Statement by the Board of Directors of the Companies in the Sharemax Promoted Portfolio of Companies

Issued to Investors and other Interested and Affected Parties

Further to recent communication, the new Board of the Sharemax related companies (excluding Sharemax Investments) currently operating under directives of the South African Reserve Bank (the SARB), herewith communicates further to all Investors and Interested and Affected parties.

The Board has decided to extend the proposed Scheme of Arrangement Process (see our communiqué of January 2011), to more than one Scheme, in order to encompass all the companies under directive. This approach is expected to be more cost effective and is likely to hasten the process.

Substantial progress has been made in the structuring and preparation of the relevant Schemes. More information will be provided as the Scheme Process progresses. The Schemes are being structured with the view to eliminating all and any contraventions of the Banks Act, in order to make it possible for the directives to be withdrawn upon the sanctioning by the High Court of the Schemes.

The Board has officially handed its formal status and progress report on the Board’s activities thus far, to the Registrar of Banks. The Board awaits the Registrar’s response.

The Board has considered the legal status of the directives issued by the SARB against the affected companies. The previous board instituted applications for review of the decision of the Registrar of Banks to place the affected companies under directives. The applications remain unresolved in terms of arrangements concluded between the previous board and the Registrar of Banks, and the directives currently remain fully effective, notwithstanding the review applications. The Board therefore conducts its activities under the supervision of the Statutory Managers and under the directives.

Depending on legal advice currently being sought, the new Board may decide, in future, to withdraw the review applications.

A brief status report:

· The Villa

The Board is pleased to announce that agreement has been reached regarding a number of issues pertaining to the Villa project. In particular an agreement has been concluded which, when implemented, will have the effect of the Villa project being completed.

The implementation of the agreement is subject to the fulfilment of a number of suspensive conditions. These conditions are currently in the process of being implemented.

The Board is confident that the agreement, once implemented, will provide a much better solution to the current problems associated with the Villa project and serve the interests of Interested and Affected parties, and most importantly, Investors, much better than any possible liquidation or similar process of the Villa project.

The board has decided not to make more information available at this time, as the current status of implementation of the agreement is sensitive and subject to the approval of the SARB. The agreement, should the suspensive conditions thereto be fulfilled, will form part of and be implemented by the Scheme Process following the approval of the High Court, and, ultimately, with the full approval of the SARB.

· Zambezi

The Board is also pleased to announce that an agreement is in the process of being negotiated, which agreement, should same be concluded, will have similar effects, with regard to the Zambezi project, as those referred to above in regard to the Villa project. The Board is confident that this agreement will be concluded in the near future. Further communication in this regard will follow.

· Flora

The Flora Centre secured financing in the form of a R70 million bond over the property from Mercantile Bank, during 2010, to be utilised to fund a revamp of the Centre. Much of the improvements at the Centre have been completed. However, because of the uncertainty surrounding the legal status of the companies under directive, Mercantile was reluctant to release the remaining facility secured by the bond. The Board approached Mercantile and, with the assistance of the Statutory Managers and with their approval, Mercantile agreed to release further draws on the remaining facility. As a consequence, the Board is pleased to announce that the revamp of the Centre has now recommenced and is expected to be finalised in the normal course, to the benefit of lessees and customers of the Centre and the Investors in the Centre.

Issued on behalf of the Board of Directors