The Directors suspended dealings in the shares pending clarification of certain issues relating to the conversion of RMB to US dollars to meet outstanding service charge payments due to the Fund totaling (as at the date of this announcement) approximately $6million under the Investment Services and Returns Agreement between the Fund, China Securities Co., Ltd., the China Heartland Fund (Mauritius) Ltd ("Subsidiary") and Martin Currie Investment Management Ltd. China Securities Co., Ltd. Has submitted an invoice in respect of a service charge payment to the State Administration of Foreign Exchange ("SAFE") for approval. The invoice is currently being reviewed by SAFE but no indication has been given by SAFE as to when they will provide a response. Accordingly the Directors believe that, in the best interests of shareholders, it is prudent for them to continue the suspension pending a response from SAFE. The Directors have requested a meeting between SAFE and representatives of the Fund to expedite a response from SAFE.
China Securities Co., Ltd. have confirmed that they are holding approximately $8.35m on deposit for the Fund in a €˜B' share account with Citibank NA in New York and that this amount is available to the Subsidiary to withdraw if required under the terms of the Agreement.
The Directors are actively considering alternative means of securing payment from China Securities Co., Ltd. for the outstanding service charge payments."