KUALA LUMPUR (July 27): Civil engineering specialist Sarawak Consolidated Industries Bhd (SCIB) has filed a lawsuit against Dynamic Prestige Consultancy Sdn Bhd and is seeking RM14 million in refunds previously paid to “explore business opportunities in the engineering, procurement, construction and commissioning (EPCC) sector”.
SCIB claimed that it had paid the sum “in tranches” to Dynamic Prestige between October and November last year.
“The defendant (Dynamic Prestige) in consideration, were to propose redeemable convertible preference shares (RCPS) in their company,” said SCIB in a stock exchange filing on Thursday (July 27).
The group said it has served a writ of summons to Dynamic Prestige via solicitors Messrs Halim Hong & Quek.
SCIB added that Dynamic Prestige had agreed via a letter dated March 7 this year, that the sum of RM14 million paid will be refunded should either party decide not to continue with the RCPS.
“As to date, the defendant has failed to refund the sum of RM14 million despite the plaintiff’s decision to not continue with the RCPS,” said SCIB.
SCIB said it has not impaired the amount owed by Dynamic Prestige so far, and the sum is subject to impairment review in the next reporting quarter.
“In any event, should the outstanding balances be fully impaired, the group gearing will be increased and earnings per share as well as net assets of SCIB will be reduced as a result of the impairment loss for the financial year ended June 30, 2023 (FY2023) and FY2024,” the group said.
In a separate statement, SCIB group managing director Ku Chong Hong said: "The initiation of this legal action is a necessary step to protect our company's interests and uphold our financial integrity. We have always operated with full adherence to our contractual obligations and expect the same level of commitment from our partners. We remain confident in our legal position and are committed to ensuring the best outcome for our shareholders and stakeholders."
At 2.35pm, shares of SCIB, which appreciated over three times year-to-date, were trading half sen or 1.14% lower at 43.5 sen, giving it a market capitalisation of RM278.5 million.