KUALA LUMPUR (Aug 18): Property developer Iconic Worldwide Bhd, which sought to diversify into glove making during the height of the Covid-19 pandemic, is facing a lawsuit over a dispute concerning the installation of glove-dipping machines in its factory.
Iconic Worldwide said its wholly-owned subsidiary, Iconic Medicare Sdn Bhd (IMED), is being sued by Latex Form Sdn Bhd, a company involved in the fabrication and installation of machines in the rubber industry.
In March 2021, IMED appointed Latex Form to fabricate and install six units of glove-dipping machines at a total cost of RM38.28 million, said Iconic Worldwide in a bourse filing on Friday (Aug 18).
Latex Form is now claiming RM15.04 million from IMED, comprising RM11.04 million as outstanding amount owed for work allegedly carried out on the glove-dipping machines, RM1.6 million being the amount forfeited by suppliers due to IMED's action of terminating the contract, and RM2.4 million allegedly paid by Latex Form to IMED by agreement.
According to Iconic Worldwide, Latex Form allegedly delayed the handover of the first two units of the machines, and failed to complete the installation of the remaining four units despite being given an extension of time. IMED then terminated the contract for the installation of the remaining four units in April this year.
"The failure of the plaintiff (Latex Form) in completing the installation of the first and second machines on time and without defects, and the failure to complete the installations of the remaining four units has caused IMED extensive loss of business during the height of the Covid pandemic," said Iconic Worldwide.
It added that the RM15.04 million claimed is substantial and may have a material impact on its financial results and net assets for the financial year ending March 31, 2024.
"IMED is seeking legal advice to defend the frivolous claim made by the plaintiff," said Iconic Worldwide.
Iconic Worldwide's share price closed unchanged at 12 sen, giving the group a market capitalisation of RM67 million.