KUALA LUMPUR (March 28): Lim Seong Hai Capital Bhd (KL:LSH), which has been slapped with a lawsuit by the former operator of Kuala Lumpur Tower, said that the claim against its subsidiaries is without merit and cannot be established.

"Our appointment was based on a legitimate government-led procurement process. We are not privy to any purported arrangements made between the outgoing operator and the government," LSH Capital said in a statement on Friday.

The ACE Market-listed company on Thursday announced that its wholly-owned subsidiary LSH BEST Builders Sdn Bhd (LSHBB) and its 70%-owned unit LSH Service Master Sdn Bhd had been served a writ of summons with the statement of claim by the former operator of KL Tower, Menara Kuala Lumpur Sdn Bhd, and its parent company Hydroshoppe Sdn Bhd. The communications minister, the Ministry of Communications, the government and Service Master (M) Sdn Bhd (SMSB) were also named as defendants in the suit.

The legal action pertained to alleged contractual breaches and misconduct that led to the award of the concession to LSH Service Master.

The plaintiffs are seeking for the concession to be transferred back to them, along with RM20.13 million in loss and damages, as well as general damages to be assessed.

LSH Capital said LSH Service Master’s appointment as the concessionaire of KL Tower followed a legitimate government-led procurement process where the company bid for the contract via the government’s open call for a request for proposal (RFP) in February 2024.

LSH Service Master secured the 20-year concession in early March to operate and maintain KL Tower and its surrounding areas, effective April 1, 2025.

In the suit, however, Menara Kuala Lumpur and Hydroshoppe claimed there was a pre-existing understanding regarding the operation and management of KL Tower, according to LSH Capital. They alleged that LSH Capital and its units had committed inducement for breach of a contract the plaintiffs had agreed to with the government in a meeting dated Aug 1, 2022.

LSH Capital said the lawsuit is not expected to cause any material financial or operational impact on the group for the financial year ending Sept 30, 2025, aside from legal costs. "We remain fully committed to fulfilling our obligations under the concession beginning April 1."

LSH Capital said neither the group nor its subsidiaries were aware or informed of “any previous meetings, understandings, or arrangements” between the plaintiffs and the government.

It stressed that its bid and selection for the job were solely based on the formal process outlined in the government’s RFP.

“The government issued an open call for RFP, inviting Malaysian companies who satisfy the minimum requirements to join a briefing and site visit on March 4, 2024. LSH Capital’s team attended the briefing, purchased the RPF documents, and submitted its proposal in full compliance with the requirements.

“We were selected based on the strength of our proposal submission and proven capabilities,” it added.

LSH Capital reiterated that LSH Service Master’s award of the KL Tower concession was secured via a fair and open RFP process and stressed its stance to vigorously defend its position.

“In the meantime, it is our continuous commitment to focus on executing our obligations under the concession from April 1, 2025,” it added.

At the time of writing on Friday, shares in LSH Capital were trading 1.5 sen or 1.69% lower at 87.5 sen, valuing the group at RM729.4 million.

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