehabilitate the Company’s abandoned property development project known as Taman Perindustrian Subang Mewah, located at USJ 1, Subang Jaya, Selangor Darul Ehsan.

The sanction, which has a binding effect on all parties involved, who are essentially purchasers of Taman Perindustrian Subang Mewah, was given on an application made by the Liquidators following an overwhelming support by 96% of purchasers present and voting at a Court Convened Meeting held on 20 December 2002.

Considered as a purchasers’ self-help rehabilitation scheme, the Scheme of Arrangement envisages purchasers funding the completion of the project by making an additional payment equivalent to 20% of the purchase price and settlement of all outstanding progressive billings. The fund would be maintained in trust by the Liquidators for settlement of costs involved in rehabilitating the project and discharging an encumbrance over the land, presently held by the project’s original bridging financier.

Apart from resolving the financial problem faced by the project which has been abandoned since 1998, the Scheme of Arrangement resolves the highly complicated legal aspect of the problem caused by security rights claimed by various financiers over the same piece of land, which is a common problem faced by many abandoned property development project.

The Liquidators view the Scheme of Arrangement as a proactive and constructive approach in the Company’s winding-up and would be the most efficient and fair way of addressing the position of creditors, in particular the purchasers, who would otherwise be limited to negligible or nil distribution in view of their unsecured position.

The Scheme of Arrangement was also devised to meet wider social objectives in reviving such abandoned projects facing various social and commercial complications, which in turn would bring benefit to all interested parties, whether directly or indirectly.

The Liquidators have been working closely with the authorities in the spirit of “Malaysia Incorporated”, a pragmatic policy introduced by the government to develop the country to achieve the aspirations of Vision 2020. The Liquidators anticipate the success of the Scheme of Arrangement would pave the way and become a model for rehabilitation of other abandoned property development projects in the country, which normally face similar financial, legal and commercial complications.

Taman Perindustrian Subang Mewah is an industrial property development project, consisting of 478 single-storey, one and a-half-storey and double-storey terrace and single-storey semi-detached factory units with prices ranging from RM160,000 to RM600,000 per unit, with total original sales value of about RM146 million.

The Liquidators congratulate the Taman Perindustrian Subang Mewah Pro-Tem Working Committee, especially its Chairman, Tuan Haji Rathi B. Haji Ishak on the sanction for the valuable inputs from the point of view of purchasers given to the Liquidators. With the sanction, purchasers should now make the relevant arrangements, including liaising with their respective financiers, if necessary, to make the required payments.

The Liquidators express appreciation to all financial institutions involved in the project for their commitment and support, without which, the Scheme of Arrangement may not have come to this stage.

The Liquidators also thank Yang Berhormat Datuk Lee Hwa Beng, the State Assemblyman of Subang Jaya Constituency for his views and support, which has given the Liquidators the confidence and energy to persevere since the conceptual stage of the Scheme of Arrangement.

The Liquidators – Dr. Ler Cheng Chye and Mr. Lum Tuck Cheong of Messrs Ler Lum & Co. were appointed by Court as the Liquidators on 10 May 2000.

Affiliated worldwide with Jeffreys Henry International, an association of independent firms of business advisors, Ler Lum & Co. is a firm of Chartered Accountants providing a complete range of professional services in the areas of audit and business advisory, corporate recovery and taxation. Ler Lum & Co. is determined to play a positive role in revival of the country’s economy since the last economic crisis, focussing in turnaround through legal, commercial and financial remodelling of abandoned property development projects into viable and competitive projects in current economic environment.

A briefing for the benefit of purchasers and end-financiers on the implementation of the Scheme of Arrangement and the project rehabilitation shall be given on 1 August 2003at 3.00 p.m.at Kompleks 3K Subang Jaya, Jalan SS 13/1, Persiaran Kewajipan, 47500Subang Jaya, Selangor Darul Ehsan.

Taman Perindustrian Subang Mewah is a pioneer benchmark project for a number of projects that is presently under the firm’s care. Details of the Scheme of Arrangement can be obtained from the firm’s office or its website, www.lerlum-hlb.com.

Queries may be directed to:

Ms. SharonLeng/Ms. Adelaine Amir/Ms. Yap Sok Yi
Messrs Ler Lum & Co.
B-3-11, Megan AvenueII
12, Jalan Yap Kwan Seng
50450 Kuala Lumpur.
Tel: 03 2715 1555 Fax: 03 2163 4609

Corporate Recovery Services

Korakyat Plantations Sdn Bhd (In Liquidation)