Shuaa Capital clarifies issue of Article 285 of UAE Companies Law

The same matter was brought to the attention of shareholders during the Annual General Assembly held on 29 March 2009, was noted and the shareholders unanimously approved a motion to continue with the company.

However, the regulator has requested that the Board of Directors present this matter again for consideration at the upcoming EGM in accordance with UAE legal provisions.

At the annual general meeting of shareholders held on 29 March 2009, the shareholders of the Company approved the audited accounts of the Company showing a loss of Dhs948.5m for the financial year ended 31 December 2008, which amounts to more than half of the current historical legal capital of the Company of Dhs550m.

Shuaa Capital, however, continues to have a shareholders' equity base of Dhs2,300m, after the reported book losses that were primarily the result of mark-to-market reductions of asset valuations. The total equity base of Dhs2.3bn is more than sufficient to allow the firm to continue as an ongoing concern and operate all its business units in the future.

Shuaa Capital's shareholders will also be asked at the upcoming meeting to approve the amendment of the Articles of Association of the Company in accordance with corporate governance regulations promulgated by the Securities and Commodities Authority, and to empower the Board of Directors of the Company to renegotiate and amend the terms of the Company's outstanding mandatory convertible notes.