KUALA LUMPUR (March 31): Lotte Chemical Titan Holding Bhd (KL:LCTITAN) said on Tuesday it is being sued by Petroleum Logistics Services Sdn Bhd over a dispute involving revenue, profits and tax liabilities arising from the chemical giant's use of the latter's licence for domestic sales.

In a bourse filing on Tuesday, LCTitan said it has been served a writ of summons by Petroleum Logistic Services for claims, including damages and proposed tax and penalties, exceeding RM100 million. Petroleum Logistic Services is wholly owned by Kamil Azman Abdul Razak, according to the company's filings with the Companies Commission of Malaysia.

LCTitan's president Jang Seon Pyo, as well as its subsidiary Lotte Chemical Titan (M) Sdn Bhd, have also been named as defendants.

Petroleum Logistic Services is also demanding an accounting of all revenue, profits and gains received or retained by LCTitan and its subsidiary from domestic sales it conducted under Petroleum Logistic Services' licence, and payment of sums found due. It wants a detailed disclosure, including invoices, purchase orders, pricing memos, customer payment records and sales information.

It is claiming special damages of RM111.8 million, based on a 15% gross profit margin benchmark tied to domestic sales. Alternatively, it wants special damages of RM20.57 million — a shortfall based on a 3% industry-standard distributor margin — alongside distribution fees or compensation to be determined by the court, and interests.

In addition, Petroleum Logistic Services is seeking an indemnity for tax liabilities, penalties, and charges amounting to RM18.44 million that are imposed or will be imposed by the authorities.

LCTitan said it does not expect any material impact from the lawsuit on its earnings or net assets at this stage, apart from legal costs. "The company is seeking legal advice on the matter. Further announcement will be made as and when there is material development on the above matter," it added.

Shares in LCTitan closed two sen or 4.9% lower at 38.5 sen on Tuesday, valuing the group at RM890.26 million. Despite the dip, the stock is up over 35% from a month ago, buoyed by supply concerns following the outbreak of the US-Iran conflict that has disrupted shipping in the Strait of Hormuz.