OREANDA-NEWS. April 13, 2009. Further to the announcement made by JSC Alliance Bank (the “Bank”) on 1 April 2009 relating to the overstatement of its assets, the Bank wishes to advise that the overstatement relates to transactions entered into by the Bank between 2005 and 2008 that were not properly recorded on the Bank’s balance sheet, reported the press-centre of Alliance Bank.

The transactions included guarantees issued by the Bank that were secured by a pledge of US treasury securities in the amount of approximately US1.1 billion.

Further investigations of the full extent of the impairment and adjustments required to the Bank’s financial statements are continuing, and it is currently too early to determine whether the impairment required will be for the full amount of the pledged securities or a lesser amount.

The results of the investigations (including the determination as the level of impairment required) may require a recapitalisation of the Bank.

Given this situation, the Bank was not in a position to repay the outstanding balance due under a facility agreement which matured on 19 March 2009.

As a result of these developments, on 9 April 2009, the Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Markets and Financial Organisations (the “FMSA”) has instructed the Bank to initiate negotiations with the Bank’s creditors and to begin to prepare a restructuring and recapitalisation plan that can be agreed with the Bank’s creditors.

The FMSA expects to review this plan within the next three months. The Bank has commenced discussions with its creditors with a view to seeking a three-month standstill from its creditors in order to enable the Bank to develop a restructuring and recapitalisation plan.

The terms of the restructuring and recapitalisation plan will be discussed with Samruk-Kazyna National Welfare Fund as a potential investor in the Bank.

The Bank wishes to inform its customers and depositors that this standstill only relates to certain financial indebtedness and, as such, the Bank is continuing to maintain its banking operations and payments and transfers are being made in accordance with instructions and in a timely manner.