KUALA LUMPUR (May 15): GDB Holdings Bhd’s unit filed a fresh lawsuit against KSK Land Sdn Bhd, claiming an outstanding sum of RM102.08 million in relation to the corporate guarantee KSK Land made in August last year.
GDB’s wholly-own Grand Dynamic Builders Sdn Bhd had filed a writ of summons and statement of claim in the High Court here against KSK Land, according to a stock exchange filing on Monday (May 15).
It said KSK Land, in the capacity of Damai City Sdn Bhd's (DCSB) holding company, executed a corporate guarantee in favour of Grand Dynamic Builders as a security for the observance and performance by DCSB of its obligations under the contracts and agreements executed between the two parties.
Apart from the RM102.08 million sum, the claim also includes 5% interest per annum, costs, and other relief as the court deems fit and proper to grant.
“Grand Dynamic Builders contends that KSK Land was in breach of its obligations under the corporate guarantee and/or in law when KSK Land failed, refused and/or neglected to honour the corporate guarantee and effect payment of the outstanding sum of RM102.08 million to Grand Dynamic Builders,” the filing read.
Grand Dynamic Builders in August last year suspended its works on KSK Land’s 8 Conlay project, and sued the latter for a sum of RM120.7 million arising from the corporate guarantee.
Nonetheless, the group lifted the suspension in January this year, and resumed the project's façade works on Tower A after receiving partial payment from DCSB.
In March, GDB withdrew the lawsuit with liberty to file afresh, and remobilised and recommenced construction works on Tower A after receiving further partial payment, while other sections of works remained suspended, according to the group’s latest annual report.
However, DCSB failed to pay the outstanding sum under instalment in April, and both parties were not able to reach a settlement consensus after discussions and negotiations that aimed to resolve the matter amicably.
Towards the second half of April, both parties served notices of determination against each other to end the contract, which was entered in November 2020 to award Grand Dynamic Builders as the main contractor, tasked with completing the remaining main building works for the 8 Conlay project that consists of a 10-storey podium, serviced residences, hotel and strata hotel suites.
Shares in GDB closed half a sen or 3.3% lower at 14.5 sen on Monday, giving it a market capitalisation of RM135.94 million.