KUALA LUMPUR (July 1): Epicon Bhd (KL:EPICON) said the group has initiated a lawsuit against an engineering services company to recover RM20.36 million in unpaid amounts relating to a subcontract.

In a bourse filing on Wednesday, Epicon said its wholly-owned unit, Transnational Builder Sdn Bhd (TBSB), had subcontracted Ibrahim & Sons Engineering Sdn Bhd to install underground cables for five cable installation projects with Tenaga Nasional Bhd (KL:TENAGA) in October 2023. The total contract sum was RM130.89 million.

Epicon said TBSB provided two performance security cheques totalling RM1.69 million on Oct 17 and Dec 13, 2023, and replaced the cheques with bank guarantees on Nov 18 and Nov 21, 2024.

An additional two bank guarantees for performance security were issued on Nov 21 and 25, 2024. Three of the bank guarantees for a total amount of RM1.95 million are still active, said Epicon.

The group said Ibrahim & Sons has allegedly failed to refund the guarantees, resulting in an unpaid total of RM16.71 million out of a total bill of RM42.41 million for the work done by TBSB under the Tenaga contracts.

Epicon said TBSE had frozen Ibrahim & Sons' assets to prevent them from being moved or hidden during the proceedings.

The group does not anticipate any immediate negative impact on its overall operations or finances arising from the case.

Case management for the lawsuit has been fixed for Aug 19.

Epicon shares closed unchanged at 13 sen, valuing the group at RM227.4 million. Year-to-date, the counter is up 34.13%.