The following amendment has been made to the 'Claim against Investment Manager' announcement released on 15 August 2014 at 16:45 under RNS No 3206P.
The date of the announcement has been changed from 18 August 2014 to 15 August
2014.
All other details remain unchanged.
15 August 2014

ARC Capital Holdings Limited Claim against the Investment Manager

On 6 February 2014, ARC Capital Holdings Limited (the "Company") announced a possible claim against ARC Capital Partners Limited (the "Investment Manager") arising out of the transfer procured by the Investment Manager of RMB 480 million (the "Orient Home Payment") under an Equity Purchase Agreement (the "Agreement") for the purchase of a majority stake (the "Consideration Shares") in Orient Home Industrial Co., Ltd ("Orient Home Industrial"). The Orient Home Payment was made to Orient Home Co Limited ("Orient Home Co"), a controlled affiliate of the Orient Group. The Orient Home Payment represented the full purchase price for the Consideration Shares under the Agreement. Following the making of the Orient Home Payment the conditions precedent to completion of the transaction set out in the Agreement were not satisfied. Accordingly, Orient Home Co became liable to repay the Orient Home Payment, but no repayment has been forthcoming.
The Board believes that the Investment Manager acted negligently and/or breached its investment management agreement with the Company (the "IMA") in entering into the Agreement on the terms that it did and/or in making the Orient Home Payment. The Board has come to this view on the basis that the Orient Home Payment (which was the full consideration of RMB 480 million payable under the Agreement for the purchase of the Consideration Shares) was released to Orient Home Co, without any security or escrow arrangements, and on the basis only of a contractual promise from Orient Home Co to transfer all of the Consideration Shares at a future date if all of the conditions precedent set out in the Agreement were satisfied or, if they were not satisfied, to return the money.
The Company and the Investment Manager have been engaged in pre-action correspondence since February 2014. On 17 June 2014, the parties entered into a short standstill agreement.
The exchange of correspondence has however not led to a resolution of the dispute. Having considered the position with its legal advisers, the Board announces that the Company has now issued legal proceedings against the Investment Manager for negligence and/or breach of the IMA. The Company is claiming damages in the sum of RMB 480 million for the loss of the Orient Home Payment and other losses, including the professional fees and other costs the Company has incurred in attempting to secure repayment of the Orient Home Payment from Orient Home Co.
For more information, please contact:

ARC CAPITAL HOLDINGS LIMITED:

Steve Feniger, Chairman of the Board
E: steve.feniger@gmail.com

NOMINATED ADVISER:

Philip Secrett
Grant Thornton UK LLP T: (44) 20 7383 5100
E: Philip.J.Secrett@uk.gt.com

BROKER:

Numis Securities Limited David Benda / Hugh Jonathan T: (44) 20 7260 1000
F: (44) 20 7260 1001
E: d.benda@numiscorp.com

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