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Irresponsible: KLSE Urges A Stop To Irresponsible And Inaccurate Reporting

Date 03/09/2002

Kuala Lumpur Stock Exchange (KLSE) would like to urge Business Times to stop publishing irresponsible and inaccurate reports relating to its demutualisation and listing.

KLSE has expressed its concerned in its media release dated September 2002 titled 'Irresponsible and Inaccurate Report on KLSE' on the manner in which Business Times published a report based on a private and confidential document which was not authorised for external circulation. KLSE has also stated in the media release that given the stage at which the proposed demutualisation of KLSE is currently at, any conjecture in respect of its governance structure is highly speculative and premature.

Despite KLSE's statement, Business Times continued to publish yet another irresponsible and inaccurate report titled 'KLSE move to list shares faces hurdle' today.

Given the various inaccuracies contain in the Business Times report published today, KLSE would like to state the following:

KLSE's existing management i.e. KLSE Committee, is represented by a majority of 5 stockbroking members from total 9 committee members. The needs and views of the stockbroking community have been considered through their representation on the KLSE Committee.

As for the demutualisation exercise, KLSE has conducted extensive consultation process with various market participants, especially with the stockbroking members, throughout the exercise and will continue to do so until the proposal is being implemented.

The proposal for demutualisation and listing of the exchange is still being discussed and deliberated and has not been finalised. It has not been presented and approved or endorsed by the authorities.

Demutualisation will involve the conversion of the stock exchange from mutual entity limited by the guaranteee of its stockbroking members into a company with shares and shareholders. The key objective of demutualisation is to broaden the interests of the exchange to better represent the needs of various stakeholders.

Any shareholder, including brokers, will have their rights as a shareholder preserved. Shareholders of a company are free to trade or sell off their shares. The stockbroking members will continue to have trading rights to deal in securities listed on the exchange after demutualisation irrespective of whether they hold any shares in the demutualised exchange.

KLSE would also like to stress that corporate governance practices, transparency and public interest policy issues are imperative and shall form essential elements in the framework for demutualisation, listing of the exchange and to ensure investors' confidence. If listed, KLSE would also be subjected to rules and regulations which are aimed towards upholding good governance practices and establish the framework for public interest policy, whilst adopting international best practices where relevant.

KLSE would like to reiterate that given the stage at which the proposed demutualisation of KLSE is currently at, any conjecture in respect of the proposed demutualisation and listing are highly speculative and premature. As is widely known, all companies listed on KLSE are governed by its Listing Requirements. KLSE will be subjected to the same Listing Requirements once it is listed on the exchange.