directors - The Lion Group

(c) On 23 November 2004, the Company announced the following proposals:
(i) proposed variation to the redemption date of certain zero-coupon redeemable secured RM
denominated bonds (“LICB Bonds”) and repayment date of certain zero-coupon redeemable secured
USD consolidated and rescheduled debts (“USD Debts”) which were due for redemption and
repayment on 31 December 2004 to 31 March 2005.
(ii) proposed variation to the calculation for penalty interest.
The Company proposed that commencing 1 January 2005, interest payable as penalty for late
redemption/repayment of any redemption amount/repayment amount shall be calculated on a simple
interest basis instead of on a compound basis.
The approvals for the aforementioned proposals from the relevant authorities (including the Securities
Commission and Bank Negara Malaysia) and the LICB Bond holders and USD Debt holders were obtained
as of 30 December 2004.
(d) On 13 December 2004, Lion Forest Industries Berhad (“LFIB”), an 80% owned subsidiary company of the
Company announced that Lion Rubber Industries Sdn Bhd (“Lion Rubber”), a wholly-owned subsidiary
company of LFIB, entered into an agreement with Shandong LuHe Group Co Ltd to incorporate a company,
Shandong Silverstone LuHe Rubber & Tyre Co Ltd (“Shandong Silverstone”) in the province of Shandong,
the People’s Republic of China (“PRC”), for the purpose of operating a tyre business in the PRC, with an
equity ratio of 75:25.
Lion Rubber contributes its share of USD30.0 million (equivalent to approximately RM114.0 million) for
the 75% equity interest by way of cash injection of USD26.0 million (equivalent to approximately RM98.8
million) and the balance of USD4.0 million (equivalent to approximately RM15.2 million) by way of the
provision of technical know-how in relation to tyre manufacturing and the use of the “Silverstone” brand
name.
Shandong Silverstone has not commenced commercial production as of 30 June 2005. However, trial-run
production has commenced since May 2005.
(e) On 31 January 2005, LFIB announced that LFIB and Quay Class Ltd (“QCL”), a wholly-owned subsidiary
company of LFIB, entered into a conditional sale and purchase of shares agreement with Silverstone
Corporation Berhad (“SCB”) to acquire the entire issued and paid-up share capital of Silverstone Berhad
(“SB”) comprising 203,877,500 ordinary shares of RM1.00 each including QCL assuming the net intercompany
liabilities due by SCB, its subsidiary and associated companies to SB for a purchase consideration
of RM225,000,000 to be satisfied by the issue and allotment of 26,500,000 new ordinary shares of RM1.00
each in LFIB at an issue price of RM2.74 each and the balance of RM152,390,000 in deferred cash payments
(“Proposed Acquisition”).
The Securities Commission (“SC”) had on 16 September 2005 advised LFIB that the SC was unable to
consider LFIB’s application for the Proposed Acquisition in view that SCB’s application in respect of its
proposed disposal of SB was not approved by the SC. LFIB and SCB are currently considering the SC’s
decision and their next course of action.
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