KUALA LUMPUR (Oct 6): Iconic Medicare Sdn Bhd (IMED), a wholly-owned unit of Iconic Worldwide Bhd, has filed its defence and counterclaim against Latex Form Sdn Bhd (LFSB), asserting that LFSB fundamentally breached the contract regarding the purchase and fabrication of six units of glove-dipping machines at IMED's Batu Kawan factory, valued at RM38.28 million.
IMED counterclaimed for damages exceeding RM25 million, according to Iconic Worldwide’s filing on Friday.
LFSB, a company involved in the fabrication and installation of machines in the rubber industry, had failed to complete and deliver machine numbers 3 to 6 as stipulated in the contract, said the group.
The group also highlighted that machines number 1 and 2, which were delivered late, had numerous problems and defects and LFSB failed to rectify these problems despite multiple requests by IMED.
“As such, IMED had mounted a counterclaim for declaratory reliefs as well as for damages for the various losses and damage suffered totalling more than RM25 million. IMED had also filed an application to transfer the proceedings to the Penang High Court”," said Iconic Worldwide.
“The matter has been fixed for case management on Oct 20, 2023 (for the main suit) and Nov 21, 2023 (for the transfer application). The board will make further announcements on any material development of the case in due course,” it added.
To recap, IMED appointed LFSB to fabricate and install the six units of glove-dipping machines in March 2021.
In August, LFSB claimed RM15.04 million from IMED, comprising RM11.04 million as outstanding amount for alleged work on the glove-dipping machines, RM1.6 million being the amount forfeited by suppliers due to contract termination, and RM2.4 million in an alleged payment by LFSB to IMED.
Iconic Worldwide said that LFSB 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.
Iconic Worldwide's share price closed unchanged at 11.5 sen on Friday, with a market capitalisation of RM64.67 million.