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 12 November 2004	
1.	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 the 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 LUR certificate has been issued and the Management of the Amsteel Group is liaising very closely with LFXR to register the LUR certificate in the name of the JV Co. The JV Co expects to procure the registration by 28 February 2005. The Management of the Amsteel Group will closely monitor the development and will endeavour to resolve this issue within the aforesaid time.
	
2.	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.
	Sichuan Hezheng Parkson Plaza Co Ltd
(Amsteel Group’s equity holding : 90%)*
	The Management of the 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. 31, Zong Fu Lu, Jinjiang District, Chengdu City, Sichuan Province, PRC, leased by the PRC Party to the JV Co.
	SHC will endeavour to transfer the POR certificate in its favour by 28 February 2005. The Management of the Amsteel Group will closely monitor the development and will endeavour to resolve this issue within the aforesaid time. In the meantime, SHC had issued a letter dated 20 February 2004 to confirm that the JV Co. may use the POR pending the said transfer.

*	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.