KUALA LUMPUR (Oct 11): The Court of Appeal has ordered the claim by Kamdar Group (M) Bhd’s unit, Kamdar Sdn Bhd (KSB), against 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 to dismiss 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 to Bursa Malaysia today, 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 Kamal Kumar Kishorchandra, Kamdar Group’s managing director, in 2013.
In April 2104, Kamdar Group appointed an independent firm of auditors to assist its audit committee in proving the alleged withdrawal of RM8.8 million from KSB’s account.
The auditors concluded there were four non-business withdrawals transactions, amounting to RM8.8 million, from March 23 to March 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 late founder of the group, 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 today.
The special apparel stores had reported a net loss of RM7.03 million for the fourth quarter ended Dec 31, 2015. The group attributed the loss mainly to fair value loss on an investment property of about RM4.6 million.
The group’s latest financial results saw a narrowed net profit of 57.8% 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 attributable to an exceptional and non-recurrent insurance claim receipt from ordinary operational activities from the previous year’s results.