KUALA LUMPUR (Sept 17): Pestec International Bhd (KL:PESTEC) said the Kuala Lumpur High Court has extended an injunction preventing its China-based supplier Shandong Power Equipment Co Ltd (SPECO) from enforcing an undated corporate guarantee against the group.
According to a bourse filing on Thursday, Pestec said the court granted the interim injunction on Sept 2, following an earlier ex parte injunction.
Under the order, SPECO and its employees, agents or representatives are restrained from enforcing, executing, demanding payment under, or taking steps to enforce the undated corporate guarantee.
The latest ad interim injunction will remain in force until Oct 9, when the court is scheduled to hear arguments from both sides or until further orders.
An ex parte injunction is an order granted at an early stage without the other party being present or heard. Meanwhile, an inter partes hearing is a hearing where both sides have an opportunity to present their arguments.
The latest ad interim order effectively keeps the restriction in place until the inter partes hearing occurs.
The development comes as Pestec seeks to defend itself against a winding-up petition filed by SPECO.
“In light of the granting of the ad interim injunction, the company will take such further steps as may be necessary to protect its rights and interests in relation to the winding-up petition filed by SPECO,” said Pestec in the filing.
Pestec previously said that it had not been served with the petition and only became aware of it after Bursa Malaysia Securities Bhd forwarded a copy of a winding-up notice advertised by SPECO in two Malaysian newspapers.
The petition relates to an alleged amount owed by Pestec under the corporate guarantee, whose validity and enforceability the group is disputing in the civil suit.
The civil suit was filed by Pestec and its subsidiaries, Enersol Co Ltd and Pestech Sdn Bhd against SPECO, Shandong Electrical Engineering & Equipment Group Co and several former members of Pestec's management.
Pestec has alleged fraud, conspiracy to defraud and breaches of fiduciary duties in connection with transactions involving the two China-based suppliers.
The group has also alleged that an undated and unauthorised corporate guarantee was used to support SPECO's payment claims. The company has said the guarantee was not part of its corporate records or recognised in its audited financial statements.
With the interim injunction now in place, Pestec said it will take further steps it considers necessary to protect its interests in relation to the winding-up petition.
Shares of Pestec paused half a sen or 9.1% lower to five sen at the midday break on Thursday. At its last price, the group’s market capitalisation stood at RM127.9 million.