Contents :

We refer to the queries raised in the letter dated 15 December 2005 from the Exchange regarding our announcement of 14 December 2005 (‘the Announcement’) on the above matter. The following is our response to the queries raised in the said letter:

1. Interest rate on the amount claimed for

The Plaintiffs are claiming interest at the rate of 8 percent per annum on sums awarded ‘from or from such other date as the Court may determine until the date of full realization’.

2. Circumstances leading to the filing of the summons

(i) As stated in the Announcement, the Plaintiffs’ claims are for libel arising from certain articles in the New Straits Times, Utusan Malaysia, Harian Metro and Berita Harian (“the Articles”). The Plaintiffs are directors of MCAT GEN Sdn Bhd (“MCAT”).

(ii) The Plaintiffs alleged that there was a concluded Reseller’s Agreement between MCAT and Celcom whereby MCAT was to resell Celcom’s Application and Network Services and to launch a prepaid package using Celcom’s network, name, trade mark, logo and information (‘the Agreement’). Celcom’s position is that there is no such concluded agreement.

(iii) The Plaintiffs stated that in breach of the Agreement, Celcom made official press statements and press releases denying that it had any contractual relationship with MCAT.

(iv) The Plaintiffs claimed that the statements in the Articles are allegedly defamatory of them.

(v) The Plaintiffs alleged that the statements allegedly made by Celcom in the Articles (essentially to the effect that there is no contractual relationship between MCAT and Celcom) are defamatory of them.

3. Financial and operational impact on the Group and Expected losses, if any, arising from the summons

Our solicitors advised that Celcom has a good defence to the claims and that the Plaintiffs' claims for damages are grossly exaggerated. The expected losses are in the form of legal fees and incidental expenses in contesting the Plaintiffs' claims (to the extent not claimable from the Plaintiffs), which cannot be quantified at this moment.

Query Letter Contents :

We refer to your announcement dated 14 December 2005 in respect of the
aforesaid matter.
In this connection, kindly furnish the Securities Exchange immediately with the
following additional information for public release: -
1) The interest rate on the amount claimed for.
2) The details of default or circumstances leading to the filing of the
summons.
3) Financial and operational impact on the group, arising from the summons.
4) Expected losses, if any, arising from the summons.

Yours faithfully

TAN YEW ENG
Sector Head, Issues & Listing
Group Regulations
TYE/NMA copy to:- Securities Commission (via fax)