KUALA LUMPUR (Feb 22): Berjaya Assets Bhd has been sued by Violet Circle Sdn Bhd for RM97.6 million for pulling out of an agreement to acquire the remaining 50% stake in Sarawak gaming firm Megaquest Sdn Bhd.
Berjaya Assets and its wholly-owned unit Tropicfair Sdn Bhd were served with an originating summons from Violet Circle on Monday (Feb 21).
Tropicfair inked a share sale agreement with Violet Circle for the acquisition on July 12, 2016, but called off the deal in mid-2020.
Megaquest, according to reports on the transaction in 2016, was involved in investment holding and the operation of number forecast lotteries in Sarawak under the licence of the Sarawak Turf Club via Natural Avenue Sdn Bhd (NASB).
NASB was in turn the exclusive licensed agent for the Sarawak Turf Club's Special Cash Sweep Number Forecast Lotteries.
"By a letter from Tropicfair to the plaintiff dated June 12, 2020, Tropicfair had given notice to the plaintiff of rescission of the share sale agreement on the ground that the core operating business of Megaquest has been substantially impaired and the entire transaction as contemplated under the share sale agreement has suffered a material adverse change.
"Following the said rescission, as disclosed in the Annual Report 2020, the forfeited deposit and liquidated ascertained damages incurred in the company's consolidated financial statements totalled RM10.8 million. Under the circumstances, Tropicfair avers that it is not liable for payment of the said sum to the plaintiff," Berjaya Assets said in a bourse filing.
Berjaya Assets and Tropicfair "will vigorously defend and oppose any claims" by Violet Circle, it added.
Shares of Berjaya Assets rose half a sen or 1.82% to 28 sen, giving it a market capitalisation of RM716.28 million.