Valyut-Transit-Bank JSC (Kazakhstan) intends to dispute the decision of AFS about license withdrawal in arbitrage of Kazakhstan - press release

/KASE, December 28, 06/ - Valyut-Transit-Bank JSC (Karaganda), shares and bonds of which have been included in Kazakhstan stock exchange's official "B" listing category, today spread a press release of the following content: Quotation start STATEMENT OF SHAREHOLDERS OF VALYUT-TRANSIT-BANK JSC As it is known, on December 26, 2006 the Agency of the Republic of Kazakhstan for regulation and supervision of the financial market and financial organizations (Agency) adopted a decision about withdrawal of license for conducting banking and other transactions, executed in the national and a foreign currency. The reason for adopting this decision is that the Bank executed banking transactions with systematical breaches of requirements of the Laws of the Republic of Kazakhstan "About banks and banking activity of the Republic of Kazakhstan, "About payments and money transfers". Thereupon, Bank's shareholders state the following: 1. Systematical breaches in the activity of Valyut-Transit-Banks JSC were revealed by the Agency as early as in October 2006, right up to coming of new shareholders and the top management to the Bank. 2. The decision about Coming of new shareholders and the top management was adopted at direct participation of the Agency with the object to help the Bank out of liquidity crisis, in which it occurred due to inadequate strategy of the former leadership with Mr. Belyalov at the head. 3. Since October 2006 up to now the new leadership took several actions on stabilization of Bank's financial condition and execution of its obligations to creditors, in particular: - A special program on timely payments to individual people - Bank's depositors - was worked out and offered to the Agency for coordination. Moreover, by means of funds, earned from sale of the new office center in Astana, payment of liabilities was made for a total of more than KZT2.5 bn. - Agreements about mutual understanding and restructuring of debts with Bank's creditors for a total of KZT12 bn. were signed. According to the signed agreement, Banks and insurance companies - Bank's creditors - commit not to abrogate agreements of bank deposits, earlier concluded with a Debtor, till 2008, and pension funds - for maximally permitting term, which is provided by "Rules of executing activity on investment management of pension assets", approved by the Resolution of the Board of AFS of RK date November 26, 05 ¦ 408. - Return in the ownership of the Bank of assets, illegally taken out by former shareholders, for a total of USD400 m. and sale of non-profile assets (pension fund, pawn business and etc) have been initiated. - At the special meeting of Bank's shareholders, which took place on December 7, 2006, a decision was adopted about paying in equity capital of USD50 m. until February 1, 2007. Thus, actions of the Agency can be characterized as formal, untimely and inadequate. It is obvious that at adopting the decision about license withdrawal, the Agency did not follow interests of depositors and creditors of the Bank. Then a question arises, "In whose interests does the Agency act while initiating the bankruptcy procedure of the Bank, which has stood on the path of the financial recovery and stabilization?" In this case, Agency's chiefs' actions conflict with their words. We would like to remind that coming from Mr. Dunayev and Mrs. Bakhmutova words about necessity of a more accurate attitude towards elements of the financial market on the whole, and the banking market, in particular, were repeatedly heard. After all, a widely known truth about breaking, not building, is especially urgent in that market segment, the activity of which the Agency is trying to regulate. However, in this case, the Agency behaves as an elephant in a crockery shop. Based on the afore-said, Bank's leadership and shareholders are to file an appeal to Arbitrage of the Republic of Kazakhstan about declaration of the resolution of the Agency #315 dated December 26, 2006 as invalid. We hope that steps undertaken by us on taking the Bank out of crisis situation will find understanding and support among wide sections of community of Kazakhstan. On behalf of shareholders of Valyut-Transit-Bank JSC Steven Lee Johnson, Chairman of the Board of directors Quotation end [2006-12-28]