Alexander Forbes - SENS statement

SENS statement to be issued on 20 September 2006

Alexander Forbes Limited
(Incorporated in the Republic of South Africa)
(Registration number 1958/001974/06)
Sharecode: AFB
ISIN code: ZAE 000018230
(Alexander Forbes or the Company)

Independent assessment of business practices

Shareholders are referred to previous announcements in terms of which shareholders were advised that the Board of Directors of Alexander Forbes had appointed lawyers, Deneys Reitz and independent auditors, Ernst & Young (the independent advisers) to conduct an independent assessment of business practices of the Companys South African operations. Shareholders are now advised that the assessment has been completed and the company is now in discussion with the Financial Services board regarding the findings of the independent assessment. The company will continue to cooperate fully with the Financial Services Board in this regard. Following completion of the independent assessment it has become necessary to increase the general provision for potential historical exposures by R20 million.

An open letter from Group Chief Executive, Peter Moyo, to all interested parties is reproduced below.

Sandton
20 September 2006

Sponsor:
JPMorgan

Open letter from Peter Moyo, Group Chief Executive of Alexander Forbes Limited
To all interested parties and most of all, to our valued clients and my colleagues:

In March this year we opened our doors to Ernst & Young and asked them to go through every aspect of our business where we interact with clients and to get professional advice and opinion where necessary from Deneys Reitz. The brief was clear review all our business practices and identify any client facing business practices that fail to comply with all legal requirements as well as those that fail to meet the highest standards of corporate governance. The brief may have been straightforward but the execution required meticulous attention to detail and I thank all Alexander Forbes employees who gave of their time and knowledge to help complete this task.

We have gone through an unprecedented assessment across our three main operations in South Africa, being Risk & Insurance Services, Financial Services and Investment Solutions. I am pleased to report that the assessment has been concluded and I would like to express my gratitude to the professionals at both advisory firms for their cooperation and diligence. Most importantly I would like to thank our loyal clients who have stood by us, confident, I hope, in our sincere commitment to do the right thing.

We are in discussion with the Financial Services Board regarding the findings of the independent assessment. We will continue to cooperate fully with them in this regard. The findings are available on our website at http://www.alexanderforbes.co.za/.

The assessment covered 84 business practices. The report identifies 5 practices where improvement relative to legal requirements is required and 7 practices corrected in the past or currently undergoing correction but where the historical position potentially requires consent from or resolution with clients. None of these positions applies to Investment Solutions.

There is absolutely no excuse for the fact that we fell short in certain client-facing business practices. Some of the issues are historic and had already been addressed - others are currently being addressed and all obligations to affected clients will be discharged.

Now that the assessment is complete we will ensure that the company maintains the highest levels of ethics and governance and that every single one of our business practices meets all requirements in all respects. We also continue to cooperate with the Financial Services Board.

Alexander Forbes has always acknowledged that our customers are our greatest asset. To further show our commitment to our customers, we have recently launched an initiative to ensure that at every instance of dealing with us, our customers are treated in a respectful, dignified and transparent manner. This programme has already been rolled out in our UK businesses as well as Investment Solutions in South Africa and will now be extended to our other operations in South Africa.

At Alexander Forbes we recognise that we operate in a sector that requires us to be beyond reproach. I hope and trust that our commitment to the highest levels of corporate governance is now tangible, evident and clear for all to see.

I firmly believe that we can now move forward with confidence knowing that we have sound business practices in place.

Yours sincerely,

Peter Moyo

Group Chief Executive