Adjudication will have negative impact on earnings — Mudajaya

KUALA LUMPUR (Jan 17): Mudajaya Group Bhd says the decision in an adjudication process will have a negative impact of RM98.35 million on its earnings for the year ended Dec 31, 2016, as the amount has been recognised as revenue in prior years.

The group’s wholly-owned subsidiary, Mudajaya Corp Bhd (MCB), commenced adjudication proceedings against CMC Machipex Sdn Bhd in October 2015 for a principal sum of RM175.3 million together with late payment interest and cost.

MCB sought payment claims for work done and non-payment by CMC. CMC admitted some of the claims and in turn made a counterclaim in the form of a set-off in the amount of RM61.8 million.

“MCB intends to pursue this claim matter in accordance with the provisions of the subcontract agreement which include negotiations via Dispute Adjudication Board and arbitration,” it said.

Mudajaya said it will make the necessary announcement as and when there is a material development on the matter.

This article first appeared in The Edge Financial Daily, on Jan 17, 2017. Subscribe to The Edge Financial Daily here.