BRT/BRN - Brimstone - Information relating to House of Monatic taking steps to

BRT/BRN - Brimstone - Information relating to House of Monatic taking steps to  
minimise risk exposure in one of its subsidiaries and cautionary announcement   
Brimstone Investment Corporation Limited                                        
(Registration number 1995/010442/06)                                            
(Incorporated in the Republic of South Africa)                                  
ISIN Number:   ZAE000015277   Share Code: BRT                                   
ISIN Number:   ZAE000015285   Share Code: BRN                                   
("Brimstone" or the "Company")                                                  
Information relating to House of Monatic taking steps to minimise risk exposure 
in one of its subsidiaries and cautionary announcement                          
House of Monatic , a wholly-owned subsidiary of Brimstone, has applied to the   
High Court to liquidate its interests in Fifth Element Marketing (Pty) Ltd      
("Fifth Element") - the clothing design and wholesale business which owns       
fashion and sportswear supplier Canterbury International SA (Pty) Ltd and surf- 
wear and fashion brand, O`Neill SA ("collectively the businesses").             
The businesses - like many other businesses in the clothing industry have been  
faced with challenges despite receiving funding, commitment and support from    
House of Monatic.  Evidence of possible financial irregularities perpetrated in 
the businesses was recently uncovered during an ongoing co-operative            
investigation by House of Monatic and the South African Revenue Services (SARS).
These irregularities appear to have been the cause of the current financial     
position in which liabilities exceed the assets within these three entities.    
House of Monatic has therefore been left with no alternative but to liquidate   
the entities concerned.  This action is being undertaken in order to protect the
interests of all stakeholders.                                                  
The acquisition of Fifth Element Marketing and O`Neill SA was made in 2006 and  
formed part of a strategy to expand the capabilities and competitiveness of 100 
year-old House of Monatic whilst enhancing its transformation from a            
commoditised clothing supplier into a leading fashion brand house.              
Iqbal Khan, House of Monatic Group Chief Executive Officer said, "the findings  
of our preliminary investigations are of such a serious nature that we needed to
act firmly and responsibly in accordance with our corporate governance          
disciplines. The investigations are continuing and House of Monatic and its     
subsidiaries are co-operating fully with SARS.  We intend to pursue our rights  
in criminal and civil law to the full extent, should the investigation affirm   
the allegations of impropriety"                                                 
Given the nature of Brimstone`s business as an investment holding company and   
the liquidation process to follow, the financial impact of the liquidation of   
the three companies on the net asset value of Brimstone`s investment portfolio  
at 31 December 2008 is unclear but not expected to be material while the impact 
on earnings for the year ended 31 December 2008 is not quantifiable at this     
stage. Shareholders are therefore advised to exercise caution when dealing in   
Brimstone securities until the Company is able to provide its shareholders with 
further information. The businesses collectively contributed a loss of 11.7     
cents per Brimstone share for the six months ended 30 June 2008 and reflected a 
negative net asset value of 14.9 cents per Brimstone share at 30 June 2008.     
Of concern to Brimstone is the impact on, and potential job losses to, employees
of Fifth Element and its subsidiaries.  House of Monatic is actively seeking    
ways in which these jobs could potentially be saved.                            
"Although this recent action has impacted on our aspirations to refocus our     
energies on building the capabilities and growing the brands within House of    
Monatic, it has not diminished our mission of realising our  values, to be      
profitable, empowering and to have a positive social impact over the longer-    
term", said Khan.                                                               
Cape Town                                                                       
30 January 2009                                                                 
Sponsor                                                                         
Nedbank Capital                                                                 
Date: 30/01/2009 16:58:01 Supplied by www.sharenet.co.za                     
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