Argus Corporation Limited: Status Update Report.

TORONTO -- Argus Corporation Limited ("Argus") (TSX:AR.PR.A)(TSX:AR.PR.D)(TSX:AR.PR.B) today provided a status update of developments since its last Status Update Report was filed on January 7, 2005.

Argus is providing updates on its affairs on at least a bi-weekly basis (each a "Report"). These Reports are being made in accordance with certain guidelines of the Ontario Securities Commission (the "OSC") until Argus is able to meet its public filing obligations.

These guidelines are pursuant to the Management and Insider Cease Trade Order that was issued by the OSC on June 3, 2004 with respect to the management and insiders of Argus.

Argus' Status Update Reports that have been filed since the Order are available to review at www.sedar.com.

The Report further provides certain financial information and an update as to the preparation and filing of financial statements and other related matters by Argus.

Argus owns or controls 61.8% of the Retractable Common Shares ("Common Shares") of Hollinger Inc. ("Hollinger"). Hollinger in turn owns 68% of the voting shares and 18.2% of the equity of Hollinger International Inc. ("International").

As the shares Argus owns of Hollinger are the primary asset held by Argus and the shares of International in turn are the primary asset held by Hollinger, this Report includes certain updates regarding each of Hollinger and International.

Hollinger and International have both also been subject to Management and Insider Cease Trade Orders for their failure to file financial statements and related reports when required. Those orders were issued on June 1, 2004.

Current Status of Financial Reporting

International's Current Financial Reporting

International filed its Form 10-K with its audited financial statements for the fiscal year ended December 31, 2003 ("2003 10-K") with the U.S. Securities and Exchange Commission ("SEC") on January 18, 2005. The 2003 10-K includes restated audited financial results for the fiscal years ended December 31, 1999, 2000, 2001 and 2002.

International stated on January 18, 2005 that the restated financial results were to correct accounting errors in prior periods and to reflect reclassifications arising from the adoption of a new audit standard.

Those statements may be reviewed online at www.hollingerinternational.com in the Financial Info section or at www.sec.gov.

Hollinger's Current Financial Reporting

Hollinger has been unable to prepare and file its audited financial statements for 2003 and its related Management's Discussion and analysis ("MD&A) as generally accepted accounting principles ("GAAP") require consolidation with those of International.

Hollinger has therefore also been unable to prepare its statements for the first three Quarters of 2004 and the related MD&As.

Argus' Current Financial Reporting

Argus filed its 2003 audited financial statements on a market valuation basis as it had done historically which was then in compliance with GAAP.

However, Argus is now required to consolidate its financial statements with those of Hollinger for fiscal periods beginning after January 1, 2004 due to a change in GAAP.

As a result of the change in accounting policy and as Hollinger has not prepared its financial statements for each of the first three Quarters of 2004, Argus has been unable to prepare financial statements in compliance with GAAP for each of those Quarters. Argus has instead provided its Reports pursuant to the Order.

In order to inform the marketplace of key economic developments, Argus has additionally prepared and released financial statements for the first three Quarters of 2004. These statements have been presented as alternative financial information and were appended to its Reports dated August 19 and November 12, 2004.

These statements may be reviewed online at www.sedar.com.

Future Financial Reporting

In order for each of International, Hollinger and Argus to normalize its financial reporting and to have its respective Management and Cease Trade Order lifted, they each need to prepare and file their financial statements as required by GAAP and related MD&As.

International's Future Financial Reporting

International stated on January 18, 2005 that it intended to file its financial statements for the first three Quarters in 2004 with the SEC within two months and that it will be working expeditiously to file its financial statements for the fiscal year ended December 31, 2004 on a Form 10-K (the "2004 10-K").

International stated that its 2004 Form 10-K is due to be filed with the SEC on March 16, 2005 but that it intended to file a request with the SEC for a fifteen-day extension to March 31, 2005. International noted, however that it may not be able to complete and file its 2004 10-K by March 31, 2005 due to the anticipated work involved in the audit.

International announced that appropriate filings with respect to these financial statements would be made on Forms 10-K, 10-Q and 8-K with the U.S. Securities and Exchange Commission (the "SEC") and in Canada.

Hollinger's Future Financial Reporting

On January 11, 2005, Hollinger announced that its Audit Committee would, following the filing by International of its financial statements, consider what, if any, additional financial information and/or alternative financial statements Hollinger will be in a position to publish and/or complete as a consequence of International's filing.

On December 31, 2004, Hollinger had announced that the filing by International of its 2003 Annual Report and its 2004 quarterly reports is a necessary but not sufficient condition to permit Hollinger to complete and file its financial statements for the same periods.

Hollinger further noted on December 31, 2004 that the completion and audit of its financial statements will require a level of co-operation from International and its auditors and that negotiations in this respect were continuing.

Argus' Future Financial Reporting

Argus will be unable to prepare financial statements consolidated with those of Hollinger and bring its financial reporting up to date until Hollinger has prepared its financial statements. Argus is however unable to determine when it may complete its financial statements consolidated with those of Hollinger.

Argus' intention is to prepare consolidated financial statements with those of Hollinger as soon as practicable after Hollinger files its statements.

Argus presently contemplates, however, that it will need to continue to file additional financial statements that are not consolidated with those of Hollinger for 2004 and for current and upcoming financial periods on an alternative financial basis.

Financial Position of Argus

Argus had Cdn. $181,137 of cash as of the close of business on January 21, 2005.

Argus indirectly owns 21,596,387 Retractable Common Shares of Hollinger (each a "Share") with a market value at the close of trading on January 21, 2005 on the Toronto Stock Exchange of Cdn. $6.32 per share or an aggregate of Cdn. $136,489,166.

The market value of its shareholdings is subject to the minority interest of The Ravelston Corporation Limited ("Ravelston"), the parent of Argus. 11,862,342 of the Shares, being approximately fifty-five percent of the Shares, are owned by a subsidiary of Argus in which Ravelston has a significant minority interest.

The amount of that minority interest was stated to be $20,585,670 in the financial statements that Argus publicly filed as alternative financial information as at September 30, 2004.

Argus has further set out a liability for an amount on account of future income taxes on unrealized net capital gains. The amount of that liability was stated to be $14,793,176 in Argus' alternative financial information as at September 30, 2004 when the value of its investment in Shares was $86,385,548.

Dividends

Argus announced on January 10, 2005 that it had declared regular quarterly dividends to be paid on February 1, 2005 to the holders of record of its Class A and Class B Preference Shares at the close of business on January 20, 2005.

The dividends to be paid are respectively Cdn. 62 1/2 cents per share on the Class A Preference Shares $2.50 Series, Cdn. 65 cents per share on the Class A Preference Shares $2.60 Series and Cdn. 67 1/2 cents per share on the Class B Preference Shares 1962 Series.

The Ravelston Corporation Limited ("Ravelston"), the parent of Argus, has agreed to provide a loan to Argus for Cdn. $251,703, the amount of the dividends to be paid by Argus on February 1, 2005, so that these dividends could be declared and paid. The loan is to be made by Ravelston on an interest-free basis on or about January 31, 2005 pursuant to a Promissory Note and will be repayable on February 28, 2006.

Ravelston holds all of the Common Shares and Class C Preference Shares of Argus and 2,900 of Argus' 55,893 issued Class A Preference Shares $2.60 Series.

Argus will require additional funds to be able to continue to pay future dividends on its Class A and Class B Preference Shares on an uninterrupted basis, including an additional amount of approximately Cdn. $251,703 for dividends that are scheduled to be paid on May 1, 2005.

Argus intends to make efforts to ensure that such dividend payments can be made on May 1, 2005 and continue to be made thereafter on an uninterrupted basis.

New Director of Argus

Argus today announced that James A. ("Jay") Richardson of Toronto, Ontario has been appointed as a director of Argus and a member of its Audit Committee.

Mr. Richardson is a Canadian Chartered Accountant who has served as a partner of Clarkson Gordon (now Ernst & Young), a Canadian accounting firm. He has also served as a partner of two other accounting firms including as a Singapore partner of Arthur Young in Insolvency, Corporate Finance and Forensic Accounting and as a United Kingdom partner of KPMG to start their Continental European corporate recovery practice.

Since his return to Toronto, Mr. Richardson has conducted a private practice including turnaround and process management services, including having acted as a consultant for Hollinger between August, 2004 and early January, 2005.

Mr. Richardson has served as an Officer or Director of several public companies including having serviced as the Interim Chief Executive Officer of Plaintree Systems Inc. He is presently a member of the Board of Directors of three other public companies and several private companies and charitable organizations.

Proposed Privatization of Hollinger

Ravelston proposed a going private transaction involving Hollinger on October 28, 2004.

The proposed going private transaction is to be structured as a share consolidation and retirement of Hollinger's shares held by parties other than Argus and Ravelston directly and indirectly.

On November 16, 2004, Ravelston announced that it will support the proposed privatization on the basis that holders of Shares (other than Ravelston and certain of its affiliated entities including Argus) would receive Cdn. $7.25 in cash for each Share held by them and holders of Series II Preference Shares of Hollinger (each a "Series II Share") would receive 0.46 of a share of Class A Common Stock of International for each Series II Share held by them.

The Hollinger going private transaction would result in Argus holding a greater percentage of the Shares of Hollinger. Hollinger would then be a private company without the public company liquidity that currently exists.

No further terms have yet been announced.

Argus will review and consider whether the terms of the proposal are acceptable when they are announced. Argus' Independent Committee comprised of Jonathan H. Marler and Robert E. Tyrrell will retain such independent professional advisers as it deems necessary and make recommendations to the Board of Directors of Argus.

Hollinger's Financial Position

Cash

Hollinger announced on January 11, 2005 that it and its subsidiaries (excluding International and its subsidiaries) had approximately US $10.23 million of cash or cash equivalents at the close of business on January 7, 2005.

Hollinger reported on January 11, 2005 that it continued to have approximately US $10.5 million of cash deposited as collateral for its borrowings and that it is entitled to apply this amount towards future interest payments on certain secured borrowings.

In addition, Hollinger was to receive dividends from International in the aggregate amount of approximately US $40,218,953.65 that International announced that it had paid on January 18, 2005.

Retractions

Hollinger commenced honouring retractions of its Series II Shares on October 28, 2004. Such retractions are effected by Hollinger delivering .46 of a share of Class A Common Stock of International to the holder of the Series II Shares being retracted in exchange for each retracted Series II Share.

In the period since October 28, 2004 until January 11, 2005, Hollinger has delivered 9,637 shares of Class A Common Stock of International pursuant to the retractions of its Series II Shares.

On January 20, 2005, Hollinger announced that its retraction price of its Shares was Cdn. $4.65 per share as of January 21, 2005, a reduction from the retraction price of Cdn. $7.25 for the Shares announced on August 18, 2004. Retractions of Hollinger's outstanding Shares submitted after May 31, 2004 continue to be suspended until further notice.

Shareholdings

Hollinger announced on January 11, 2005 that it directly or indirectly owned 782,923 shares of Class A Common Stock and 14,990,000 shares of Class B Common Stock of International as at January 7, 2005.

Based on the closing price of the Class A Common Stock of International on the New York Stock Exchange (the "NYSE") at the close of business on January 21, 2005 of US $14.75 and the number of shares of Class A Common Stock and Class B Common Stock of International owned by Hollinger at January 7, 2005, the market value of Hollinger's direct and indirect holdings in International is US $232,650,614.

Security Given

All of Hollinger's interest in the shares of Class A Common Stock of International is being held in escrow with a licensed trust company in support of future retractions of its Series II Shares.

All of Hollinger's interest in the shares of Class B Common Stock of International is pledged as security in connection with US $78 million of Senior Secured Notes and US $15 million of Second Priority Notes issued by it.

Hollinger announced on January 10, 2005 that none of the Special Dividend is required to be lodged as collateral security for the Senior Secured Notes and Second Priority Notes at that time. Subsequently, Hollinger entered into an escrow arrangement with the SEC respecting these funds on January 14, 2005. Please refer below to the section entitled SEC Escrow.

Current Excess of Collateral to Certain Security

On January 11, 2005, Hollinger announced that, on the basis of the closing price of the Class A Common Stock of International on the NYSE on January 7, 2005 of US $15.07 per share and its cash position at December 24, 2004, it then had in excess of US $236.3 million aggregate collateral securing the US $78 million principal amount of the Senior Secured Notes and the US $15 million principal amount of the Second Priority Notes that were outstanding.

Dividends

Shareholders of International as at January 3, 2005, including Hollinger, were to receive two dividends that were to be paid on January 18, 2005 to the holders of its Class A and Class B Common Stock.

The dividends to be received by Hollinger were to include a regular quarterly dividend of US $0.05 per Class A and Class B share of International estimated to be an aggregate of US $786,646.15 and a special dividend of US $2.50 per Class A and Class B share (the "Special Dividend") estimated to be an aggregate of US $39,432,307.50.

International announced on January 18, 2005 that it had paid those dividends on that date.

The Special Dividend that was to be paid to all holders of International's Class A and Class B shares was intended to distribute approximately US $227 million of the net proceeds from the sale of International's Telegraph properties after the repayment of certain debt and taxes (the "Proceeds").

International had announced on December 16, 2004 that it would be returning a total of approximately US $500 million of the Proceeds to its shareholders as part of the Strategic Process that it announced in November, 2003.

International further stated on December 16, 2004 that the balance of approximately US $273 million after the Special Dividend will likely be distributed through a buy-back of its Class A Common Stock.

International then announced that it might also consider another special dividend instead of the share buy-back. It further stated, however, that there is no assurance that the second distribution will be made and, if made, whether it will be a special dividend or tender offer and what would be the terms of any such tender offer.

The final decision on whether such a tender offer will be made is to be deferred until after International files its 2003 annual audited statements, the first three quarterly reports for 2004 and a pro forma financial statement following the sale of the Telegraph properties.

International has further stated that it will continue to hold following these distributions "sufficient cash to fund our operations and obligations and to avail ourselves of strategic opportunities".

Expiration of Delaware Injunction

International and Hollinger had earlier agreed that the injunction granted by Vice-Chancellor Leo E. Strine in Delaware on February 26, 2004 limiting Hollinger's control of International is to be extended beyond its original October 31, 2004 expiration date.

The injunction is now to expire on the earlier of the date the Proceeds have been distributed to International's shareholders and January 31, 2005. The injunction is accordingly expected to expire on January 31, 2005.

Further Agreement Between Hollinger and International

International has further agreed not to block any payment to Hollinger unless required by a court order (which it will not seek), statute or regulation. There is to be no reduction or set-off.

Any payment to be received by Hollinger is to be proportionate to its shareholdings of International or, in the case of a self tender, to the number of shares tendered.

Hollinger Inspection

The Inspector continues to inspect Hollinger's related party transactions pursuant to an order of Justice Campbell made pursuant to s. 229(1) of the Canada Business Corporations Act. It has now provided five interim Reports to the Court with respect to its inspection of Hollinger's related party transactions.

Counsel for Ernst & Young Inc. as the court-appointed inspector of Hollinger ("the Inspector") and various parties, including individuals that the Inspector wishes to examine, last appeared before Justice Colin L. Campbell of the Superior Court of Justice of Ontario (the "Court") on January 11, 2005.

A Motion of the Inspector in writing with respect to an electronic inspection process is presently being considered by Justice Campbell. The next Hearing before him is presently anticipated to be held on February 9, 2005. The Inspector is anticipated to provide an updated report to the Court before then.

The Inspector has been given Orders to examine two former Directors of Hollinger, Peter Y. Atkinson and Maureen Sabia. Other persons including Peter G. White, a Director of Hollinger, have voluntarily agreed to be examined.

The Inspector wishes to examine other former Directors of Hollinger including Lord Black, Barbara Amiel-Black, F. David Radler and J.A. Boultbee who are current Directors of Argus though there has been no determination of that issue as yet.

Argus is cooperating with the Inspector in connection with its inspection of Hollinger and has provided access to the Inspector to its documents and records.

SEC Escrow

On January 14, 2005, Hollinger announced that certain of the funds that it was to receive from International on account of the Special Dividend and any further distribution from the proceeds of the sale of The Telegraph Group were to be placed in escrow as part of its settlement discussions with staff of the SEC relating to the action commenced by the SEC against Hollinger and its former Directors and senior executives, Lord Black and Mr. Radler (the "SEC Action").

Hollinger stated it had voluntarily agreed to enter into an arrangement whereby it will deposit (i) the net amount to be received by it directly and indirectly from the Special Dividend payable on January 18, 2005, and (ii) the net amount of any subsequent distribution made by International of the Proceeds, if any, subject to any overriding rights of the holders of Hollinger's outstanding Senior Secured Notes, into an escrow account with a licensed trust company.

The escrow will terminate upon the conclusion of the SEC Action with respect to all parties.

Hollinger stated that the escrow arrangements will provide that it will have access to the escrowed funds for ordinary business and certain other purposes, including (i) payment of principal, interest, premium and fees, if any, on or relating to its indebtedness for borrowed money, (ii) payment of dividends on its preferred shares, (iii) any buy-back of its shares held by parties other than those related to Ravelston, and (iv) any acquisition of assets other than from Ravelston and certain of its affiliates.

Hollinger further stated that the escrow is subject to it and the SEC agreeing to a mutually-acceptable termination date for the escrow should they be unable to reach an overall settlement of the SEC Action as against Hollinger in the near future.

Hollinger has agreed to provide staff of the SEC with a reasonable opportunity to assert any rights that it may have with respect to the escrowed funds if a termination of the arrangement is to occur.

International's Litigation Developments

International filed its Second Amended Complaint in Illinois on October 29, 2004 as against Hollinger, Ravelston and RMI, certain of their current and former directors and officers and others.

The total amount sought by International pursuant to the Second Amended Complaint is approximately US $542 million including US $117 million of pre-judgment interest at the time of filing together with costs.

The defendants Motion to dismiss the Second Amended Complaint of International is presently before Judge Blanche Manning of Illinois to decide. It is anticipated that she will be making that ruling in writing.

The next Status Hearing with respect to that matter is scheduled to be held on February 25, 2005.

International has further appealed the dismissal of its previous Complaint that included allegations pursuant to the Racketeer and Corrupt Influenced Organizations Act. This matter is also to be decided by Judge Manning.

Second Amended Consolidated Complaint

Answers or Motions to Dismiss are due to be filed on January 24, 2005 by the defendants to the Consolidated Second Amended Complaint, a consolidated class action complaint filed in Illinois.

In February and April of 2004, three Class Action Complaints were filed in Illinois as against numerous defendants including International, Hollinger, Ravelston, Ravelston Management Inc. and Argus and certain of their Directors and Officers, KPMG and others.

Those three Complaints were then consolidated into the Consolidated Amended Complaint on July 2, 2004.

That Consolidated Amended Complaint was then amended again as the Second Amended Consolidated Complaint. It was filed in Illinois on November 19, 2004.

Other International Developments

International announced on January 18, 2005 that it anticipates holding an Annual Meeting of Shareholders in June, 2005 to review matters in 2003 and 2004. It stated that it would send out proxy-related materials at an appropriate time after it had filed its 2004 10-K with the SEC.

For additional information on developments respecting International, reference can be made to its online public filings at either www.hollingerinternational.com or http://www.sec.gov/edgar.shtml.

Other Hollinger Developments

Hollinger has been given an extension until January 31, 2005 by the Court for a date by which it is to hold its Annual General Meeting.

For additional information on developments respecting Hollinger, including a more-detailed review of the terms of the proposed share consolidation and privatization, reference can be made to its public filings online at www.hollingerinc.com, www.hollinger.com or www.sedar.com.

There has been no other material change from the information contained in the Status Update Report of Argus issued on January 7, 2005.

ARGUS CORPORATION LIMITED (TSX:AR.PR.A) (TSX:AR.PR.D) (TSX:AR.PR.B)