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 decided to discontinue the action against the Defendants in Penang High Court Civil Suit No. 22NCVC-166-10/2015. The brief reasons for the discontinuance of the action against the Defendant are as follows:-

  1. The board had in November 2016 set up a Special Review Committee to look into the profit leakages of the Company. By the end of February 2017, it was require to consider a significant impairment in delivered machinery assets by end 2016. Since then, new circumstances which lead the Company to discover the RM11.5 million payment was made with no proper purpose have come to light that made it necessary to reassess the litigation commenced by and against the Company and its subsidiaries.
  2. It was discovered that there was an actual order of RM16.8 million placed by Ire-tex Paper Packaging Sdn Bhd to Zoomic Automation (M) Sdn Bhd at the end of May 2014 to build these machinery and the orders were never cancelled.  Both directors of Ire-Tex involved in the machinery deal have resigned from the company and since Teh Eng Huat was no longer at the helm of Zoomic, eventually the profit guarantee was not met. With the discovery of the purchase orders, the Company is of the view that it would be prudent and in the best interests of the Company to discontinue the action against the Defendants.
  3. The Company has also taken into consideration the costs to be expended as a basis to discontinue the suit against the Defendants.
  4. Given the matters above, the Company had, via its solicitors, Messrs Wei Li Tan & Cheong, filed a Notice of Discontinuance on 4 April 2017 to withdraw the suit against the Defendants with no order as to costs.
  5. The Notice of Discontinuance of the suit has no financial impact on the group or any material effects that may incur any further losses on the earnings or net assets of the Company. Instead, there are costs savings in terms of legal expenses.

This announcement is dated 26 April 2017.






Announcement Info

Company Name IRE-TEX CORPORATION BERHAD
Stock Name IRETEX
Date Announced 26 Apr 2017
Category General Announcement for PLC
Reference Number GA1-26042017-00085