KUALA LUMPUR (Nov 12): Atlan Holdings Bhd's (KL:ATLAN) 75.53%-owned subsidiary Duty Free International Ltd (DFIL) (5SO.SI), which is listed on the Singapore Exchange, said it is not satisfied with the RM69.9 million compensation for two pieces of land in Bukit Kayu Hitam, Kedah, that Malaysia's Ministry of Home Affairs (KDN) has compulsorily acquired for a road construction project.
"Based on legal advice, the company (DFI) will only accept the award under protest and will file an objection by way of a land reference to the High Court in accordance with s.37 and s.38(1) of the Land Acquisition Act 1960 of Malaysia," DFIL executive director Lee Sze Siang said in a filing with the Singapore bourse's regulator on Tuesday.
A compulsory acquisition of land refers to a process by which the government acquires from private landowners their land, which is needed for any public purpose or for a purpose beneficial to the economic development of Malaysia.
Atlan had previously announced in October that two lands belonging to its two indirect wholly-owned units — Cergasjaya Sdn Bhd and Cergasjaya Properties Sdn Bhd (CPPA) — had received notices for the compulsory acquisition of two pieces of land in Bukit Kayu Hitam. It revealed that the lands were being acquired by KDN for a new road alignment to connect the Bukit Kayu Hitam ICQS Complex in Kedah to the CIQ Sadao facility in Thailand. Atlan holds Cergasjaya and CPPA through DFIL.
It had pointed out then that the compulsory land acquisition will cause a closure of DFIL’s duty-free business at Bukit Kayu Hitam. For the financial year ended Feb 29, 2024, Cergasjaya had contributed 24% to DFIL’s revenue.
"The land acquisition enquiry process was conducted on Nov 6 and the land administrator (the Department of Director General of Lands and Mines, Kedah) had made an oral compensation award of approximately RM69.9 million. On Nov 12, the formal notice of award (Form H) was served on the two subsidiaries," explained Lee.
He said DFIL is not satisfied with the award and will file an objection to the High Court. In the meantime, it is unable to quantify the financial impact of the compulsory acquisition until the conclusion of the land reference in the High Court.
"The company will make further announcements as and when there are material updates or developments in relation to the foregoing," he added.
DFIL also warned shareholders and potential investors to exercise caution when dealing in its securities.
Atlan shares were untraded on Tuesday. It last closed at RM2.75, giving it a market capitalisation of RM697.5 million. Meanwhile, DFI shares last traded at 7.4 Singapore cents, for a market cap of S$88.67 million.