KUALA LUMPUR (March 9): Maju Holdings Sdn Bhd and its founder Tan Sri Abu Sahid Mohamed are attempting to get CIMB Investment Bank Bhd (CIMB IB) and others to cover any liability they may face in the lawsuit brought by sukuk holders of the MEX II highway.
CIMB IB is the investment arm of CIMB Group Holdings Bhd's (KL:CIMB).
According to CIMB's bourse filing on Monday, Abu Sahid, his wife and son, and Maju Holdings with its unit Maju Lingkaran Development Sdn Bhd, have filed a counterclaim seeking various orders from the court in the event they are found liable.
They are seeking an order for indemnity from CIMB IB and "other parties" for such liability, or an order for contribution for such liability as the court deems just and equitable. They are also seeking an order for indemnity for damages, interest, and costs.
The counterclaim comes in a RM1.38 billion suit filed by the sukuk holders of the MEX II highway late last year. A breakdown of the “other parties” covered under the counterclaim was not disclosed in the bourse filing.
Aside from Abu Sahid, his family, Maju Holdings, Maju Lingkaran, and CIMB IB, other defendants named in the suit include Datuk Yap Wee Leong; TMF Trustees Malaysia Bhd; Crowe Malaysia PLT; HSS Engineers Bhd (KL:HSSEB), 30%-owned associate HSS Integrated Sdn Bhd; and Straits Consulting Engineers Sdn Bhd.
CIMB IB is the lead arranger, lead manager, facility agent and principal adviser for the sukuk, while TMF Trustees is the sukuk trustee and security trustee. HSS is the consultant engineer for the construction of MEX II Highway while Straits Consulting Engineers is the appointed independent consulting engineer.
CIMB IB said it will defend against the counterclaim and is confident that it had performed its duties and obligations at all material times. “The counterclaim is not expected to have material operational or financial impact on the company,” it added.
The 14 sukuk holders who initiated the suit are Credit Guarantee Corporation Malaysia Bhd; Amanah Raya Bhd; Syarikat Takaful Malaysia Keluarga Bhd; Syarikat Takaful Malaysia Am Bhd; Zurich Life Insurance Malaysia Bhd; Zurich Takaful Malaysia Bhd; RHB Asset Management Sdn Bhd; RHB Islamic International Asset Management Bhd; Maybank Trustees Bhd; Amanahraya Trustees Bhd; HSBC (Malaysia) Trustee Bhd; AHAM Asset Management Bhd; AIIMAN Asset Management Sdn Bhd; and OPUS Asset Management Sdn Bhd.
The MEX II sukuk was issued in 2016 for the construction of the 16.8km three-lane dual-carriageway connecting the Putrajaya Interchange of the MEX I Highway and KLIA/KLIA 2.
Initially slated for completion in November 2018, MEX II was deferred to October 2019. However, the highway remains incomplete today.
MEX II’s sukuk faced issues in paying its principal and profit in 2021, which saw it defer payments. The debt notes were suspended by end-2021 by CIMB IB, after payments due were not received despite extensions granted by sukuk holders.
Following the default and subsequent failed restructuring attempts, MEX II was placed under receivership in 2022.
Shares in CIMB ended 20 sen or 2.51% lower at RM7.77, valuing the lender at RM83.9 billion.