MATERIAL LITIGATION IRE-TEX CORPORATION BERHAD ("Ire-Tex" or "the Company") -Writ of Summons and Statement of Claim by Zoomic Technology (M) Sdn. Bhd. ("ZTSB"), a wholly-owned subsidiary of Ire-Tex against Teh Eng Huat in the High Court of Malaya at Penang

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 Zoomic Technology (M) Sdn. Bhd. ("ZTSB"), a wholly-owned subsidiary of Ire-Tex against Teh Eng Huat in the High Court of Malaya at Penang

The Board of Directors of Ire-Tex wishes to announce that the Company had, via its solicitors, Messrs. Thomas Philip, filed a Writ of Summons and Statement of Claim in the High Court of Malaya at Penang against Teh Eng Huat (“Defendant”) on 26 September 2016.

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 Defendant who was a director of ZTSB (primarily responsible for the financial management of ZTSB), who owed the following duties to ZTSB:-

(a)   the Defendant was reposed with trust and confidence and consequently owed a duty of good faith to ZTSB;

(b)   the Defendant was further subject to fiduciary duties with attendant obligations to exercise his powers for a proper purpose and in good faith in the interest of ZTSB; and

(c)    the Defendant was subject to further wider duties under law to ZTSB to, amongst others, account to ZTSB, including that set out under Section 132 of the Companies Act, 1965 read together with Part X of the Contracts Act, 1950.

In November 2014, the Defendant caused ZTSB to make payment to him of a sum of RM3 million. In a subsequent review of the financial affairs of ZTSB, ZTSB is unable to reconcile the payment of the said sum of RM3 million to the Defendant having regard to, among others, that ZTSB had previously issued 5,900,000 new ordinary shares of RM1.00 each to the Defendant (including one other minority shareholder in the Plaintiff) in satisfaction of all advances previously made by the Defendant to satisfy amounts owing to Malaysian Debt Ventures Berhad.

The Defendant was at all material times reposed with trust and confidence at the material time such that ZTSB had not intended to allow the Defendant to gratuitously retain the RM3 million and the Defendant must make compensation to ZTSB pursuant to section 71 of the Contracts Act 1950 or otherwise in law. Pursuant to Section 11 of the Civil Law Act 1956 and Order 42, Rule 12 of the Rules of Court 2012 and the inherent jurisdiction of this court, ZTSB also claims compensation and/or damages including interest on the said sum of RM3 million from 11 November 2014 until satisfaction.

2. The financial and operational impact of the Writ of Summons and Statement of Claim on Ire-Tex and its subsidiaries (“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.

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

This announcement is dated 26 September 2016.






Announcement Info

Company Name IRE-TEX CORPORATION BERHAD
Stock Name IRETEX
Date Announced 26 Sep 2016
Category General Announcement for PLC
Reference Number GA1-26092016-00090