PRESS STATEMENT BY THE LIQUIDATION BOARD ABOUT THE EXTRAORDINARY GENERAL ASSEMBLY MEETING OF İHLAS FİNANS IN LIQUIDATION

The Extraordinary General Assembly meeting was held on 03/08/2001 with the aim to establish the principles of the liquidation process started on 10/02/2001 and to appoint the new Board of Directors and the Liquidators in accordance with the articles of association.

The company which had 216.592 depositors and 1.131 million USD deposits (sum of the Current Accounts and Profit and Loss Sharing Accounts) as of 13/11/2000 (starting date of the economic crisis) presently has 167.072 depositors and 881 million USD deposits based on the Turkish Lira deposits converted to American Dollars on the exchange rate of 03/08/2001. In the meantime, 33 million USD has been paid as dividends to the depositors.

The Inventory and the Balance Sheet of 10/02/2001 of the company proves that the registered receivables are sufficient to cover the registered debts of the company. With regard to the collection of such receivables and disbursement of such debts of the company;

A ? The Turkish Lira accounts will be converted to American Dollar on the foreign exchange selling rate of 03/08/2001 of the Central Bank of Turkish Republic.

B ? The foreign currency accounts will be maintained in the same currency.

C ? The debts of the company will be paid as from August 2001 in the following order in accordance with the laws.

       1 ? Debts owed to government (taxes etc.)

       2 ? Personnel debts,

       3 ? Payments to the accounts of the Holders of the Current Accounts

       4 ? Payments to the accounts of the Holders of the Profit and Loss Sharing Accounts

       5 ? Other Debts of the company

       6 ? Receivables of the Partners

D ? The company still holds 36.8 billion TL in the Central Bank of Turkish Republic which is confiscated by the Ministry of Finance.

E ? The Turkish Lira debts of the companies indebted to our company will be converted to American Dollar on the exchange rate of 03/08/2001 of the Central Bank of Turkish Republic and all the debts will be collected in maximum five years in the form of cash and compulsory payments and, where necessary, in non-cash form.

F ? All the assets (movable and immovable assets etc.) of the company registered in its Balance Sheet will be converted to cash on the market value.

G ? The branches of the company will be moved to smaller locations and turned into liaison offices to reduce the costs.

H ? The liquidation procedures will be completed by paying off all the debts of the company within five years.

I ? The payments made during the liquidation process and the developments related to liquidation will be announced to our depositors from time to time through newspapers and television.

As known, the liquidators are obliged to act as prudent businessmen and comply with the payment orders and equality principles during the liquidation process. In this regard, the fact that some depositors chose to have recourse to executive proceedings to collect their receivables which are not yet certain causes injuries to other depositors and impairs the payment sequence and equality principles of liquidation. In order to avoid this unfavorable situation, the Liquidation Board has to take all necessary legal measures.

All records of the depositors are available in our company. The dates and method of the payment of the receivables which will be made in accordance with the above mentioned time limits, payment order and equality principles will be informed to the depositors through telephone calls from the company branches or by way of registered and reply-paid letters sent to their addresses.

We thank all our depositors for their patience and tolerance which we believe will continue in the future as well, and hereby once more declare that we will make utmost efforts to settle all the debts as soon as possible.

With best regards, 

İHLAS FİNANS IN LIQUIDATION