KUALA LUMPUR (April 2): Lotte Chemical Titan Holding Bhd (KL:LCTITAN) has provided further details of a legal dispute that potentially exposes the group to liabilities of up to RM130 million.
In a follow-up bourse filing on Thursday, the petrochemical group said the dispute stems from a distributorship agreement dated May 29, 2019, under which its wholly owned subsidiary — Lotte Chemical Titan (M) Sdn Bhd (LCTM) — appointed Petroleum Logistic Services Sdn Bhd (PLS) as the exclusive distributor for selected chemical products in Malaysia.
Under the agreement, LCTM sold products to PLS for onward sale to end-customers, with customers required to pay LCTM directly despite invoices being issued by both parties.
But PLS then sought to revise commission rates upward and redirect payments from end-customers through PLS instead of directly to LCTM. LCTM rejected these proposals.
In early July 2025, PLS stopped issuing invoices to end-customers, citing "compliance" issues, while LCTM denied any non-compliance. Following the impasse, LCTM terminated the distributorship agreement on Aug 11, 2025. The termination took effect on Oct 11.
LCTM then initiated arbitration proceedings on March 5, 2026, seeking RM8.02 million in unpaid invoices and a declaration that the distributor had breached their agreement. In response, PLS filed a lawsuit on March 19 against LCTitan, LCTM and the group's president Jang Seon Pyo. LCTitan first disclosed this lawsuit on Tuesday.
Financial exposure
Based on the claims, LCTitan said it faces an estimated exposure ranging from RM18 million (linked to alleged tax indemnities) to RM130 million (including RM111 million in special damages for alleged unpaid commissions).
The group said it is disputing the claims in their entirety and intends to "vigorously resist" the proceedings. LCTM is a major subsidiary of the group, with a total investment cost of RM3.34 billion after impairment, based on LCTitan's audited financial statements for 2024.
Shares in LCTitan closed 1.5 sen or 4.3% higher at 36.5 sen on Thursday, valuing the group at RM844 million.
The stock has surged 28.1% over the past month, largely due to global supply concerns, including for polymers and chemicals, stemming from the outbreak of the US-Iran conflict that has disrupted shipping in the Strait of Hormuz.