Share
- Additionally, SCIB is seeking a court order to compel Awana to discharge SCIB as the corporate guarantor for the loan facility within 30 days from the date of judgment.
KUALA LUMPUR (Feb 11): Sarawak Consolidated Industries Berhad (KL:SCIB) said its wholly-owned subsidiary, SCIB Properties Sdn Bhd (SCIBP), has filed a writ of summons against housing developer Awana JV Suria Saga Sdn Bhd, seeking legal redress over what it claims as unauthorised loan drawdowns by the latter.
As part of the lawsuit, SCIB is seeking several court declarations to safeguard its financial interests and legal standing.
Firstly, the company is requesting a confirmation that the settlement cum appointment of contractor agreement signed by SCIBP and Awana in August 2024 (SA 2024) and the related contract have lapsed and are no longer enforceable.
Additionally, SCIB is seeking a court order to compel Awana to discharge SCIB as the corporate guarantor for the loan facility within 30 days from the date of judgment.
Furthermore, the company is applying for an interlocutory injunction to prevent Awana from further utilising the loan facility until the case is fully resolved. These legal measures are intended to protect SCIB from further financial exposure and ensure that all contractual obligations are upheld in accordance with the law.
“SCIB remains firm in upholding financial discipline and contractual integrity. The unauthorised loan drawdowns are a serious matter, and we are taking the necessary legal action to protect the company’s financial interests.
“We trust that the judicial process will ensure accountability, and we will pursue all legal avenues to safeguard our shareholders' value,” said SCIB group managing director Ku Chong Hong.
SCIB assured that the legal proceedings will not impact the company’s ongoing business operations. The company will continue to monitor developments closely and provide updates as necessary.
(Read also: SCIB denies developer's allegations over debt repayment, demands debt settlement
Developer disagrees over repayment conditions, debt owed to SCIB for scrapped Perak housing project)
Last month, SCIB announced that the RM162 million contract to build a civil servant housing project in Perak that it had secured from Awana as part of a debt settlement has fallen through, after the developer failed to fulfil a key preceding condition within the stipulated time frame.
The condition, as stipulated under SA 2024, was for a nominee from SCIB be appointed to Awana’s board of directors within the conditional period.
The contract, which was awarded to SCIBP, was initially part of SA 2024 after both parties had mutually agreed to scrap an engineering, procurement, construction and commissioning (EPCC) contract back in July 2023.
SCIB was also made the corporate guarantor in favour of MBSB Bank Bhd for loan facilities granted to Awana to complete the project.
In return, Awana was required to appoint SCIBP as the exclusive main contractor for the project, known as Program Perumahan Penjawat Awam (PPAM) in Muallim, Perak. Awana also agreed to repay SCIBP an outstanding amount of RM19.13 million, which included a debt balance of RM18.64 million and an additional RM492,432.72 that was advanced on behalf of Awana by SCIB Industrialised Building System Sdn Bhd.
Following the lapse of SA 2024, SCIB said Awana must acknowledge a total indebtedness of RM19.72 million to SCIBP. The debt is also now subject to impairment review, the company noted. Initially, the amount owed to SCIBP was RM18.72 million, following the termination of the EPCC contract.
A first payment of RM75,000 was made in August 2023.
Shares of SCIB remained unchanged at 21.5 sen on Monday, giving the company a market capitalisation of RM142 million. Over the past one year, the stock has fallen 38%.
EdgeProp.my is currently on the lookout for writers and contributors to join our team expansion. Please feel free to send your CV to [email protected].
Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!
