Appendix 2(b)
LION INDUSTRIES CORPORATION BERHAD

ISSUES AFFECTING THE JOINT VENTURE COMPANIES OF AMSTEEL CORPORATION BERHAD (“AMSTEEL”) IN THE PRC

No.	Issues	Joint-Venture Company
(“JV Co.”)	Steps taken or to be taken to resolve the Issues	Status as at 10 August 2004	
1.	Retail enterprises to restructure the share holding ratio between the joint venture parties and/or the term of operation and/or business scope as required by the State Council in the PRC

Sichuan Hezheng Parkson Plaza Co Ltd
(Amsteel Group’s equity holding : 90%)

Chongqing Wangyu Parkson Plaza Co Ltd
(Amsteel Group’s equity holding : 70%)

Xian Lucky King Parkson Plaza Co Ltd
(Amsteel Group’s equity holding : 51%)	Submitted the application to maintain or restructure the share holding ratio and/or the term of operation and/or business scope for approval as required on the following dates:

7 December 2001

3 December 2001

20 February 2002	

Resolved as the approval from the relevant authorities in the PRC for the restructuring of this JV Co. was obtained in mid-May 2004. *

Resolved as the approval from the relevant authorities in the PRC for the restructuring of this JV Co. was obtained in mid-May 2004. *

Resolved as the approval from the Ministry of Commerce (formerly known as Ministry of Foreign Trade and Economic Corporation) was obtained in mid-May 2004 for the amendments to the Joint Venture Agreement and Articles of Association of this JV Co
	
No.	Issues	Joint-Venture Company
(“JV Co.”)	Steps taken or to be taken to resolve the Issues	Status as at 10 August 2004	

		
(following the approval from the State Economic and Trade Commission for the restructuring of this JV Co. which was received on 14 February 2003). * 
	
2.	Land Use Right(s) for land (“LUR”) to be transferred by the PRC Party to the JV Co. as PRC Party’s contribution to the capital of the JV Co. in accordance with the terms of the joint venture agreement

	Xian Lucky King Parkson Co Ltd
(Amsteel Group’s equity holding : 51%)	The Management of Amsteel Group had liaised with the PRC Party, Li Feng (Xian) Real Estate Development Co Ltd (“LFXR”), to transfer the LUR of the land located at No. 119, Dong Da Jie, Bei Lin District, Xian, Shanxi Province, PRC to the JV Co.
	The registration of the LUR certificate in the JV Co’s name was outstanding as of 1 June 2004. *
	
3.	Shortfall in capital to be contributed by the Amsteel Group	Mianyang Fulin Parkson Plaza Co Ltd
(Amsteel Group’s interest holding : 60%)
	The Management of Amsteel Group is required to inject such amount to make up for the shortfall of Rmb2.19 million (equivalent to approximately RM1.00 million) (“Shortfall”).	Resolved as the capital verification from the certified auditor for the injection of the Shortfall was obtained on 21 April 2004. *   
	
4.	The PRC party has not obtained the LUR or Property Ownership Right(s) for building (“POR”) certificate in its favour for property leased by the PRC Party to the JV Co. or the lease of the LUR or POR to the JV Co. has not been registered with the relevant authorities in the PRC	Mianyang Fulin Parkson Co Ltd
(Amsteel Group’s interest  holding : 60%)

Sichuan Hezheng Parkson Plaza Co Ltd
(Amsteel Group’s equity holding : 90%)

	The Management of Amsteel Group had liaised with the PRC Party, Sichuan Mianyang Fulin Real Estate Development Co Ltd (“SMF”), to register the lease of building located at No. 17, An Chang Lu, Mianyang City, Sichuan Province, PRC.

The Management of Amsteel Group had liaised with the PRC Party, Sichuan Hezheng Company Limited by Shares (“SHC”), to obtain the POR certificate for the building located at No. 	Resolved as the lease was registered on 20 July 2004. *

The transfer of the POR certificate in favour of SHC was outstanding as of 1 June 2004. *
SHC had issued a letter dated 20 February 2004 to 	
No.	Issues	Joint-Venture Company
(“JV Co.”)	Steps taken or to be taken to resolve the Issues	Status as at 10 August 2004	

Chongqing Wangyu Parkson Plaza Co Ltd
(Amsteel Group’s equity holding : 70%)
	31, Zong Fu Lu, Jinjiang District, Chengdu City, Sichuan Province, PRC, leased by the PRC Party to the JV Co.

The Management of Amsteel Group had liaised with the PRC Party, Chongqing Wangyu Economic Industry Development Corporation (“CWE”), to obtain the POR certificate in its favour for the building located at No. 77, Da Ping Changjiang Er Lu,       Yuzhong District, Chongqing, PRC and leased by the PRC Party to the JV Co.
	confirm that the JV Co. may use the POR pending the said transfer.

By a letter dated 8 March 2001,  CWE agreed to compensate the 
Amsteel Group if there is any damage arising from the non-transfer of the POR in its name. In addition, the parent company of CWE and owner of the building authorised CWE to lease the building to the JV Co. *
	
5.	The PRC Party borrowed Rmb17,803,000 from the JV Co. and as security, the PRC Party pledged its 40% equity interest in the JV Co. to the Amsteel Group. The pledge has not been registered with the relevant authorities.	Dalian Tianhe Parkson Shopping Centre Co Ltd
(Amsteel Group’s equity holding : 60%)
	The Management of Amsteel Group had liaised with the management of JV Co. to take steps to register the pledge of the equity interest by the PRC Party, Dalian Tianhe Plaza Company Limited (“DTP”).	Resolved as DTP has repaid the outstanding loan on 27 July 2004. * 	

*	As from 1 June 2004, these JV Cos became the subsidiaries of Lion Diversified Holdings Berhad (“LDHB”) following the disposal of the entire equity interests in the companies holding interests in the said JV Cos (“Disposed Companies”) to LDHB. The respective vendors of the Disposed Companies had undertaken to the Securities Commission (“SC”) that they shall indemnify LDHB for any losses incurred by LDHB as a result of any non-compliance with the laws and regulations of the PRC.