KUALA LUMPUR: The Court of Appeal has ordered the claim by Kamdar Group (M) Bhd’s unit Kamdar Sdn Bhd (KSB) against its former chairman Bipinchandra Balvantrai and two others to be reheard before a different judge in the High Court.
The order was made upon an appeal by KSB against the High Court decision in June last year which dismissed its claim against Bipinchandra, former chief executive officer Jayesh Kamdar and contractor Yap Kim Hong over the alleged withdrawal of RM8.8 million from KSB’s account.
Kamdar Group, in a filing with Bursa Malaysia yesterday, said the Appeals Court has declared a mistrial and ordered the case to be remitted to the High Court for rehearing. No date for the rehearing was given.
The legal battle started after Bipinchandra’s failed attempt to remove Kamdar Group managing director Kamal Kumar Kishorchandra in 2013.
In April 2104, Kamdar Group appointed an independent firm of auditors to assist its audit committee to prove the alleged non-business withdrawal of RM8.8 million from KSB’s account.
The auditors concluded that there were four non-business withdrawals transactions amounting to RM8.84 million from March 23 to 26, 2005, by “two individuals who were former officers of Kamdar Group”.
KSB filed its claim in October 2014, alleging the RM8.8 million was used by Bipinchandra, Jayesh and Yap partly to purchase shares in Kamdar Group.
The High Court dismissed KSB’s claim and ordered the company to pay the three defendants RM60,000 each in costs.
The court noted that the accounting record showed the RM8.8 million was taken out of KSB as a loan to the group’s late founder, Harsukhlal Maganlal Kamdar.
The court said KSB suffered no loss as the deposits paid into its accounts were repayment for the loan taken by Harsukhlal.
The court ruled that the four payments taken out of KSB were a loan or advance taken by Harsukhlal, “hence there is no breach of fiduciary duty by Bipinchandra and Jayesh”.
Kamdar Group’s share price has been on the decline since 2014. It dropped 13.33% year-to-date to close at 32.5 sen yesterday.
The special apparel stores had reported a net loss of RM7.03 million for the fourth quarter ended December 31, 2015. The group attributed the loss mainly to the fair value loss on an investment property of about RM4.6 million.
The group’s latest financial results saw a 57.8% drop in net profit to RM2.08 million in the second quarter ended June 30, 2016, from RM4.92 million a year earlier.
Net profit for the first half of financial year 2016 also fell by 38.9% to RM3.90 million, from RM6.38 million in the previous corresponding period. This, the group said, was mainly due to the RM4.15 million attributed to an exceptional and non-recurrent insurance claim receipt from ordinary operational activities from the previous year’s results.