telekom malaysia berhad : celcom (malaysia) berhad, a wholly-owned subsidiary of tesb ... menara tm...

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.

In line with the provisions of Practice Note 18/2005, Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the information in this circular in respect of the Proposed Amendments to the Articles of Association of the Company as it is prescribed as an exempt circular.

Bursa Securities is not responsible for the contents of this Circular, makes no representation that this circular is accurate or complete and expressly disclaims any liability for any loss arising from or is due to your reliance on, the whole or any part of the contents of this Circular.

TELEKOM MALAYSIA BERHAD (Company No. 128740-P) (Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO THE

(I) PROPOSED NEW SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND

(II) PROPOSED AMENDMENTS TO OUR ARTICLES OF ASSOCIATION

The resolutions in respect of the above proposal will be tabled at the Twenty Third Annual General Meeting (“23rd AGM”) of Telekom Malaysia Berhad (“the Company”) to be held at Multi Purpose Hall, Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur, Malaysia on Thursday, 17 April 2008 at 10.00 a.m. The Notice of the 23rd AGM of the Company and the Proxy Form are set out in the Corporate and Financial Summary of the Company’s 2007 Annual Report despatched together with this Circular.

Last date and time for lodging the Proxy Form : Tuesday, 15 April 2008 at 10.00 a.m

Date and time of the 23rd AGM : Thursday, 17 April 2008 at 10.00 a.m.

This Circular is dated 26 March 2008

i

DEFINITIONS The following definitions are applicable throughout this Circular unless the context requires otherwise:

3G Spectrum Assignment

: Spectrum Assignment No. SA/01/2003 granted to our Company dated 2 April 2003 over the following frequency bands with effect from 2 April 2003 until 1 April 2018:

(i) 1950 megahertz (“MHz”) - 1965 MHz;

(ii) 2140 MHz - 2155 MHz; and

(iii) 2020 MHz - 2025 MHz,

as varied by the variations to the Spectrum Assignment No. SA/01/2003 dated 14 March 2007 and 15 November 2007

Act : Companies Act, 1965, as amended from time to time and any re-enactment thereof

AGM : Annual general meeting

Articles : Articles of Association

Board : Board of Directors

Bursa Securities : Bursa Malaysia Securities Berhad

Bursa Securities LR : Listing Requirements of Bursa Securities

Celcom : Celcom (Malaysia) Berhad, a wholly-owned subsidiary of TESB

CTX : Celcom Transmission (M) Sdn Bhd, a wholly-owned subsidiary of Celcom

Director : (a) A director of our Company or our subsidiary, and shall have the same meaning as given in Section 4 of the Act; and

(b) For purposes of the Proposed New Shareholders’ Mandate, includes any person who is or was within the preceding 6 months of the date on which the terms of the transaction were agreed upon, our director as referred to in paragraph (a) above or chief executive officer of our Company or our subsidiary

EGM : Extraordinary general meeting

Eligible Employee : An employee or Executive Director of the TM Group (other than subsidiaries which are incorporated out of Malaysia and/or are dormant) who meets the criteria of eligibility for participation in the Proposed Option Scheme

Entitlement Date : A date (to be determined and announced later) on which our Company’s shareholders must be registered in our Company’s Register of Members or Record of Depositors as at 5.00 p.m. in order to participate in the Proposed Distribution

EPS : Earnings per share

Executive Director : Director of our Company or any of our subsidiaries who is on the payroll of our Company or any of our subsidiaries and who is involved in the day-to-day management of our Company or any of our subsidiaries

Fibrecomm : Fibrecomm Network (M) Sdn Bhd, a 51%-owned subsidiary of CTX

Indocel : Indocel Holdings Sdn Bhd, which is a wholly-owned subsidiary of TM International (L) Limited, which in turn is a wholly-owned subsidiary of TM International

Khazanah : Khazanah Nasional Berhad, a Major Shareholder of our Company

ii

Definitions (cont’d)

LPD : 29 February 2008, being the latest practicable date prior to the printing of this Circular

M&A : Memorandum and Articles of Association

Major Shareholder : (a) A person who has an interest or interests in 1 or more of the voting shares in our Company or our subsidiary and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is:

(i) equal to or more than 10% of the aggregate of the nominal amounts of all the voting shares in that company; or

(ii) equal to or more than 5% of the aggregate of the nominal amounts of all the voting shares in that company where such person is the largest shareholder of that company.

For the purpose of this definition, “interest in shares” shall have the meaning given in Section 6A of the Act; and

(b) For the purposes of the Proposed New Shareholders’ Mandate, includes any person who is or was within the preceding 6 months of the date on which the terms of the transaction were agreed upon, a major shareholder of our Company or our subsidiary as referred to in paragraph (a) above

MoF Inc. : Minister of Finance, Incorporated

Proposals : Proposed New Shareholders’ Mandate and Proposed Amendments to our Articles of Association, collectively

Proposed Demerger : Proposed demerger of the TM Group comprising the Proposed Internal Restructuring and Proposed Distribution, collectively

Proposed Internal Restructuring

: Proposed internal restructuring of the TM Group, which involves the following transactions:

(i) CTX, a wholly-owned subsidiary of Celcom, transferring its entire 51% equity interest in Fibrecomm to TESB for a consideration of RM33 million;

(ii) TESB, a wholly-owned subsidiary of our Company, transferring its entire 100% equity interest in Celcom to TM International for a consideration of RM4,677 million;

(iii) our Company transferring our entire holding of SunShare RCPS to TM International for a consideration of RM141 million; and

(iv) settlement of net amount owing by the Proposed TM International Group to the Proposed TM Group as at 30 November 2007 of RM3,041 million;

whereby the net consideration of RM7,826 million will be satisfied as follows:

(i) RM3,801 million shall be satisfied through the issuance of such number of new TM International Shares by TM International in favour of our Company or our nominee(s) at an issue price to be determined such that the enlarged number of TM International Shares (after the Proposed Demerger) is the same as the number of TM Shares in issue as at the Entitlement Date;

(ii) RM2,925 million shall be satisfied by way of an amount owing from TM International to our Company at a finance cost of 5.90% per annum; and

(iii) RM1,100 million shall be satisfied by way of an amount owing from TM International to our Company at a finance cost of 6.72% per annum.

iii

Definitions (cont’d)

In addition, as part of the Proposed Internal Restructuring, our Company proposes to transfer the 3G Spectrum Assignment to Celcom on an ‘as is where is basis’, for a consideration of RM40.1 million to be satisfied in cash

Proposed Listing : Proposed listing of the entire issued and paid-up ordinary share capital of TM International on the Main Board of Bursa Securities.

Proposed New Shareholders’ Mandate

: Proposed new shareholders’ mandate for the RRPT to be entered into as set out in Appendix I of this Circular

Proposed Option Scheme

: Proposed employees’ share option scheme for Eligible Employees of the TM Group involving the issuance of up to 4% of the issued and paid-up share capital of our Company as at the effective date of the scheme

Proposed TM Group : Our Company and our consolidated subsidiaries upon completion of the Proposed Demerger

Proposed TM International Group

: TM International and its consolidated subsidiaries upon completion of the Proposed Internal Restructuring

Related Party : A Director, Major Shareholder or person connected with such Director or Major Shareholder

RRPT : Recurrent related party transactions of a revenue or trading nature

SunShare : SunShare Investments Ltd

SunShare RCPS : Redeemable convertible preference shares of USD0.01 each in SunShare

TESB : Telekom Enterprise Sdn Bhd, a wholly-owned subsidiary of our Company

TM or Company : Telekom Malaysia Berhad

TM Group : Our Company and our subsidiaries

TM International : TM International Berhad

TM International Group : TM International and its consolidated subsidiaries

TM International Shares : Ordinary shares of RM1.00 each in TM International

TM Shares : Ordinary shares of RM1.00 each in our Company

XL : PT Excelcomindo Pratama Tbk, an indirect 66.99%-owned subsidiary of TM International

XL Shares : Ordinary shares of IDR100 each in XL

RM : Ringgit Malaysia and sen respectively

IDR : Indonesian Rupiah

USD : United States Dollar

All references to “our Company” or “TM” in this Circular are to Telekom Malaysia Berhad, references to “our Group” or “TM Group” are to our Company and our consolidated subsidiaries and references to “we”, “us”, “our” and “ourselves” are to our Company, and save where the context otherwise requires, our consolidated subsidiaries. All references to “you” in this Circular are to the shareholders of our Company. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations. All references to the time of day in this Circular are references to Malaysian time.

iv

CONTENTS

LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPO SALS CONTAINING:

1. INTRODUCTION .......................................................................................................................... 1 2. DETAILS OF THE PROPOSALS ................................................................................................. 2 3. RATIONALE FOR THE PROPOSALS ......................................................................................... 5 4. EFFECTS OF THE PROPOSALS................................................................................................ 6 5. APPROVAL REQUIRED............................................................................................................... 6 6. MAJOR SHAREHOLDERS’ AND DIRECTORS’ INTERESTS..................................................... 7 7. DIRECTORS’ RECOMMENDATION............................................................................................ 8 8. AGM.............................................................................................................................................. 8 9. FURTHER INFORMATION .......................................................................................................... 8 APPENDICES I - DETAILS OF THE RRPT TO BE ENTERED INTO BY OUR GROUP

WITH THE RELATED PARTIES.......................................................................................... 9 II - PROPOSED AMENDMENTS TO OUR MEMORANDUM AND ARTICLES OF

ASSOCIATION................................................................................................................... 11 III - FURTHER INFORMATION............................................................................................... 25

1

TELEKOM MALAYSIA BERHAD (Company No. 128740-P) (Incorporated in Malaysia)

Registered office:

Level 51 North Wing Menara TM Jalan Pantai Baharu 50672 Kuala Lumpur Malaysia 26 March 2008

Directors: Tan Sri Dato’ Ir Muhammad Radzi Haji Mansor (Chairman) Dato’ Sri Abdul Wahid Omar (Group Chief Executive Officer) Datuk Zalekha Hassan Dato’ Azman Mokhtar Dato’ Dr Ir Abdul Rahim Daud Dato’ Lim Kheng Guan YB Datuk Nur Jazlan Tan Sri Mohamed Ir Prabahar N. K. Singam Encik Rosli Man Puan Dyg Sadiah Abg Bohan (Alternate Director to Datuk Zalekha Hassan)

To: Our shareholders Dear Sir/Madam

(I) PROPOSED NEW SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND

(II) PROPOSED AMENDMENTS TO OUR ARTICLES OF ASSOCIATION 1. INTRODUCTION

1.1 On 12 March 2008, the Board of Directors of TM announced that it proposed to seek our shareholders’ approval for the following: (a) proposed new shareholders’ mandate for our Group to enter into recurrent related

party transactions of a revenue or trading nature; and (b) proposed amendments to our Articles.

1.2 The purpose of this Circular is to provide you with the information on the Proposals together with your directors’ recommendation and to seek your approval for the resolutions pertaining to the Proposals to be tabled as Special Businesses at the forthcoming AGM, notice of which has been set out in the notice of AGM in the annual report of the Company for the financial year ended 31 December 2007.

WE ADVISE YOU TO READ AND CONSIDER THE CONTENTS OF THIS CIRCULAR CAREFULLY BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE PROPOSALS. THE PROPOSALS ARE NOT INTER-CONDITIONAL UPON ONE ANOTHER.

2

2. DETAILS OF THE PROPOSALS

2.1 Proposed New Shareholders’ Mandate

(a) Provisions under the Bursa Securities LR

Paragraph 10.09 of the Bursa Securities LR allows a listed issuer to seek a shareholders’ mandate in respect of related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for its day-to-day operations subject to the following:

(i) the transactions are in the ordinary course of business and are on terms

not more favourable to the related party than those generally available to the public;

(ii) the shareholders’ mandate is subject to annual renewal and disclosure is

made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year where the aggregate value is equal to or exceeds the applicable prescribed threshold under paragraph 2.1 of Practice Note 12/2001 of the Bursa Securities LR;

(iii) the issuance of a circular to shareholders by the listed issuer; and (iv) in a meeting to obtain the shareholders’ mandate, the interested director,

interested major shareholder or interested person connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote on the resolution approving the transactions. An interested director or interested major shareholder must ensure the persons connected with him abstain from voting on the resolution approving the transactions.

(b) Paragraph 2.1 of Practice Note 12/2001 of the Bursa Securities LR sets out the

applicable prescribed threshold for recurrent transactions as follows: (i) in relation to a listed issuer with an issued and paid-up capital of

RM60 million and above:

(aa) the consideration, value of the assets, capital outlay or costs of the recurrent transactions is equal to or exceeds RM1 million; or

(bb) the percentage ratios of such recurrent transactions is equal to

or exceeds 1%,

whichever is higher; or

(ii) in relation to a listed issuer with an issued and paid-up capital which is less than RM60 million:

(aa) the consideration, value of the assets, capital outlay or costs of

the recurrent transactions is equal to or exceeds RM1 million; or

(bb) the percentage ratios of such recurrent transactions is equal to

or exceeds 1%,

whichever is lower.

3

(c) In accordance with Paragraph 4.1.4 of Practice Note 12/2001 of the Bursa Securities LR, the Proposed New Shareholders’ Mandate, if approved by you, is subject to annual renewal. In this respect, any authority conferred by a mandate shall only continue to be in force until:

(i) the conclusion of our next AGM following the AGM at which the Proposed

New Shareholders’ Mandate was approved, at which time the authority will lapse, unless the authority is renewed by a resolution passed at such AGM;

(ii) the expiration of the period within which our next AGM is required to be

held under Section 143(1) of the Act (but shall not extend to such extension as may be allowed under Section 143(2) of the Act); or

(iii) revoked or varied by resolution passed by you at a general meeting,

whichever is earlier.

2.1.1 Our principal activities

The principal activities of our Company are the establishment, maintenance and provision of telecommunication and related services under the license issued by the Ministry of Energy, Water and Communications. The principal activities of our subsidiaries include the provision of fixed-line services, cellular services, internet and multimedia services, research and development activities, public telephone, leasing of optical fibre telecommunication system services and other telecommunication related services. Through our subsidiaries, we also provide other non-telecommunication related services such as management and consultancy services, property management, education and trading in customer premises equipment.

2.1.2 Class of Related Parties

The Proposed New Shareholders’ Mandate will apply to the following classes of Related Parties: (i) Major Shareholders

(ii) Directors

2.1.3 Class and nature of the RRPT

The details of the RRPT under the Proposed New Shareholders’ Mandate are set out in Appendix I of this Circular.

2.1.4 Review procedures for the RRPT

To ensure that the RRPT is undertaken on an arm’s length basis, on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of our minority shareholders and to supplement the existing internal control procedures of our Group, the audit committee of our Board (“Audit Committee”) will be tasked with the review and approval of such transactions. Our Audit Committee currently comprises Dato’ Lim Kheng Guan, Datuk Zalekha Hassan, Ir Prabahar NK Singam and Encik Rosli Man.

4

We have established the following procedures and guidelines for the review and approval of the RRPT:

(a) a list of the Related Parties is provided to our Group Procurement

division to monitor and the chief financial officers or heads of financial division (as the case may be) in our Group will ensure that all RRPT to be entered into by our Group are required to be undertaken on an arm’s length basis, on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of our minority shareholders;

(b) regular RRPT awareness roadshows and briefing sessions to operating

units and subsidiaries are carried out by our Group Procurement division and Compliance unit on the requirement to monitor and report on all RRPT for compilation and reporting to our Best Practices and Audit Committees;

(c) we shall maintain proper records of the RRPT to be entered into with the

Related Parties under the shareholders’ mandate. We will disclose in our annual report the breakdown of the aggregate value of RRPT entered into during the financial year based on, amongst others, the following:

(i) the type of RRPT made; and

(ii) the names of the Related Parties involved in each type of the

RRPT made and their relationship with us;

(d) we shall only enter into any RRPT after taking into account the pricing and contract rate, terms and conditions, level of service and expertise required, quality of products and services provided to/by the Related Parties as compared to prevailing market prices and rates, industry norms and standards as well as general practices by the service providers of similar capacity and capability generally available in the open market;

(e) the annual internal audit plan shall incorporate a review of all RRPT

entered or to be entered into under the shareholders’ mandate to ensure that relevant approvals for the RRPT have been obtained and/or duly ratified and the review procedures in respect of such transactions are adhered to;

(f) all RRPT will be reviewed by the internal auditors and presented at our

Audit Committee meeting. Our Audit Committee shall have the right of access to information on the Related Parties and is entitled to the services of any independent advisers, if required, in the discharge of its duties;

(g) our Audit Committee shall review on an annual basis the internal audit

reports pertaining to the RRPT to ascertain that the guidelines and procedures established to monitor the RRPT have been complied with;

(h) our Board and Audit Committee shall have the overall responsibility of

determining whether the review procedures and guidelines on the RRPT are appropriate and sufficient. If any of our Board or Audit Committee members has an interest in a RRPT, he will abstain from any decision making in respect of that RRPT; and

5

(i) if our Board and Audit Committee are of the view that the review procedures are no longer sufficient to ensure that the RRPT is made on an arm’s length basis, on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of our minority shareholders, they shall have the discretion to discharge, vary and/or modify or implement new and/or additional procedures and guidelines, without your prior approval, provided that such amended, varied, modified, new or additional procedures are no less stringent than the existing procedures and guidelines.

2.1.5 Statement by Audit Committee

Our Audit Committee has seen and reviewed the procedures mentioned in Section 2.1.4 above and is of the opinion that the abovementioned procedures are sufficient to ensure that the RRPT is on an arm’s length basis, on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of our minority shareholders.

2.2 Proposed Amendments to our Articles

We propose to amend our Articles in the manner set out in Appendix II of this Circular.

3. RATIONALE FOR THE PROPOSALS

3.1 Proposed New Shareholders’ Mandate

On 28 September 2007, our Board announced that it has approved the Proposed Demerger of the Group to create 2 separate entities with distinct business strategies and aspirations. At an EGM on 6 March 2008, our shareholders have approved, among others, the Proposed Demerger and Proposed Listing. The Proposed Demerger and Proposed Listing, among others, are expected to be completed by the end of the second quarter of 2008. Upon completion of the Proposed Demerger, the Proposed TM International Group will be demerged from our Group, whereby Khazanah will be a Major Shareholder of both our Company and TM International. As such, TM International will be deemed as a Related Party as defined under the Listing Requirements. The Proposed New Shareholders’ Mandate will enable us to enter into the RRPT described in Appendix I of this Circular which includes RRPT between Proposed TM Group and Proposed TM International Group. The RRPT are transactions in the ordinary course of our business, made on an arm’s length basis, on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of our minority shareholders.

The RRPT to be entered by our Group are intended to meet our business needs at the best possible terms. Our Group should be able to have access to all available markets and products and services provided by all vendors including the Related Parties. This will enhance our Group’s ability to explore beneficial opportunities as well as to promote cross-selling within our Group.

6

The RRPT is likely to continue in the future on a frequent and recurrent basis from time to time. In addition, these transactions may be time-sensitive and confidential. The Proposed New Shareholders’ Mandate will eliminate the need to announce and convene separate general meetings to seek your prior approval on a case by case basis before entering into such transactions. The Proposed New Shareholders’ Mandate will therefore enable us to save administrative time and expenses which could be better utilised towards pursuing our corporate objectives.

3.2 Proposed Amendments to our Articles

The proposed amendments to our Articles are:

(a) to ensure that our Articles comply with the amended Bursa Securities LR, the provisions of the Capital Markets and Services Act 2007; and

(b) to update the Articles so as to enhance the administrative efficiency of the

Company as well as to ensure clarity and consistency throughout our Articles. Further details and rationale for the Proposed Amendments to our Articles are set out in Appendix II of this Circular.

4. EFFECTS OF THE PROPOSALS

4.1 Issued and paid-up share capital

The Proposals will not have any effect on our issued and paid-up share capital.

4.2 Net assets and gearing

Based on our audited consolidated balance sheet as at 31 December 2007, the Proposed New Shareholders’ Mandate is not expected to have a material effect on our consolidated net assets per share or our gearing level, whilst the Proposed Amendments to our Articles will not have any effect on our consolidated net assets per share or our gearing level.

4.3 Earnings

The Proposed New Shareholders’ Mandate is expected to contribute positively to our consolidated EPS for the financial year ending 31 December 2008, whilst the Proposed Amendments to our Articles will not have any effect on our consolidated EPS for the financial year ending 31 December 2008.

4.4 Shareholdings of our substantial shareholders

The Proposals will not have any effect on the shareholdings of our substantial shareholders.

5. APPROVAL REQUIRED

The Proposals are subject to your approval at our forthcoming AGM.

7

6. MAJOR SHAREHOLDERS’ AND DIRECTORS’ INTERESTS Save as disclosed below, none of our Major Shareholders, Directors and/or persons connected

with them have any interest, direct or indirect, in the Proposals.

The Major Shareholders, Directors and/or persons connected with them who are interested in the Proposed New Shareholders’ Mandate are disclosed in Appendix I of this Circular. Their direct and indirect shareholdings in our Company, based on the Register of Substantial Shareholders and Register of Directors’ Shareholdings as at the LPD are as follows:

---------------- Direct ---------------- --------- ----- Indirect ---------------

Interested parties No. of TM Shares % No. of TM Shares %

Major Shareholder

MoF Inc. 144,000 * 1,243,057,173(1) 36.14

Khazanah 1,243,057,173 36.14 - -

Director

Datuk Zalekha Hassan - - - -

Puan Dyg Sadiah Abg Bohan - - - -

Dato’ Azman Mokhtar - - - -

Notes: * Less than 0.01% (1) Deemed interest through Khazanah under Section 6A of the Act.

MoF Inc and Khazanah, our Major Shareholders, who are deemed interested in the Proposed New Shareholders’ Mandate will abstain from voting in respect of their direct or indirect shareholdings in us on the resolution pertaining to the Proposed New Shareholders’ Mandate at our forthcoming AGM. MoF Inc and Khazanah, through their representative(s) on our Board, have also undertaken to ensure that persons connected to them will abstain from voting in respect of their direct and indirect shareholdings (if any) in us on the resolution pertaining to the Proposed New Shareholders’ Mandate at our forthcoming AGM. Datuk Zalekha Hassan our Director, is MoF Inc’s representative on our Board. Puan Dyg Sadiah Abg Bohan is the alternate Director to Datuk Zalekha Hassan. Datuk Zalekha Hassan and Puan Dyg Sadiah Abg Bohan have abstained and will continue to abstain from deliberation and voting on the Proposed New Shareholders’ Mandate at our relevant Board meetings. Dato’ Azman Mokhtar, our Director, is the Chairman of TM International, the Managing Director of Khazanah and also Khazanah’s representative on our Board. In view of his common directorships in TM International, our Company and Khazanah, he has abstained and will continue to abstain from deliberation and voting on the Proposed New Shareholders’ Mandate at our relevant Board meetings.

Datuk Zalekha Hassan, Puan Dyg Sadiah Abg Bohan and Dato’ Azman Mokhtar will abstain and have also undertaken to ensure that any persons connected with them will abstain from voting in respect of their direct and indirect shareholdings (if any) in us on the resolution for the Proposed New Shareholders’ Mandate at our forthcoming AGM.

8

7. DIRECTORS’ RECOMMENDATION

Our Board (save for Datuk Zalekha Hassan, Puan Dyg Sadiah Abg Bohan and Dato’ Azman Mokhtar who have abstained from expressing their opinions and recommendations), having considered all aspects of the Proposed New Shareholders’ Mandate, is of the opinion that the Proposed New Shareholders’ Mandate is in our best interest. Accordingly, our Board (save for Datuk Zalekha Hassan, Puan Dyg Sadiah Abg Bohan and Dato’ Azman Mokhtar) recommends that you vote in favour of the resolution pertaining to the Proposed New Shareholders’ Mandate at our forthcoming AGM. Our Board, having considered all aspects of the Proposed Amendments to our Articles, is of the opinion that the Proposed Amendments to our Articles is in our best interest. Accordingly our Board recommends you to vote in favour of the resolution pertaining to the Proposed Amendments to our Articles at the forthcoming AGM.

8. AGM

The 23rd AGM of the Company, the Notice and Proxy Form of which are enclosed in the Corporate and Financial Summary of the Company’s 2007 Annual Report, despatched together with this Circular, will be held at the Multi Purpose Hall, Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur, Malaysia on Thursday, 17 April 2008 at 10.00 a.m. and at any adjournment thereof. If you are unable to attend and vote in person at the AGM, please complete, sign and return the Proxy Form to our Share Registrars’ office at Tenaga Koperat Sdn Bhd, G-01 Ground Floor, Plaza Permata, Jalan Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia as soon as possible and in any event not less than 48 hours before the time of the AGM or any adjournment, or, in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll. You may attend and vote in person at the AGM, if you wish to do so, even after you have completed and submitted the Proxy Form, so long as you revoke the appointment of your proxy.

9. FURTHER INFORMATION Please refer to Appendix III of this Circular for further information. Yours faithfully, For and on behalf of the Board of Directors of TELEKOM MALAYSIA BERHAD Tan Sri Dato’ Ir Muhammad Radzi Haji Mansor Chairman

9

APPENDIX I

DETAILS OF THE RRPT TO BE ENTERED INTO BY OUR GROUP WITH THE RELATED PARTIES

Transacting companies in our Group

Transacting Related Parties

Interested Major Shareholder/Director

Nature of relationship

Nature of RRPT

Estimated value from date of the forth

coming 23 rd AGM to the next AGM

RM 000 Our Company and/or our proposed subsidiaries after the Proposed Demerger (“Proposed TM Group ”)

TM International Berhad and/or its proposed subsidiaries after the Proposed Demerger (“Proposed TM International Group ”)

MoF Inc., Khazanah, Datuk Zalekha Hassan, Puan Dyg Sadiah Abg Bohan and Dato’ Azman Mokhtar

In addition to their eventual shareholdings in us, MoF Inc. and Khazanah will be Major Shareholders of TM International after the Proposed Demerger. Datuk Zalekha Hassan is a representative of MoF Inc. on our Board. Puan Dyg Sadiah Abg Bohan is the alternate Director to Datuk Zalekha Hassan.

- Interconnect revenue and cost between the Proposed TM Group and the Proposed TM International Group

- Voice Over Internet Protocol-

related services revenue and cost between the Proposed TM Group and the Proposed TM International Group

- Lease-line cost by TM to the

Proposed TM International Group

495,106

In addition to his appointment as Chairman of TM International, Dato’ Azman Mokhtar is the Managing Director of Khazanah and a representative of Khazanah on our Board.

- Provision of data and bandwidth related services by TM to Celcom

- Provision of Voice Over Internet

Protocol (“VoIP”) related services by TM to Celcom

- Site rental for telecommunication infrastructure, equipments and related charges by TM to Celcom (1)

- Internet access and broadband charges by TM to Celcom

10

Transacting companies in our Group

Transacting Related Parties

Interested Major Shareholder/Director

Nature of relationship

Nature of RRPT

Estimated value from date of the forth

coming 23 rd AGM to the next AGM

RM 000 - Provision of Corporate

Information Superhighway services by TM to Celcom

- Commission on registration and

collection to TM from Celcom - Provision of contact centre and

business process outsourcing services by VADS Berhad to Celcom

- Leasing of fibre optic core and provision of bandwidth services from Fiberail Sdn Bhd to Celcom

- Other telecommunication-related transactions between the Proposed TM Group and TM International Group

Our Company and/or our subsidiaries

KUB Malaysia Berhad (“KUB ”) and its subsidiaries

Ministry of Finance, Malaysia (“MOF”)

In addition to its shareholdings in us via Khazanah, MOF holds a 22.73% interest in KUB.

Purchase and/or utilization of telecommunication equipments, systems and related services by Proposed TM Group from KUB

102,000

Notes:

(1) The site rental contracts are renewable yearly and rental are payable on a quarterly basis.

The estimated value of transactions shown above represents the best estimates by our management. Accordingly, the actual transacted value may vary and exceed the estimates shown above.

11

APPENDIX II

PROPOSED AMENDMENTS TO OUR ARTICLES OF ASSOCIATION The Articles of Association of the Company are proposed to be altered and amended in the following manner, with the existing applicable provisions thereof as reproduced in the 2nd column of the table of amendments below together with corresponding proposed alterations and amendments as struck-through for deletions and in bold and underlined for insertions as set out in the 3rd column of the table of amendments. Article No. Original Provision of our Articles Prop osed Provision of our Articles Rationale

2 “Central Depository” means Bursa Malaysia

Depository Sdn Bhd

“Central Depository” means Bursa Malaysia Depository Sdn Bhd.

To be consistent with paragraph 1.01 of the Bursa Securities LR

Throughout the Articles

of Association,

including Articles 2, 11(3), 18, 23(2), 42,

46(1), 48(2),

50(3A), 52(2), 56,

59(1), 61(1)(iii),

74(3)(a)&(b) and

141(1)&(2)

All references to “Central Depository ” All references to “Central Depository ” except in relation to “Central Depository Act ” to be altered and amended to ”Depository ”.


2 None. “market day” means a day on which the Stock Exchange is open for trading of securities.


2 None. “securities” shall have the meaning given in section 2 of the Capital Markets and Services Act 2007.

To be consistent with the definition in section 2 of the Capital Markets and Services Act 2007.

12

Article No. Original Provision of our Articles Prop osed Provision of our Articles Rationale

7A (1) The 1,000 Class A RPS of RM0.01 each shall confer on their holders the following rights: (a) As regards income The right to a non-cumulative net dividend payable semi-annually in cash at the end of every six (6) month period commencing from the date of issue of the Class A RPS, out of the profits of the Company available for distribution in respect of each financial year or other accounting period of the Company. The non-cumulative net dividend shall be calculated in the following manner: Net dividend payable shall be equal to the full interest payable on the Telekom Bonds1 for each six (6) month period less any amount standing in the balance of the Designated Account 15 days or such number of days to be fixed by the Company prior to the Telekom Bonds1 coupon payment date and where:

Article 7A to be deleted in its entirety. To be deleted since Class A RPS has been fully redeemed on 20 July 2007.

(i) The Designated Account shall be defined as an account to be maintained by SPV2 to capture all dividends and taxation refunds, if any, received by SPV2 in relation to the SPV2 Bonds1. Any outstanding balance in the Designated Account shall be fully utilised to make coupon payments on each coupon payment date for the SPV2 Bonds1, unless the put option on the Company is exercised by the trustee of the SPV2 Bonds1 on behalf of the holders of the SPV2 Bonds1. Any declaration or payment of dividends shall only be made: (i) in cash;

13


(ii) with tax credit required for the

payment of dividends as set out in Section 108 of the Income Tax Act, 1967 ("Section 108 Tax Credit"); and

(iii) in accordance with Section 365 of the Companies Act, 1965.

The holders of the RPS shall not be entitled to participate in the surplus profits or assets of the Company beyond such rights as are expressly set out herein.

The Directors shall be authorised to declare and pay to the holders of the RPS the said non-cumulative net dividend.

(b) As regards capital Each RPS shall not confer on the holder

thereof any right to participate on a return in excess of capital on liquidation, winding up or otherwise of the Company, other than on redemption, up to the redemption price of RM1.00 of each RPS.

(c) As regards voting

The Class A RPS shall carry no right to vote at any general meeting of the Company except with regards to the proposal to reduce the capital of the Company, sanctioning the disposal of the whole of the Company's property, business and undertaking or where the proposition to be submitted to the meeting directly affects the rights and privileges of the Class A RPS holders or when the dividend on the Class A RPS is in arrears for more than six (6) months or on a proposal to wind up the Company or during the winding up of the Company.

14


(d) As regards redemption

The Class A RPS shall, subject to Section 61 of the Companies Act, 1965, be redeemed upon and subject to the following terms and conditions:

(i) The Company shall have the right, at any time to redeem in whole or in part thereof at the issue price of RM1.00 for each RPS;

(ii) Not less than one (1) month's notice of the intention of the Company to redeem shall be given to the holders of the RPS to be redeemed. The notice shall be in writing and shall fix the time and place for such redemption. At the time and place so fixed, the registered holders of the RPS to be redeemed shall be bound to deliver up to the Company the relevant share certificates for cancellation, and the Company shall pay to them the redemption money in respect of such RPS;

(iii) If any of the holders of the RPS shall fail or refuse to surrender the certificate or certificates for such RPS or shall fail or refuse to accept the redemption money payable in respect of them, such money shall be retained and held by the Company in trust for such holder but without interest or further obligation whatsoever;

(iv) No RPS shall be redeemed otherwise than in accordance with the provisions of Section 61 of the Companies Act, 1965 and of this Article; and

15


(v) No RPS redeemed by the Company shall be capable of reissue.

(e) As regards ranking The Class A RPS shall rank pari passu

among themselves and with the Class B RPS but below the Special Share and ahead of the ordinary shares of the Company in a distribution of capital in the event of winding up or liquidation of the Company.

(f) As regards conversion No Class A RPS may be converted into

fully paid ordinary shares of the Company.

(g) As regards transferability

The Class A RPS shall, subject to the Company’s consent, which consent shall not be unreasonably withheld, be transferable in whole or in part and they shall not be listed on the Stock Exchange or any other stock exchange.

(h) As regards notices, reports and audited accounts and meetings.

The holders of Class A RPS shall be entitled to the same rights as a holder of an ordinary share in relation to receiving notices, reports and audited accounts and attending meetings.

16


7B (1) The 1,000 Class B RPS of RM0.01 each shall confer on their holders the following rights: (a) As regards income

The right to a non-cumulative net dividend

payable semi-annually in cash at the end of very six (6) month period commencing from the date of issue of the Class B RPS, out of the profits of the Company available for distribution in respect of each financial year or other accounting period of the Company. The non-cumulative net dividend shall be calculated in the following manner:

Article 7B to be deleted in its entirety. To be deleted since Class B RPS has been fully redeemed on 20 July 2007.

Net dividend payable shall be equal to the full interest payable on the Telekom Bonds2 for each six (6) month period less any amount standing in the balance of the Designated Account 15 days or such number of days to be fixed by the Company prior to the Telekom Bonds2's coupon payment date and where:

(i) the Designated Account shall be defined as an account to be maintained by SPV2 to capture all dividends and taxation refunds, if any, received by SPV2 in relation to the SPV2 Bonds2. Any outstanding balance in the Designated Account shall be fully utilised to make coupon payments on each coupon payment date for the SPV2 Bonds2, unless the put option on the Company is exercised by the trustee of the SPV2 Bonds2 on behalf of the holders of the SPV2 Bonds2. Any declaration or payment of dividends shall only be made: (i) in cash;

17


(ii) with tax credit required for the payment of dividends as set out in Section 108 of the Income Tax Act, 1967 ("Section 108 Tax Credit”); and

(iii) in accordance with Section 365 of the Companies Act, 1965.

The holders of the RPS shall not be entitled to participate in the surplus profits or assets of the Company beyond such rights as are expressly set out herein.

The Directors shall be authorised to declare and pay to the holders of the RPS the said non-cumulative net dividend.

(b) As regards capital

Each RPS shall not confer on the holder thereof any right to participate on a return in excess of capital on liquidation, winding up or otherwise of the Company, other than on redemption, up to the redemption price of RM1.00 for each RPS.

(c) As regards voting

The Class B RPS shall carry no right to vote at any general meeting of the Company except with regards to the proposal to reduce the capital of the Company, sanctioning the disposal of the whole of the Company's property, business and undertaking or where the proposition to be submitted to the meeting directly affects the rights and privileges of the Class B RPS holders or when the dividend on the Class B RPS is in arrears for more than six (6) months or on a proposal to wind up the Company or during the winding up of the Company.

18


(d) As regards redemption

The Class B RPS shall, subject to Section 61 of the Companies Act, 1965, be redeemed upon and subject to the following terms and conditions:

(i) The Company shall have the right, at any time to redeem in whole or in part thereof at the issue price of RM1.00 for each RPS;

(ii) Not less than one (1) month's notice of the intention of the Company to redeem shall be given to the holders of the RPS to be redeemed. The notice shall be in writing and shall fix the time and place for such redemption. At the time and place so fixed, the registered holders of the RPS to be redeemed shall be bound to deliver up to the Company the relevant share certificates for cancellation, and the Company shall pay to them the redemption money in respect of such RPS;

(iii) If any of the holders of the RPS shall fail or refuse to surrender the certificate or certificates for such RPS or shall fail or refuse to accept the redemption money payable in respect of them, such money shall be retained and held by the Company in trust for such holder but without interest or further obligation whatsoever;

(iv) No RPS shall be redeemed otherwise than in accordance with the provisions of Section 61 of the Companies Act, 1965 and of this Article; and

19


(v) No RPS redeemed by the Company shall be capable of reissue.

(e) As regards ranking

The Class B RPS shall rank pari passu among themselves and with the Class B RPS but below the Special Share and ahead of the ordinary shares of the Company in a distribution of capital in the event of winding up or liquidation of the Company. (f) As regards conversion

No Class B RPS may be converted into fully paid ordinary shares of the Company.

(g) As regards transferability

The Class B RPS shall, subject to the Company’s consent, which consent shall not be unreasonably withheld, be transferable in whole or in part and they shall not be listed on the Stock Exchange or any other stock exchange.

(h) As regards notices, reports and audited accounts and meetings

The holders of Class B RPS shall be entitled

to the same rights as a holder of an ordinary share in relation to receiving notices, reports and audited accounts and attending meetings.

20


11(1) Subject to any direction to the contrary that may be

given by the Company in general meeting, all new shares or other convertible securities shall, before issue, be offered to such persons as at the date of offer are entitled to receive notices from the Company of general meetings in proportion as nearly as the circumstances admit, to the amount of the existing shares or securities to which they are entitled. The offer shall be made by notice specifying the number of shares or securities offered, and limiting a time within which the offer, if not accepted, will be deemed to be declined, and after the expiration of that time, or on the receipt of an intimation from the person to whom the offer is made that he declines to accept the shares or securities offered, the Directors may dispose of those shares or securities in such manner as they think most beneficial to the Company. The Directors may likewise also dispose of any new share or security which (by reason of the ratio which the new shares or securities bear to shares or securities held by persons entitled to an offer of new shares or securities) cannot, in the opinion of the Directors, be conveniently offered under this Article.

Subject to any direction to the contrary that may be given by the Company in general meeting, all new shares or other convertible securities shall, before issue, be offered to such persons as at the date of offer are entitled to receive notices from the Company of general meetings in proportion as nearly as the circumstances admit, to the amount of the existing shares or securities to which they are entitled. The offer shall be made by notice specifying the number of shares or securities offered, and limiting a time within which the offer, if not accepted, will be deemed to be declined, and after the expiration of that time, or on the receipt of an intimation from the person to whom the offer is made that he declines to accept the shares or securities offered, the Directors may dispose of those shares or securities in such manner as they think most beneficial to the Company. The Directors may likewise also dispose of any new share or security which (by reason of the ratio which the new shares or securities bear to shares or securities held by persons entitled to an offer of new shares or securities) cannot, in the opinion of the Directors, be conveniently offered under this Article. Notwithstanding the above, the Company may apply to the Stock Exchange to waive the convening of an extraordinary general meeting to obtain shareholders’ approval for further issues of shares (other than bonus or rights issues) where the aggregate issues of which in any one financial year do not exceed 10 percent of the issued capital.

For enhancement, as result of the proposed deletion of Article 63

21


Side heading of “Shares to be under control of

Directors ”

Side heading to be replaced with “Issue of new shares or convertible securities to Members ”

To be consistent with Paragraph 7.10 of the Bursa Securities LR

13(4) In a distribution of capital in a winding up of the Company, the preference shareholder shall be entitled to repayment of capital paid up in priority to any repayment of capital to any ordinary shareholder.

Article 13(4) to be deleted in its entirety. To be consistent with Paragraph 7.08 of the Bursa Securities LR

20A Subject to the provisions of the Act, the rules and regulations made pursuant thereto and the requirements of the Stock Exchange and/or any other relevant authority, the Company may purchase its own shares and make payment in respect of such purchase in the manner permitted thereunder. Any shares in the Company so purchased by the Company shall be dealt with as provided by the Act, the rules and regulations made pursuant thereto and the requirements of the Stock Exchange and/or any other relevant authority.

Subject to the provisions of the Act, the Capital Markets and Services Act 2007, the rules and regulations made pursuant thereto and the requirements of the Stock Exchange and/or any other relevant authority, the Company may purchase its own shares and make payment in respect of such purchase in the manner permitted thereunder. Any shares in the Company so purchased by the Company shall be dealt with as provided by the Act, the Capital Markets and Services Act 2007, the rules and regulations made pursuant thereto and the requirements of the Stock Exchange and/or any other relevant authority.


63 (1) Subject to any direction to the contrary that may be given by the Company in general meeting, all unissued shares shall, before issue, be offered to such persons as at the date of the offer are entitled to receive notices from the Company of general meetings in proportion, as nearly as the circumstances allow, to the sum of the nominal values of the shares already held by them.

Articles 63 (together with the side heading) to be deleted in its entirety

Duplication with Article 11(1), except for Article 63(5). Accordingly, Article 11(1) to be altered and amended to incorporate the provisions in Article 63(5) for consistency.

22


(2) The Offer shall be made by notice

specifying the number of shares offered and limiting a time within which the offer, if not accepted, will be deemed to be declined.

(3) After the expiration of that time or being notified by the person to whom the offer is made that he declines to accept the shares offered, the Directors may issue those shares in such manner as they think most beneficial to the Company.

(4) Where, by reason of the proportion that shares proposed to be issued bear to shares already held, some of the first-mentioned shares cannot be offered in accordance with sub-article (1), the Directors may issue the shares that cannot be so offered in such manner as they think most beneficial to the Company.

(5) Notwithstanding the above, the Company may apply to the Stock Exchange to waive the convening of an extraordinary general meeting to obtain shareholders’ approval for further issues of shares (other than bonus or rights issues) where the aggregate issues of which in any one financial year do not exceed 10 percent of the issued capital.

23


93 The instrument appointing a proxy or

representative together with the duly registered power of attorney, if any, shall be deposited at the Registered Office of the Company, or at such other place within Malaysia as is specified for that purpose in the notice convening the meeting, not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, or, in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll, and in default the instrument shall not be treated as valid.

The instrument appointing a proxy or representative together with the duly registered power of attorney, if any, shall be deposited at the Registered Office of the Company, or at such other place within Malaysia as is specified for that purpose in the notice convening the meeting, not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote. or, in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll, and in default the instrument shall not be treated as valid.

For administrative efficiency.

101 Subject as otherwise provided for in these Articles and to the terms of any subsisting agreement, the office of a Director shall be vacated if he:

Subject as otherwise provided for in these Articles and to the terms of any subsisting agreement, the office of a Director shall be vacated if he:


(a) ceases to be a Director by virtue of the Act; (a) ceases to be a Director by virtue of the Act;

(b) becomes bankrupt or makes any arrangement or composition with his creditors generally;

(b) becomes bankrupt or makes any arrangement or composition with his creditors generally during the term of his office ;

(c) becomes prohibited from being a director by reason of any order made under the Act;

(c) becomes prohibited from being a director by reason of any order made under the Act;

(d) becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to the mental disorder during his term of office;

(d) becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to the mental disorder during his term of office;

(e) resigns his office by notice in writing to the Company;

(e) resigns his office by notice in writing to the Company;

24


(f) is absent from more than fifty percent (50%)

of the total meetings of the Directors held during a financial year, unless an exemption or waiver is obtained from the Stock Exchange;

(f) Deleted

(g) is directly or indirectly interested in any contract or proposed contract with the Company and fails to declare the nature of his interest in manner required by the Act; or

(g) is directly or indirectly interested in any contract or proposed contract with the Company and fails to declare the nature of his interest in manner required by the Act; or

(h) is convicted by a court of law, whether within Malaysia or elsewhere, in relation to the offences set out in Article 101A above.

(h) is convicted by a court of law, whether within Malaysia or elsewhere, in relation to the offences set out in Article 101A above.

101A For the purposes of this Article, “securities laws” means the Securities Industry Act 1983, the Central Depositories Act, the Securities Commission Act 1993 and the Futures Industry Act 1993.

For the purposes of this Article, “securities laws” means the Capital Markets and Services Act 2007, the Central Depositories Act and the Securities Commission Act 1993.

To be consistent with Paragraph 15.05(2) of the Bursa Securities LR

139(1) The Directors shall from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and reports in accordance with the Act.

The Directors shall from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and reports, whether in printed form, CD-Rom form or such other form of electronic media, subject to and in accordance with the Act and the Bursa Securities LR respectively .

To provide for issuance of annual report in CD-Rom in accordance with Paragraph 9.23A of the Bursa Securities LR

25

APPENDIX III FURTHER INFORMATION 1. RESPONSIBILITY STATEMENT

Our Directors have seen and approved this Circular and they collectively and individually accept full responsibility for the accuracy of the information in this Circular. They confirm, after making all reasonable enquiries, that to the best of their knowledge and belief, there are no false or misleading statements or other facts which, if omitted, would make a statement in this Circular false or misleading.

2. MATERIAL CONTRACTS

Save as disclosed below, neither we nor our subsidiaries have entered into any contracts which are or may be material, not being contracts entered into in the ordinary course of business, during the 2 years preceding the LPD:

(a) Share Sale and Purchase Agreement dated 10 March 2006 between Distacom

India Holdings Limited (“DIHL”), Dai (Mauritius) Company Limited (“Dai”), Deutsche Bank AG, Ashmore Cayman SPC Limited (“Ashmore ”), the Ashmore funds, namely Ashmore Global Special Situations Fund Limited, Ashmore Global Special Situations Fund 2 Limited, Asset Holder PCC No. 2 Limited Re Ashmore Asian Recovery Fund, EMDCD Ltd, Asset Holder PCC Limited Re Ashmore Emerging Markets Liquid Investment Portfolio and Ashmore Emerging Markets Debt Fund and TM International on the acquisition of the entire issued and paid-up share capital of Distacom Communications (India) Limited (“DCIL”) by TM International from DIHL and Dai for a cash consideration of USD178.8 million;

(b) Shareholders’ Agreement dated 10 March 2006 between TM International, Modi

Wellvest Private Limited (now known as MCorpglobal Communications Private Limited), Super Infosys Private Limited, MCorpglobal Private Limited, India Televentures Private Limited, MCorp Telecom Limited (now known as Orion Telecoms Limited) and Spice Communications Limited (“Spice ”) (formerly known as Spice Communications Private Limited), as amended by supplemental agreements dated 28 April 2006 and 10 January 2007, which sets out their respective rights and obligations as shareholders of Spice;

(c) Joint Venture Agreement dated 16 January 2007 entered into between CT Paging

Sdn Bhd (“CT Paging ”), i-Mobile International Co. Ltd (“I-Mobile ”) and C-Mobile Sdn Bhd (“C-Mobile ”) for the purpose of establishing a joint venture company, C-Mobile, as a vehicle to operate a distribution network of dealers and concept retail stores based on the intellectual property rights owned by Celcom. The agreement also regulates the relationship between CT Paging and I-Mobile as the shareholders of C-Mobile subject to the terms and conditions contained therein;

(d) Settlement Agreement dated 8 October 2007 between TMIB and Bangladesh

Telecommunication Regulatory Commission (“BTRC”) evidencing full, final and conclusive settlement of the investigation and show cause notice issued by the BTRC in respect of an allegation of breach of section 65 of the Bangladesh Telecommunication Act, 2001 by TMIB concerning the unauthorised use of Voice over Internet Protocol technology services by TMIB subscribers, and pursuant to which TMIB agrees to pay an administrative fine of Bangladeshi taka 1,450 million to the BTRC, in settlement of such allegation of breach;

(e) Demerger Agreement dated 10 December 2007 among our Company, CTX,

TESB, Celcom and TM International for the purchase by TM International from TESB of all the shares in Celcom, purchase by TM International from our Company of the SunShare RCPS; the sale by CTX to TESB of all the shares held by CTX in Fibrecomm; the transfer of the 3G spectrum assignment from our

26

Company to Celcom and the settlement of debts owing to our Company by TM International after the assumption of the inter-company debts of TMIB, TMI Mauritius Ltd, TM International Lanka (Private) Limited and TM International (L) Limited. Further to the implementation of the transactions, a net consideration in the amount of RM7,826 million is payable by TM International to our Company;

(f) Framework Agreement dated 10 December 2007, among our Company, Celcom

and TM International to govern the existing and future commercial arrangements among our Company, Celcom and TM International including sales and marketing, IT services, access, network, facilities, research and development, finance services and human resource services and an agreement that our Company will not engage in or make any investment in any mobile business without TM International’s prior consent, and TM International will not engage in or make any investment in any fixed-line business in Malaysia without our Company’s prior consent, for a period of three years from completion of the Proposed Demerger or such other time as may be mutually agreed by parties in writing;

(g) Shareholders' Agreement dated 11 December 2007 between TMIL and Etisalat

International Indonesia Limited ("Etisalat ") to govern the relationship between TMIL and Etisalat in respect of the shares held in XL, pursuant to Etisalat's entry as a new shareholder of XL.

(h) The following material contracts entered into between us and Menara ABS Berhad

(“MAB” ), a special purpose vehicle, in connection with the issuance of up to RM1,100 million Islamic Asset-Backed Sukuk Ijarah by MAB:

(i) Conditional Sale and Purchase Agreement dated 2 January 2008

(“SPA1”) between our Company and MAB for the sale by our Company to MAB of the following properties:

(aa) freehold land held under the issue document title of HS(M) 3885,

Lot. No. PT 3901, Tempat Jalan Pantai Baru, Mukim and Daerah Kuala Lumpur, Negeri Wilayah Persekutuan measuring approximately 30,708 square meters, together with the building erected on the land bearing postal address Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur (“Menara TM” );

(bb) freehold land held under the issue document of title HS(D)

71,280, Lot. No. PT 3569, Mukim and Daerah Kuala Lumpur, Negeri Wilayah Persekutuan measuring approximately 4,230 square meters, together with the building erected on the land bearing postal address Menara TM, Taman Desa, Jalan Desa Utama, 58100 Kuala Lumpur (“Menara TM Taman Desa” );

(cc) property bearing postal address Komplek TM Cyberjaya, 3300,

Lingkaran Usahawan 1 Timur, 63000 Cyberjaya, Selangor held under a portion of the master title HSD 7791, Lot PT 12,056, Mukim Dengkil, Daerah Sepang measuring approximately 8,799 square meters (“Cyberjaya Complex” )

for a total cash consideration of RM850 million;

(ii) Supplemental Agreement dated 2 January 2008 to the sale and purchase

agreement 28 August 2007 (“SPA2” ) between our Company and MAB for the sale by our Company to MAB of the leasehold land held under the issue document of title HS(D) 64439, Lot. No. PT 24, Seksyen 87A, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan measuring approximately 9,108 square meters together with the building erected on the land bearing postal address Menara Celcom, Jalan Semarak, Kuala Lumpur (“Menara Celcom” ), for a total cash consideration of RM150 million;

27

(iii) Master Ijarah Agreement dated 2 January 2008 between MAB as the lessor/issuer and our Company as the lessee to govern the lease back arrangement in relation to Menara TM, Wisma TM Taman Desa, Cyberjaya Complex and Menara Celcom (collectively “Properties” ) upon the completion of SPA1 and SPA2 such that MAB shall grant to us leases in respect of the Properties for a period of 15 years at the following rentals:

(aa) a fixed rental of RM65.4 million per annum for year 1 to 5, RM75.2

million for year 6 to 10 and RM86.5 million for year 11 to 15; and (bb) additional rental comprising inter alia the property manager’s fees

of RM117,000 per month payable by MAB to us as property manager under the Property Management Agreement dated 2 January 2008 (as referred to in paragraph (iv) below);

whereby we will continue to occupy, maintain and manage the Properties.

(iv) Property Management Agreement dated 2 January 2008 between MAB

and us to govern the relationship between MAB and us as the property manager to service, administer and carry out all such duties in respect of all the Properties on behalf of MAB at a fee of RM117,000 per month as property manager’s fee, for the duration of the leases of the Properties;

(i) Sale and Purchase Agreement dated 6 February 2008 between Khazanah, TM

International and Indocel for the following:

(i) proposed acquisition by TM International from Khazanah of 35,965,998 SunShare RCPS and 2 SunShare Shares, collectively representing approximately 49% of the issued and paid-up capital of SunShare, for a purchase consideration of RM155 million; and

(ii) proposed acquisition by Indocel from Khazanah of 1,191,553,500 XL

Shares, representing approximately 16.81% of the issued and paid-up share capital of XL, for a purchase consideration of RM1,425 million.

3. MATERIAL LITIGATION Save as disclosed below, as at the LPD, neither we nor our subsidiaries are engaged in

any material litigation, claims or arbitration, either as plaintiff or defendant, which has a material effect on our financial position or business, and we are not aware of any proceedings, pending or threatened, or of any facts likely to give rise to any proceedings which may materially affect our financial position or business: (a) TM v. Business Focus Sdn Bhd

(Kuala Lumpur High Court Suit No. D6-22-14884-2002)

In accordance with the agreement dated 20 February 1997, Business Focus Sdn Bhd (“Business Focus ” or “Defendant ”) had agreed to procure a third party to purchase TM’s shares in Penang Shipbuilding and Construction Industries Berhad (“PSCI”), failing which Business Focus will purchase TM’s shares in PSCI. TM entered into a Supplementary Agreement with Business Focus on 1 December 1997 where Business Focus agreed to purchase TM’s shares in PSCI to be satisfied by the transfer of certain properties and cash (“Consideration ”). However, only part of the Consideration was settled on 28 August 1998 via the transfer of a piece of land in Johor only.

On 26 April 2004, TM obtained Summary Judgement against the Defendant for RM174.7 million together with interest and other costs.

28

On 17 January 2005, Business Focus’ appeal against the Summary Judgment’s decision was dismissed with costs. Business Focus had filed a Notice of Appeal against the said decision in the Court of Appeal on 24 January 2005. The Court of Appeal has yet to fix the hearing date for the appeal filed by Business Focus. On 29 July 2005, TM served a notice under Section 218 of the Act (“Section 218 Notice ”) against Business Focus and in response, Business Focus had on 4 August 2005 disputed the entire allegation made in the Section 218 Notice. On 21 November 2005, the Court granted a winding-up order against Business Focus pursuant to a petition filed by Export-Import Bank Malaysia Berhad. On 17 January 2006, TM filed the proof of debt against Business Focus for the recovery of the amount due and payable to TM. During the second creditors’ meeting held on 25 January 2006, Business Focus’ creditors had unanimously agreed to appoint O & M Corporate Advisory Sdn Bhd as the private liquidator for this matter. Pursuant to an application by the Official Receiver, the Kuala Lumpur High Court ordered the appointment of Mr. Wong Cham Mew and Mr. Ong Kong Lai, both from O & M Corporate Advisory Sdn Bhd, as liquidators of Business Focus on 6 March 2006 and the sealed Court Order was extracted on 20 April 2006. Since their appointment, the liquidators have tried various means to locate the assets of Business Focus but to no avail. At the creditors’ meeting on 21 March 2007, the liquidators proposed certain causes of action including investigating past transactions of Business Focus to recover Business Focus’ assets for the benefit of the creditors and seeking the relevant orders from the Court to compel Business Focus’ officers and other parties whom the liquidators had contacted to provide the required information. As the liquidators have been unable to locate any significant assets of Business Focus, the liquidators highlighted that their proposed cause of action would need to be funded by the stakeholders of Business Focus. The liquidators are currently seeking the decision of the stakeholders of Business Focus.

(b) Celcom v. DeTeAsia Holding GmbH (Kuala Lumpur High Court (Special and Appellate Pow ers Division) Originating Summons No. R1-24-85-2005) In 2003, DeTeAsia Holding GmbH (“DeTeAsia ”) initiated arbitration in the International Court of Arbitration of the International Chamber of Commerce in Paris (“ICC”) against Celcom for monetary damages caused by Celcom’s alleged breach of the Amended and Restated Supplemental Agreement between Celcom, DeTeAsia, Technology Resources Industries Berhad (“TRI”) and TR International Limited (“TRIL”) dated 4 April 2003 (“ARSA”). The arbitration proceedings were held in July 2004 in Geneva. In August 2005, the arbitral tribunal found in DeTeAsia’s favor and ordered Celcom to pay the full amount of its principal claim of approximately USD177.2 million together with interest at 8% from 16 October 2002 until full settlement and costs (“Award ”). In February 2006, Celcom satisfied the Award without prejudice to proceedings that Celcom was contemplating to commence in Malaysia. On 17 November 2005, Celcom commenced proceeding in Malaysia seeking, inter alia, a declaration that the Award was contrary to the public policy of Malaysia and hence unenforceable in Malaysia. DeTeAsia has responded with an application to set aside this proceeding. DeTeAsia’s application has been fixed for mention on 28 April 2008. Celcom’s action will be heard by the Malaysian courts only after DeTeAsia’s response has been disposed of. Celcom’s solicitors are of the opinion that Celcom has an even chance of success in obtaining the relief sought.

29

(c) Rego Multi-Trades Sdn Bhd v. Aras Capital Sdn Bhd & Tan Sri Dato’ Tajudin Ramli (Kuala Lumpur High Court (Commercial Division ) Civil Suit No. D2-22-1411-2005)

In 2005, Rego Multi-Trades Sdn Bhd (“Rego ”), a wholly-owned subsidiary of Celcom commenced proceedings in the High Court against Aras Capital Sdn Bhd (“Aras Capital ”) and Tan Sri Dato’ Tajudin Ramli (“TSDTR”) for amounts due to Rego pursuant to an investment agreement with Aras Capital and an indemnity letter given by TSDTR. The sum claimed in the proceedings is RM261,849,264.26 as at 30 November 2004 together with interests and costs. On 13 May 2005, TSDTR filed its defence and instituted a counterclaim against Rego, TRI and its directors to void and rescind the indemnity letter and also claim damages. Subsequently, Rego, TRI and its directors filed their respective applications to strike-out TSDTR’s counter-claim on 19 July 2005 but their respective applications were dismissed by the Registrar on 18 May 2006. Rego, TRI and its directors then filed their respective appeals and the same are fixed for mention on 1 April 2008. Rego’s solicitors are of the view that it has good prospects of succeeding on the claim and successfully defending the counterclaim if the same were to proceed to trial.

(d) TM & Telekom Publications Sdn Bhd v. Buying Guide (M) Sdn Bhd

(Kuala Lumpur High Court Suit No. D6-22-1332-2003) On 11 August 2003, TM jointly with Telekom Publications Sdn Bhd (now known

as TM Info-Media Sdn Bhd) (“TMIM”), TM’s wholly-owned subsidiary, instituted legal proceedings against Buying Guide (M) Sdn Bhd (“BGSB ”) relating to the infringement of TMIM’s and TM’s copyright and passing off.

BGSB filed their defence and counterclaim on 15 October 2003 for RM114.3 million which was dismissed by the Assistant Registrar.

On 27 July 2004, BGSB filed their notice of appeal against the Assistant Registrar’s decision which was dismissed on 8 April 2005 with cost. On 10 June 2005, TMIM and TM filed their reply to BGSB’s statement of defence and TM’s defence to BGSB’s counterclaim. The case management of this matter was heard on 14 February 2007, 11 June 2007, 14 September 2007, and 5 November 2007 respectively, and TMIM and TM had filed and served the tentative list of witness and tentative list of documents. The next case management hearing is on 19 June 2008. TM’s solicitor is of the view that based on the available documents and the various discussions with TM and TMIM, TM has a reasonable chance of success in its claim and defending BGSB’s counterclaim.

(e) TM & Telekom Publications Sdn Bhd v. BG Online Sdn Bhd & BG Media Sdn

Bhd (Kuala Lumpur High Court Suit No. D7-22-1144-20 04) On 10 August 2004, TM jointly with TMIM filed an application for an injunction against BG Online Sdn Bhd (“BG Online ”) and BG Media Sdn Bhd (“BG Media ”) to prevent them from publishing any telephone directories including the Super Pages directory comprising the Yellow Pages mark and/or the Yellow Pages Get-Up which is confusingly similar to TM’s mark or get-up. On 9 August 2005, the High Court allowed TM’s application for the Interim Injunction. The approval on the terms of the order was obtained from the High Court on 18 August 2005. The said Interim Injunction would be effective and valid until the full trial of the case. At the current moment, no trial date has been fixed by the High Court.

30

TMIM and TM filed for Notice of Motion for committal against the said directors on 27 January 2006. On 3 October 2007, the Court dismissed the BGM/BGO directors’ application to cross-examine the deponent of the affidavit in support of the Notice of Motion. The parties have been further requested to file their respective written submission in court in respect of TM/TMIM’s Notice of Motion to commit the directors of BGM and BGO to prison. On 23 November 2007, the Court dismissed TM’s Notice of Motion and fixed the case for further Case Management on 16 April 2008. TM’s solicitor is of the view that based on the available documents and the various discussions with the relevant parties, TM has reasonable prospects of success in this action.

(f) MCAT GEN Sdn Bhd v. Celcom

MCAT Gen Sdn Bhd (“MCAT”) has commenced two related proceedings against Celcom. Details of these proceedings as follows: (i) Contractual Claim

(Kuala Lumpur High Court Civil Suit No. D4-22-1682- 2005)

In November 2005, MCAT filed a claim against Celcom for alleged breach of an agreement between Celcom and MCAT for MCAT to resell Celcom’s application and network services on a prepaid basis (“Reseller Agreement ”). MCAT sought, amongst other remedies, specific performance of the Reseller Agreement, damages in the sum of RM765.1 million and damages in lieu or in addition to specific performance. Celcom’s position is that it did not enter into the Reseller Agreement and there is no agreement between the parties. In 2006, MCAT unsuccessfully applied for an injunction to restrain Celcom from entering into a similar agreement with any other party that would be detrimental to MCAT’s alleged rights under the Reseller Agreement and from disclosing any confidential information to third parties. Celcom applied to the High Court for security of costs and to strike out parts of MCAT’s statement of claim on the basis that the statement did not satisfy the Court’s direction to furnish further and better particulars to Celcom. The High Court granted Celcom’s application for security for costs and MCAT has paid an aggregate of RM250,000 into the Court. Celcom’s striking out application was however dismissed by the Court. The matter commenced to trial in June 2007 and hearings are scheduled to continue in May 2008.

(ii) Libel Claim

(Kuala Lumpur High Court Civil Suit No. S6-23-74-20 05) In connection with the abovementioned suit, in November 2005, MCAT filed a claim against Celcom, alleging that Celcom’s denial of any contractual relationship with MCAT in respect of the Reseller Agreement constituted libel. MCAT sought, amongst other remedies, damages for libel in the sum of RM1.0 billion, aggravated and exemplary damages, an injunction restraining Celcom from further publishing any similar allegedly defamatory words, a public apology, interests and costs. Celcom then filed a defence on the grounds that there was no concluded contract between the parties and, furthermore, that its statements were published by third parties and, in any event, not defamatory of MCAT. It also instituted a counterclaim against MCAT for passing off its products and services as those of Celcom’s, implying a trade association with Celcom when no such association exists and for misrepresenting itself as a

31

reseller of its products and services, and filed an application to strike out MCAT’s claim. In December 2006, at the Court’s direction, Celcom successfully applied to consolidate this action with the suit mentioned in item (vii) below (under the heading - Tan Sri Abdul Rashid Bin Abdul Manaf, Danny Ng Siew L’Leong, Datuk Yaacob Bin Md Amin, Ungku Safian Bin Ungku Abdullah & Mohd Razi Bin Adam v. Celcom), which MCAT appealed against. Subsequently MCAT has withdrawn the appeal with no order as to costs. On 22 March 2007, Celcom’s striking out application was dismissed with costs and Celcom subsequently filed an appeal against this dismissal. On 29 January 2008, the High Court dismissed Celcom’s appeal. Celcom has on 25 February filed a notice of appeal to the Court of Appeal. No dates have been fixed yet.

Based on the available documents and various discussions with the relevant parties, Celcom’s solicitors are of the view that Celcom has an even chance of defending the contractual and libel claims.

(g) Tan Sri Abdul Rashid Bin Abdul Manaf, Danny Ng Sie w L’Leong, Datuk Yaacob Bin Md Amin, Ungku Safian Bin Ungku Abdullah & Mohd Razi Bin Adam v. Celcom (Kuala Lumpur High Court Civil Suit No. S4-23-77-2005)

In 2005, the directors of MCAT, namely, Tan Sri Abdul Rashid Bin Adul Manaf, Danny Ng Siew L’leong, Datuk Yaacob Bin Md Amin, Ungku Safian Bin Ungku Abdullah and Mohd Razi Bin Adam commenced a libel action against Celcom in their personal capacities on the same basis as the libel action commenced by MCAT mentioned in item (vi)(b) above (see “MCAT GEN Sdn Bhd v. Celcom - (b) Libel Claim”) (the “MCAT Libel Suit ”). The plaintiffs sought, amongst other remedies, an aggregate amount of RM1.1 billion in damages, aggravated and exemplary damages, a retraction of the allegedly defamatory statements and an injunctions restraining Celcom from further publishing any similar allegedly defamatory words. Celcom filed its defence and striking out application on the same grounds as its defence in the MCAT Libel Suit. It also filed a counterclaim against Mohd Razi bin Adam for a breach of his employment contract with Celcom and his fiduciary duties as an employee of Celcom prior to his joining MCAT as its chief executive officer. Celcom also applied for an injunction to restrain him from disclosing confidential information acquired by him as an employee of Celcom. Celcom’s striking out application was allowed with costs on 12 November 2007. The plaintiffs have filed an appeal and no dates have been fixed. On 9 March 2007, Celcom successfully applied to consolidate this suit with the MCAT Libel Suit. Consequently, this proceeding shall only be heard after the MCAT Libel Suit has been disposed off.

Based on the available documents and various discussions with the relevant

parties, Celcom’s external solicitors are of the view that Celcom has an even chance of defending the libel claim.

32

(h) Celcom & Another v. TSDTR & 8 Others

(Kuala Lumpur High Court (Commercial Division) Suit No. D5-22-610-2006)

In connection with the Award in DeTeAsia’s favour mentioned in item (ii) above, Celcom instituted proceedings against eight of its former directors alleging that they had breached their fiduciary duties in entering into a subscription agreement on its behalf on 25 June 1996 with Deutsche Telekom AG, and an amended and restated supplemental agreement dated 4 April 2002 with DeTeAsia whilst they were directors of Celcom. In addition, Celcom has also made a claim against TSDTR for alleged unauthorised profits made by him in connection with the execution of the abovementioned agreements. Celcom is seeking an indemnity from the directors for the sums paid by Celcom to DeTeAsia in satisfaction of the Award against it, return of the alleged unauthorized profits by TSDTR amounting to RM446 million, all monies received by the directors arising out of such breaches, losses and damages. Proceedings have been served on all the Defendants. Mr Axel Hass, one of the former directors was served by way of substituted service. Celcom’s and TRI’s application to restrain Dato’ Lim Kheng Yew’s (one of the directors), solicitors from representing him on the ground that the solicitors had advised on the abovementioned agreements in connection with the acquisition of Celcom by the TM Group was allowed with costs on 26 February 2008. The remaining directors except for Mr Axel Hass have respectively applied to set aside these proceedings on the basis that the issues had been litigated and decided on their merits based on the Award. On 7 March 2008, the solicitors for the remaining directors informed Celcom’s solicitors and the Court that they have entered conditional appearance on behalf of Mr Axel Hass and will be filing similar application to set aside these proceedings. TSDTR and Bistamam Ramli’s application is fixed for hearing on 13 June 2008. The applications for the other directors, including Mr Axel Hass application, are scheduled for hearing on 12 June 2008. Celcom’s solicitors are of the view that Celcom and TRI have reasonable prospects of successfully concluding these proceedings.

(i) Pengurusan Danaharta Nasional Berhad & 2 Others v. TSDTR (By Original Claim), TSDTR v. Danaharta & 23 Others (By Counterc laim) (Kuala Lumpur High Court Civil Suit No. D2-22-673-2 006)

In June 2006, TM, TESB, Celcom and TRI (collectively referred to in this Section as “TM Group ”) were served with a defence and counterclaim by TSDTR in connection with proceedings initiated against him by Pengurusan Danaharta Nasional Berhad (“Danaharta ”) and two others. The TM Group and the 20 defendants were joined in these proceedings via the counterclaim. TSDTR seeks from the defendants, including the TM Group, jointly and severally, amongst others the following relief: (i) the sum of RM6,246,492,000.00; (ii) an account of all sums paid:

(aa) under the Facility Agreement dated 13 July 1994 between a syndicate of lenders and TSDTR; and

(bb) to Danaharta and its subsidiaries by TSDTR and received by

Danaharta from the sale of TRI shares and Naluri Corporation Berhad shares;

(iii) an order for repayment of all sums overpaid by TSDTR to Danaharta; and

33

(iv) an account of all dividends and payments received by TM and TESB in relation to TRI (now Celcom) shares and an order for payment of these sums.

In addition, TSDTR seeks from all the defendants, inter alia the following relief: (i) the sum of RM7,214,909,224.01; (ii) a declaration that the vesting certificates are illegal and ultra vires the

Pengurusan Danaharta Nasional Act, 1998 (“Danaharta Act ”), unconstitutional and against public policy;

(iii) a declaration that the Settlement Agreement dated October 8, 2001

between TSDTR and Danaharta (“Settlement Agreement ”) is illegal and ultra vires the Danaharta Act, unconstitutional and against public policy; and

(iv) a declaration that all acts and deeds and agreements executed by

Danaharta pursuant to the vesting certificates and/or the Settlement Agreement are illegal and unenforceable.

In July 2006, the TM Group’s solicitors filed applications on behalf of TM/TESB, and Celcom/TRI respectively to strike out the counterclaim. Both applications were dismissed on 28 August 2007 with costs. TM/TESB appeal against the dismissal is fixed for hearing on 16 July 2008 and Celcom/TRI appeal is fixed for hearing on 26 September 2008. TSDTR has also applied to re-amend the counterclaim to include 14 additional defendants, 11 of whom are present or former directors/officers of the TM Group. This application is fixed for hearing on 21 July 2008. The TM Group is opposing it on the grounds it is, amongst others, frivolous and an abuse of the process of court. Based on the evidence presently available, the TM Group’s solicitors are of the view that the TM Group has a good defense to the counterclaim.

(j) Mohd Shuaib Ishak v. TM Group & 11 others (Kuala Lumpur High Court (Commercial Division) Civi l Suit No. D6-22-1568-2007) On 26 November 2007, TM, Celcom and TESB (collectively referred to in this Section as “TM Group ”) had been served with a Writ of Summons and Statement of Claim in respect of a suit filed by Mohd Shuaib Ishak (“MSI”). MSI is seeking from the TM Group and 11 others (including the former and existing directors of TM Group) jointly and/or severally, inter alia, the following: (i) a Declaration that the Sale and Purchase Agreement dated 28 October

2002 between Celcom and TM (or TESB) for the acquisition by Celcom of the shares in TM Cellular Sdn Bhd, and all matters undertaken thereunder including but not limited to the issuance of shares by Celcom are illegal and void and of no effect;

(ii) a Declaration that all purchases of shares in Celcom made by TESB

and/or TM and/or parties acting in concert with them with effect from and including the date of the Notice of the Mandatory Offer dated 3 April 2002 issued by Commerce International Merchant Bankers Berhad (now known as CIMB) are illegal and void and of no effect;

(iii) all necessary and fit orders and directions as may be required to give

effect to the aforesaid Declarations as the Court deemed fit including but not limited to directions for the rescission of all transfers of shares of Celcom made after the Notice of Mandatory Offer for shares in Celcom dated 3 April 2003;

34

(iv) that TM by itself, its servants and agents be restrained from giving effect

to or executing any of the proposals relating to the proposed de-merger of the mobile and fixed-line businesses of the TM Group; and

(v) various damages to be assessed. The TM Group has as of 30 November 2007 obtained leave to enter conditional appearance and subsequently on 17 December 2007, TM Group filed the relevant applications to strike out the suit. The hearing date for the striking out applications was 11 February 2008. On 11 February 2008, the Court postponed the hearing for the striking out applications to 15 May 2008. TM’s Board is of the view that the claims made by MSI are not sustainable and accordingly will take steps to strike out the action.

(k) Johanes Irwanto Putro v. XL

On 11 January 2007, XL received a notification letter from the Yogyakarta District Court regarding the execution of a North Jakarta District Court decision relating to a claim by Johanes Irwanto Putro for ownership of the XL’s land located in Yogyakarta which was purchased in 2002. On 15 January 2007, XL lodged an objection with the Yogyakarta District Court for the execution of the North Jakarta District Court decision. For the purpose of such objection, XL appointed a law consultant in relation to the retention of XL’s ownership of the land located at Jl. Pangeran Mangkubumi 20-22 Yogyakarta. XL lodged an objection on the basis that XL is the legal owner based on HGB Certificates No. B117/Gowongan and No. B.125/Gowongan. On 22 June 2007, Yogyakarta District Court’s verdict stated that XL was the legal owner of the land, and that the North Jakarta District Court decision was not valid and did not have any legal effect with respect to XL. On 27 June 2007, the North Jakarta District Court produced a new resolution which cancelled the execution of its previous decision. Johanes Irwanto appealed against the Yogyakarta District Court decision. On 28 September 2007, XL submitted a Contra Appeal Memorandum to the Yogyakarta District Court. On January 6, 2008, the Yogyakarta High Court issued a decision affirming Yogyakarta District Court’s verdict. Until the LPD, XL has not received any notice from the District Court of Yogyakarta that Johanes Irwanto Putro intends to appeal the Yogyakarta High Court’s decision to the Supreme Court.

(l) Commissioner for the Supervision of Business Compe tition v. XL & 7

Others

On 1 November 2007, the Commissioner for the Supervision of Business Competition (“KPPU”) issued a decision addressed to XL and seven other telecommunication companies, PT Telkomsel, PT Indosat, PT Telkom, PT Hutchinson CP Telecommunication, PT Bakrie Telekom, PT Mobile 8 Telecom and PT Smart Telecom, regarding a preliminary investigation on suspicions of price-fixing of Short Message Services (“SMS”) and therefore breaching Article 5 of Antimonopoly Law (Law No.5/1999). On 15 November 2007, following the preliminary investigation conducted by the KPPU, the KPPU sent a summons letter to the president director of XL as well as

35

the seven other telecommunications companies for a hearing session scheduled on 16 November 2007. However, due to the tight schedule of the president director, this investigation was postponed until 12 December 2007. On 14 December 2007 the KPPU has decided to proceed with the second stage of investigation against all operators and if the KPPU believes that it requires further information from XL, XL may be summoned to appear before the KPPU or requested to provide such information. Under Indonesian Law, the KPPU is required to complete the second stage of the investigation within 60 business days, to be followed by a 30-day business day decision-making period. A decision is expected to be rendered in May 2008. If XL and the other operators are found liable for price-fixing, they may be ordered to terminate or abandon the perceived minimum price arrangement and to pay fines of up to IDR 25.0 billion.

(m) Mohd Shuaib Ishak v. Celcom

(Kuala Lumpur High Court (Commercial Division) Originating Summons No. D5-24-20-2008)

On 4 February 2008, Celcom had been served with a sealed Originating Summons (“Summons”) by MSI seeking leave to bring a derivative action in Celcom’s name under Section 181A(1) of the Companies Act 1965 (“Proposed Action”).

The Proposed Action is against, inter alia, the former and existing directors of Celcom and TM for failing to obtain the consent of DeTeAsia pursuant to the Amended and Restated Agreement (“ARSA”) dated 4 April 2002 with DeTeAsia prior to entering into the Sale and Purchase Agreement dated 28 October 2002 with TM for the acquisition by Celcom of the shares in TM Cellular Sdn Bhd (now known as Celcom Mobile Sdn Bhd).

MSI alleges that the directors are liable for damages calculated by reference to the difference between the Buy Out Offer price of RM7.00 per Celcom’s share under the ARSA and the price of RM2.75 per Celcom’s share under the Mandatory General Offer undertaken by TM through TESB in respect of Celcom. The Summons has been fixed for hearing on 22 April 2008.

The Directors are advised by its solicitors that it has reasonably good prospects of resisting the Summons and will take vigorous steps to defend the same.

With respect to the material litigation where both the Proposed TM Group and the

Proposed TM International Group are held jointly and severally liable, the Courts would award the damages to the group of defendants as a whole. In such a case, the defendant paying the damages may seek contribution from the other defendants.

4. CORPORATE EXERCISES ANNOUNCED BUT PENDING COMPLETION

Save as disclosed below, we have not announce any corporate exercise which have yet to be completed as at the LPD:

(a) Proposed Demerger (b) Proposed Option Scheme

(c) Proposed shareholders’ mandate to be sought by TM International for the

issuance of up to 10% of TM International’s issued and paid-up capital pursuant to Section 132D of the Act

36

(d) Proposed Acquisition by TM International and Indocel from Khazanah of equity interest in SunShare and XL for an aggregate purchase consideration of RM1,580 Million to be satisfied by the issuance of new TM International shares.

5. DOCUMENTS FOR INSPECTION

Copies of the following documents may be inspected at our registered office at Level 51, North Wing, Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur, Malaysia during office hours on Mondays to Fridays (except public holidays) from the date of this Circular up to and including the date of the EGM: (a) Our Memorandum and Articles of Association;

(b) Our audited consolidated financial statements for the past 2 financial years ended

31 December 2006 and 2007; (c) Material contracts referred to in Section 2 above; and

(d) Cause papers for material litigation referred to in Section 3 above.

telekom malaysia berhad : celcom (malaysia) berhad, a wholly-owned subsidiary of tesb ... menara tm...

Documents