MATERIAL LITIGATION IRE-TEX CORPORATION BERHAD ("Ire-Tex" or "the Company") - Writ of Summons and Statement of Claim by Ire-Tex against Teh Eng Huat and Khoo Hun Sniah in the High Court of Malaya at Penang (Civil Suit No.: 22NCVC-166-10/2015)

IRE-TEX CORPORATION BERHAD

Type Announcement
Subject MATERIAL LITIGATION
Description
IRE-TEX CORPORATION BERHAD ("Ire-Tex" or "the Company") - Writ of Summons and Statement of Claim by Ire-Tex against Teh Eng Huat and Khoo Hun Sniah in the High Court of Malaya at Penang (Civil Suit No.: 22NCVC-166-10/2015)

The Board of Directors of Ire-Tex wishes to announce that the Company had, via its solicitors, Messrs Chua Associates, filed a Writ of Summons and Statement of Claim in the High Court of Malaya at Penang against Teh Eng Huat (“First Defendant”) and Khoo Hun Sniah (“Second Defendant”) on 2 October 2015.

1. Details of the default or circumstances leading to the filing of Writ of Summons and Statement of Claim

The filing of the Writ of Summons and Statement of Claim is a result of the First Defendant and Second Defendant (collectively referred to as “Defendants”) failing to settle the outstanding amount of RM6,315,113.00, being the shortfall amounting to RM8,815,113.00 of the guaranteed profit after tax for the financial years of 2013 and 2014 (jointly and severally guaranteed by the First Defendant and Second Defendant to the Plaintiff in the proportions of 80% and 20% respectively) less the profit guarantee security of RM2,500,000.00 (“Profit Guarantee Security”), pursuant to the terms of the Sale and Purchase Agreement dated 18 November 2013, Supplemental Agreement dated 7 February 2014 and Further Supplemental Agreement dated 14 April 2015 (collectively referred to as “SPA”) entered into between the Company and the Defendants.

(i)   By two (2) notices in writing both dated 14 April 2015 to the Defendants’ stakeholder, Messrs David Lai & Tan (“Stakeholder”), each of the Defendants requested the release of the Profit Guarantee Security in favour of the Plaintiff in accordance with the terms of the SPA, which was duly released by the Stakeholder.

(ii)  By a letter of demand dated 7 July 2015 and a letter of demand dated 31 July 2015 from the Plaintiff’s solicitors, the Plaintiff demanded payment of the Outstanding Amount from the Defendants. Notwithstanding the aforesaid demands, the Defendants have failed, neglected and/or refused to make payment of the Outstanding Amount, or any part thereof.

(iii)  By reason of the Defendants’ breach as aforesaid and in accordance with the terms of the SPA, the Plaintiff is entitled to contractual interest at the rate of 8% per annum on the Outstanding Amount from 15 July 2015 until the date of full payment.

2. The financial and operational impact of the Writ of Summons and Statement of Claim on the Group

The Writ of Summons and Statement of Claim are not expected to have any material financial and operational impact on the Group.

3. The expected losses, if any arising from the Writ of Summons and Statement of Claim

The Company is not expected to incur any further losses arising from the Writ of Summons and Statement of Claim.

 

The above matter is fixed for Case Management on 12 November 2015.

Further announcement on the development of the above matter will be made to Bursa Malaysia Securities Berhad in due course.

This announcement is dated 6 November 2015.

 






Announcement Info

Company Name IRE-TEX CORPORATION BERHAD
Stock Name IRETEX
Date Announced 06 Nov 2015
Category General Announcement for PLC
Reference Number GA1-06112015-00001