KUALA LUMPUR (Oct 24): Tan Chong Motor Holdings Bhd (KL:TCHONG) is suing Epicon Bhd (KL:EPICON) and its former subsidiaries to recover RM26.15 million in overdue settlement payments.
In a filing with Bursa Malaysia on Friday, Tan Chong said its wholly-owned unit, Tan Chong Industrial Equipment Sdn Bhd (TCIE), has filed a writ of summons and statement of claim in the Kuala Lumpur High Court.
The suit names Epicon — formerly known as Konsortium Transnasional Bhd — and five previously related transport firms: Transnasional Express Sdn Bhd, Plusliner Sdn Bhd, Syarikat Kenderaan Melayu Kelantan Bhd, Syarikat Rembau Tampin Sdn Bhd and Kenderaan Langkasuka Sdn Bhd as defendants.
According to Tan Chong, the debt stems from a 2016 settlement agreement TCIE entered into with the defendants and MHSB Properties Sdn Bhd involving RM32.9 million in unpaid vehicle rental and maintenance charges.
Under the agreement, a piece of land in Bandar Ampang, Selangor, valued at RM16 million, was to be transferred to TCIE as part of the settlement, while the remaining RM16.92 million was to be repaid in eight monthly instalments.
However, the defendants only paid the first instalment, prompting TCIE to terminate the deal in 2017 and repossess the leased vehicles.
The defendants and MHSB then filed a lawsuit that same year, seeking to block the repossession and claiming the land was worth RM55.6 million, which they said resulted in an overpayment.
That dispute was eventually resolved in TCIE’s favour when the Federal Court upheld its position in February this year. Following continued non-payment, TCIE sold the repossessed vehicles for RM2.1 million in July.
Under the latest lawsuit, TCIE is seeking to recover RM26.15 million in outstanding payments, plus late interest of 0.75% per month from April this year, legal costs and any other relief deemed appropriate by the court.
Tan Chong said TCIE’s solicitors believe it has valid grounds for recovering the debt and that the lawsuit is not expected to have any material financial or operational impact on the group.
Shares in Tan Chong closed one sen or 1.6% higher at 65 sen on Friday, valuing the group at RM436.8 million.