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Further to the announcement made on the 29 August 2000 in relation to the above Proposals, on behalf of the Board of Directors of KKB, Arab-Malaysian Merchant Bank Berhad ("AMMB") is pleased to announce that the Securities Commission ("SC") has approved the Proposed Rights Issue as proposed, and the Proposed Amendment.

In respect of the Proposed Bonus Issue, which is proposed to be capitalised from the share premium account, revaluation reserve and unappropriated profits of the Company, the SC has approved the valuation of the landed properties of the Group at RM23,658,000, as opposed to RM24,521,000 which have been incorporated in the books of the Company.

Arising therefrom, the Company is expected to reduce its capitalisation from the revaluation reserve of the Company. The Board of Directors of KKB is now proposing to capitalise the Proposed Bonus Issue of up to 24,951,000 new ordinary shares of RM1.00 each in the Company on the basis of three (3) new ordinary shares for every two (2) existing ordinary shares held in the Company from the following reserves of the Company as set out in Table 1.

The SC’s approval for the Proposed Rights Issue is, inter-alia, subject to the following conditions:-

(i) Should the discount to the price-fixing of the rights issue exceed 30% from the theoretical ex-all price, the promoters and directors of KKB are to give their respective written undertaking to the SC that they will not dispose of their shareholdings (including their shares under the Proposed Bonus Issue) from the aforementioned ex-date to the tenth(10th) market day after the listing of the aforementioned shares;

(ii) Approval of the shareholders of KKB must be obtained for any changes amounting to 25% or more towards the original utilisation of the said proceeds. Should the changes that is proposed to be implemented is less than 25%, an appropriate disclosure must be made to the shareholders of KKB;

(iii) SC’s approval must be obtained for any changes towards the utilisation of the proceeds from the rights issue should the said changes involve any other utilisation except for the core business of KKB; and

(iv) Any extension from the period determined by KKB for the utilisation of the proceeds from the rights issue must be approved by way of ordinary resolution by the Board of Directors of KKB and full disclosure must be made to the KLSE.

The terms of the revised capitalisation for the Proposed Bonus Issue will be submitted to the SC shortly. The Proposals are also conditional upon obtaining the shareholders approval at an Extraordinary General Meeting to be convened.

The issue price for the Proposed Rights Issue will be determined by the Board of Directors of KKB in due course.

This announcement is dated 5 January 2001.
TABLE 1

	Assuming no exercise of 1,085,000 additional options pursuant to the ESOS	Assuming 1,085,000 additional options pursuant to the ESOS are fully exercised
	RM	RM
Share Premium	946,837	2,574,337
Revaluation Reserve	5,034,633	5,034,633
Unappropriated Profits	17,342,030	17,342,030
	23,323,500	24,951,000