Statement re. Suspension

Berkeley Berry Birch PLC
01 December 2005


                            BERKELEY BERRY BIRCH PLC
                                        
                  SUSPENSION OF TRADING IN THE COMPANY'S SHARES
                                        
                           UPDATE ON CURRENT TRADING,
                                        
        FSA INVESTIGATION INTO BIA AND THE REGULATORY CAPITAL SHORTFALL
                                        
                              PROPOSED FUNDRAISING
                                        
                                  BOARD CHANGES
                                        
                        APPOINTMENT OF FINANCIAL ADVISER

The Board of Berkeley Berry Birch PLC ('BBB' or the 'Company'), the financial
services distribution group, announces today that it has requested the temporary
suspension of trading in its shares with immediate effect pending clarification
of its financial position.

The Company is also able to announce an update on current trading; the outcome
of the FSA investigation into sales of life and regular savings products by
Berkeley Independent Advisers Limited ('BIA'); and progress in addressing its
regulatory capital shortfall and future working capital requirements.

On 29 July 2005, the Financial Services Authority ('FSA') issued decision
notices cancelling the permissions of three of BBB's regulated businesses due to
regulatory capital shortfalls. The Company has referred these decision notices
to the Financial Services and Markets Tribunal ('FSMT') and is working on
proposals to rectify the regulatory capital shortfalls by means of planned
disposals and an equity fundraising. These plans are well advanced but, to date,
the FSA has not yet satisfied itself of the adequacy of these proposals.

Pending resolution of these issues the Company considers that trading in its
shares should be suspended. Further details are set out below.


Information on BBB and Current Trading

BBB currently operates through four independently regulated financial services
businesses. These are:

(1)         BIA, a network of independent financial advisers;
(2)         Berry Birch & Noble Financial Planning Limited ('BBNFP'), largely a
            directly employed sales force;
(3)         Berry Birch & Noble Financial Planning (Weston) Limited ('Weston'),
            largely a self-employed sales force; and
(4)         Berry Birch & Noble Insurance Brokers Limited ('BBNIB'), the Group's
            insurance broking subsidiary.

In the year ended 31 March 2005, BBB reported an audited consolidated operating
loss before goodwill amortisation and impairment and other operating exceptional
items of £1.6 million on turnover of £67.3 million. As at 31 March 2005, the
Group had equity shareholders' funds of £3.8 million (under UK GAAP). Since the
year end, trading has continued to be difficult and the Group's interim results
for the six months ended 30 September 2005, which are expected to be issued in
December 2005 and will be reported under International Financial Reporting
Standards ('IFRS'), will show continuing losses at an operating level,
principally as a result of difficult trading conditions within its Financial
Services Division. These businesses are currently the subject of enforcement
action by the FSA as set out below and this has affected their ability to trade
profitably. Once these issues are resolved, the Company believes it can
stabilise the trading performance of these businesses.

The Group's interim statements will also show a reduction in equity
shareholders' funds, largely because of the requirement under IFRS to recognise
the deficit in respect of the Group's defined benefit pension scheme (which as
at 31 March 2005 was £3 million as calculated under FRS17) as a liability on the
Group's balance sheet.


Update on regulatory capital position

As previously announced on 25 April 2005, the FSA started formal regulatory
enforcement action against BIA, Weston and BBNFP (the Group's 'Regulated FS
Businesses'). These businesses had not maintained adequate regulatory capital
resources and had therefore breached Threshold Condition 4 of their
authorization. The Company had notified the FSA about this situation earlier in
the year. At 30 September 2005, the Regulated FS Businesses had a combined
capital resource shortfall of £10.9 million, based on their un-audited FSA
returns.

The Regulated FS Businesses do not hold client money and the Board believes that
the enforcement process has not risked client assets. The Company has worked
with the FSA at all times throughout its investigation while seeking an
acceptable solution to this shortfall.

However, on 29 July 2005 the FSA decided to issue decision notices to cancel the
permissions of the Regulated FS Businesses. The businesses referred this
decision to the FSMT on 25 August 2005 ('References') and the FSA has
subsequently applied to have the References struck out. The Company believes
that the References will proceed to a full hearing which it would anticipate
taking place in the New Year.

A hearing of the FSMT to consider the FSA's motion to dismiss the References was
held on 29 November 2005 and will continue on 8 December 2005.


Update on FSA investigations

The Board can also report that the FSA's investigation into the selling of some
regular savings plans and whole of life plans by network members of BIA between
December 2001 and September 2004, has now concluded with a public censure of
BIA. This investigation identified certain management and procedural
shortcomings in BIA. The BIA management concerned are no longer with the Group
and the Board has taken steps to prevent this problem from reoccurring.

The FSA were to impose a fine of £425,000 on BIA. However BIA's limited
financial resources and the FSA's desire to ensure that customers are
compensated in accordance with the past business review has led to a public
censure being imposed instead.

BIA is now undertaking a limited ''past business review'' to consider advised
sales of these products. PricewaterhouseCoopers LLP has been appointed to
oversee the review and report back to the FSA. In the event that any unsuitable
advice has been given, causing a loss to be incurred, appropriate redress will
be paid. It is difficult to quantify its financial impact on the Group at this
early stage in the review however, BIA has estimated that the total consumer
loss could be between £500,000 and £1,000,000. The cost of this review including
possible compensation for all consumers affected has been provided for in the
Company's accounts for the year ended 31 March 2005.

Unfortunately the Board must now report that the FSA has commenced a further
investigation, into BBNIB. The FSA are investigating a breach of the FSA's
client money rules and the lack of systems and controls in relation to the
handling of client money. Many other UK insurance brokers have had difficulty in
interpreting and implementing the complex new client money rules which took
effect earlier this year. The FSA is also investigating the speed with which the
breach of the client money rules was communicated to the FSA. The Board believes
that BBNIB acted swiftly to bring the breaches to the attention of the FSA, took
immediate steps to address the issues relating to the handling of client money.
Independent auditors have confirmed to BBNIB that at no time did any risk of
loss of client money arise. Furthermore, given the limited extent to which BBNIB
handles client money, it has already taken the decision to cease handling client
money.


Proposed fundraising

The Board has been seeking to address the regulatory capital shortfall in its
three regulated FS businesses since it first became aware of the shortfall in
March 2005. It has considered several possibilities but concluded that a sale of
any business in its entirety is not in the best interests of Shareholders,
although certain business lines within BBNIB are capable of being sold to raise
capital for the Group. These are being actively pursued.

The Board is progressing an equity fund raising that the Directors believe will
be sufficient to resolve the regulatory capital shortfall in the Regulated FS
Businesses. Discussions are in an advanced stage and it is likely that a number
of directors and senior managers of the Group will take part in this proposed
fundraising.

The Board will keep shareholders informed of progress in relation to the
proposed fundraising so far as practicable. It is believed that once this fund
raising is completed the Company will be able to resolve its regulatory capital
shortfall. The FSA is required to satisfy itself as to the adequacy of these
proposals. The Company is in active discussions with the FSA on the proposals
and it is hoped that, if a successful conclusion of these discussions is
reached, the Company will be in a position to apply to have its securities
restored to trading.


Board changes

On 5 October, the Board announced the appointment of Jonathan Hall as a
non-executive Director. Jonathan is an experienced corporate financier and has
been closely involved in the Company's restructuring and capital raising plans.

The Company has today announced a further strengthening of the Board with the
appointment of Andrew Shortis as Group Managing Director with immediate effect.
A specialist in corporate turnaround, Andrew brings considerable experience of
growing thriving, profitable businesses.

The Board also announces that John Joyce, the Company's senior independent
director, has been appointed Non-Executive Chairman.

Cliff Lockyer will remain on the BBB Board as Group Enterprise Director.

Nick Davenport, who joined the Board as Executive Director in March 2005 to
develop the insurance broking business, has stepped down from the BBB Board, but
will continue his relationship with the Group as Non-Executive Chairman of
BBNIB.


Appointment of Financial Adviser

The Board of BBB today also announces the appointment of Arden Partners Limited
as its financial adviser.


Enquiries:

BBB plc
Jonathan Hall                                before 9a.m.  0121 632 2192
                                             after 9a.m.   02476 232010

Arden Partners
Andrew Raca, Director, Corporate Finance                   0121 423 8941




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