The letter from Bursa Malaysia Securities Berhad dated 6 October 2009 in relation to the sharp increase in the Company's share price recently refers.

The Board of Directors of the Company, after having made due enquiry with the Directors and Major Shareholders, wishes to advise that, to the best of their knowledge and belief, they are not aware of any of the following that may have contributed to the unusual market activity:

1. any corporate development relating to KAWAN FOOD BERHAD Group's business and affairs that has not been previously announced that may account for the unusual market activity, including those in the stage of negotiation/discussion;
2. any rumour or report concerning the business and affairs of KAWAN FOOD BERHAD Group that may account for the unusual market activity;
3. any other possible explanation to account for the unusual market activity; and
4. any material information that requires immediate disclosure in accordance with Paragraph 9.03 of the Main LR.

This announcement is dated 6 October 2009.

We draw your attention to the sharp increase in price in your Company’s shares recently.

In accordance with the Corporate Disclosure Policy on Response To Unusual Market Activity pursuant to paragraph 9.11 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("Main LR"), you are requested to furnish Bursa Malaysia Securities Berhad ("Bursa Securities") with an announcement for public release after making due enquiry with your directors and major shareholders seeking the cause of the unusual market activity in the Company’s shares.

In this respect, you are also required to publicly confirm, amongst others, the following:-

1. whether there is any corporate development relating to your Group’s business and affairs that has not been previously announced that may account for the unusual market activity including those in the stage of negotiation / discussion. If yes, kindly provide the details including the status of the corporate development to enable investors to make informed investment decision;
2. whether there is any rumour or report concerning the business and affairs of the Group that may account for the unusual market activity and in this respect, you are required to comply with paragraphs 9.09 and 9.10 of the Main LR;
3. whether you are aware of any other possible explanation to account for the unusual market activity; and
your compliance with the Main LR, in particular paragraph 9.03 of the Main LR on immediate disclosure obligations.




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Please note that the contents of the announcement must be endorsed by the Board of Directors of the Company and the announcement must reach Bursa Securities immediately via Bursa LINK.





Yours faithfully






CHONG FUI TZY
Head, Issuers
Listing Division
Regulation

CFT/NAE