Sentoria’s lease agreements allegedly terminated by LADA, company taking legal advice

• The group’s 75%-owned subsidiary Sentoria Langkawi Sdn Bhd (SLSB) had signed two agreements with LADA in 2014 to lease 70 acres of land in Padang Mat Sirat for a lease premium consideration of RM30.49 million as well as 50 acres of land in Mukim Ulu Melaka for RM10.89 million — both with 90-year leases. 

KUALA LUMPUR (Aug 12): Sentoria Group Bhd said it is taking legal advice on the purported termination of the lease agreements for 120 acres of Malay reserve land in Langkawi by Lembaga Pembangunan Langkawi (LADA).

The group’s 75%-owned subsidiary Sentoria Langkawi Sdn Bhd (SLSB) had signed two agreements with LADA in 2014 to lease 70 acres of land in Padang Mat Sirat for a lease premium consideration of RM30.49 million as well as 50 acres of land in Mukim Ulu Melaka for RM10.89 million — both with 90-year leases. 

LADA is the registered owner of both tracts of land.

SLSB leased the two plots of land with the intention of developing them into projects known as Langkawi Geopark Resort City and Langkawi Medical Village.

Sentoria said that SLSB has paid RM41.38 million to LADA as lease premium consideration with a loan of RM28.9 million from Affin Bank Bhd and the remaining RM12.48 million from internally-generated funds.

In a bourse filing on Friday, Sentoria said it has received notice from Affin regarding a refund of RM28.9 million from LADA, allegedly being the refund of the partial lease payment pursuant to the purported termination of lease agreements.

Notwithstanding the receipt of the notice, Sentoria said it is taking advice on the purported termination of the agreements by LADA.

“In the event our solicitors agree that the purported termination is wrong and invalid, SLSB will initiate the necessary actions to recover the costs incurred to date together with the substantial losses we have suffered by reason of us not being able to develop the land as was intended.

“LADA as the lessor is fully aware of our intended development,” added Sentoria.

The group said SLSB had since 2014 incurred property development costs and the carrying amount for the land, including land lease premium and property development costs totalling RM60.15 million to date.

Sentoria’s shares settled 4.17% or half a sen higher at 12.5 sen on Friday, valuing the property developer and resort operator at RM70.9 million.