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CLR clarifies re Toxotis

CLR Financial Services Ltd., in its response to a letter from the Securities & Exchange Commission of the 19 July 2001 concerning the restructuring of the share structure of Toxotis Investments Ltd., reported the following:

1.On the 27 September an agreement framework was signed between CLR Financial Services Ltd. and the Cyprus Development Bank Ltd., details of which were included in the company's announcement of the 28 September 2000.
2.The agreement framework contained the provision that details of the agreement would be examined and a final agreement would be signed by the 30 October 2000.
3.As up to the 30 October 2000 the relevant process was not completed, on the 31 October a new announcement was issued stating that the examination of the details was still in progress and it was anticipated that a relevant announcement would be issued shortly.

Based on the agreement framework, both CLR and the Development Bank would transfer to Toxotis a number of their investments in private companies so that within a short period Toxotis could be established as a venture capital company. Investments to be transferred were selected and their evaluation commenced. Despite the fact that both organisations have the necessary experience in investment evaluations, it was decided that the evaluation be undertaken by independent professional consultants (KPMG). The instructions to the consultants were very specific to ensure the transfer of investments at a fair value and at the same time ensuring complete clarity and protection of the best interests of shareholders.

The evaluation process proved quite difficult and time-consuming and the preliminary report is expected to be completed within the next few days. The parties involved will then commence negotiations and final agreements will be signed which will be subject to their endorsement by the necessary resolutions by Toxotis Investments.

CLR states that it examined the merits of issuing a new announcement but considered that this would not help the public in evaluating the situation of the company in any way as,

·The company would not be able to set a specific date for completion of the process
·The announcement would be void of meaning as it would not contain any new elements since the last announcement.
·It would not be possible to provide substantial data such as evaluation prices, precise percentages etc. to enable evaluation of the adequacy of the company after its restructure.

CLR confirmed that in no event was there any attempt to influence prices or mislead investors through the issuance or not of an announcement. As a platform, there are a series of actual events, which took place without any exaggeration or infringement.

Finally, CLR gave its assurance of its firm commitment to the upholding of regulations and to the strict focus on a code of ethics over all its activities.
Wednesday, 25 July, 2001 - 15:01