Ho Hup’s 52.5% indirect unit served with winding-up petition over payment dispute

• “Save for the amount claimed, the petition is not expected to have any financial and operational impact/losses to the group as the amount claimed is 0.19% of Ho Hup’s net assets,” said Ho Hup.

KUALA LUMPUR (Oct 15): Ho Hup Construction Company Bhd (KL:HOHUP) announced that its 52.5% indirect subsidiary, Golden Wave Sdn Bhd (GWSB), has been served with a winding-up petition by Eko Bina Sdn Bhd over a payment dispute tied to a serviced apartment and retail units project in Kota Kinabalu, Sabah.

The petition stems from an adjudication ruling made in December last year, which awarded Eko Bina, a wholly owned subsidiary of Ecobuilt Holdings Bhd (KL:ECOHLDS), RM23.16 million in its dispute with GWSB concerning payments owed during the construction process.

According to Ho Hup’s filing with the stock exchange on Monday, the petition hearing is scheduled for Nov 18.

In January 2021, GWSB awarded a RM166.37 million contract to Eko Bina, formerly known as E&J Builders Sdn Bhd, to serve as the main contractor for the Kota Kinabalu project, located along Jalan Wawasan. The project was scheduled to be completed in May 2022.

GWSB is 70% owned by Ho Hup’s property development division Ho Hup Ventures (KK) Sdn Bhd (HHVKK), which is in turn 75% owned by Ho Hup.

For the financial year ended Dec 31, 2023, GWSB’s loss before tax amounted to RM4.17 million, which contributes to 4.90% of Ho Hup’s total loss before tax of RM85.19 million.

As of the end of December 2023, GWSB's total assets stood at RM396.07 million, accounting for 32.52% of Ho Hup's total assets of RM1.22 billion.

“Save for the amount claimed, the petition is not expected to have any financial and operational impact/losses to the group as the amount claimed is 0.19% of Ho Hup’s net assets,” said Ho Hup, noting that the group is currently seeking legal advice on the matter.

Earlier this month, Ho Hup announced that GWSB has secured an interim restraining order from the High Court in Kota Kinabalu, which protects it from legal actions by creditors. This decision follows the Kuala Lumpur High Court's dismissal of GWSB's application to enter judicial management.

Judicial management is a corporate rescue mechanism that allows companies unable to pay their debts to appoint a judicial manager, triggering an automatic interim moratorium to protect them from litigation during the application process.

In September, Ho Hup announced that the group and HHVKK are facing a lawsuit from Sabah Development Bank Bhd concerning a loan facility provided to GWSB. Ho Hup is being sued as the corporate guarantor for GWSB, while SDB is pursuing HHVKK in its role as a shareholder of GWSB.

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