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KUALA LUMPUR (Nov 8): EcoFirst Consolidated Bhd’s wholly-owned unit Pujian Development Sdn Bhd (PDSB) has received a sealed court order to pay a judgement sum of RM10.37 million in respect of the rescinded sale and purchase agreements involving 12 units.
Of the judgement sum, RM1.51 million is out of pocket expenses, RM2.33 million is a loan sum according to loan agreement, RM4.83 million is derived from the 10% interest rate on the total amount of out of pocket expenses and loan agreement, from the date of breach of sale and purchase agreements until Dec 3, 2010 and RM1.69 million derived from the 5% interest rate from the sum of out of pocket expenses and loan agreement, from Dec 4, 2010 to Sept 17, 2019.
According to the bourse’ filing yesterday, the plaintiffs Chan Yoke Heng and 23 others’ claim against PDSB was allowed by the High Court on Sept 17, 2019.
Following this, PDSB had on Nov 6 received the sealed court order on the decision by the Shah Alam High Court. On the same day, PDSB also received a notice by Messrs A.J. Ariffin, Yeo & Harpal, the solicitors acting on behalf of the plaintiffs, demanding the judgement sum.
Prior to this, PDSB and the plaintiffs had filed an appeal to the Judge in chambers against the decision on Sept 27, 2019. The plaintiffs’ appeal (Enclosure 78) and PDSB’s appeal (Enclosure 79) are fixed for case Management on Nov 28, 2019.
EcoFirst said PDSB is not its major subsidiary because the value of its profit before tax and total assets employed are less than 70% of the group's total profit before tax and assets respectively.
“No significant financial or operational impact is expected from the Notice as the group has adequate resources to meet its commitment. PDSB has 21 days from receipt of the notice to settle the claim, failing which winding-up proceedings will be taken against PDSB. The company will proceed to file an application for a stay of execution pending the appeal of the said decision,” it added.
EcoFirst noted that no further material losses are expected to incur as the judgement sum other than the legal and court cost, has already been accounted for in the financial statements.
In the event that PDSB is not successful in its defence against the claim made by plaintiffs, the expected losses to PDSB will comprise satisfaction of the judgement sum plus legal costs and interest, it noted.
Shares price of EcoFirst fell two sen or 5.8% at 32.5 sen, bringing it a market capitalisation of RM259.52 million. The counter saw some 3.54 million shares transacted yesterday.
