Aeon to appeal High Court's ruling in tenancy dispute with Ahmad Zaki's unit

• The dispute stemmed from a legal suit filed by Betanaz against Aeon in 2021 for breaching the agreement entered into on Aug 24, 2017 for the lease of a plot in Kuantan to build and operate a commercial shopping complex.

KUALA LUMPUR (Dec 18): Aeon Co (M) Bhd (KL:AEON) plans to appeal the High Court's ruling that the department store and mall operator had breached a tenancy agreement it had entered into with Betanaz Properties Sdn Bhd, a 51%-owned subsidiary of Ahmad Zaki Resources Bhd (KL:AZRB).

With the ruling, the court had also ordered that Aeon pay RM18.7 million to Betanaz as outstanding rent, at an interest of 5% per annum from March 1, 2021 until the full amount is paid, Aeon said in a bourse filing on Wednesday. Aeon was also ordered to pay RM200,000 to Betanaz and RM100,000 to AZRB within 45 days, while its counterclaim was dismissed.

The dispute stemmed from a legal suit filed by Betanaz against Aeon in 2021 for breaching the agreement entered into on Aug 24, 2017 for the lease of a plot in Kuantan to build and operate a commercial shopping complex.

In response, Aeon filed a counterclaim against both Betanaz and AZRB, for failing to meet the conditions precedent before the expiration of the conditional periods, which resulted in the tenancy agreement becoming void.

The High Court, however, dismissed Aeon's counterclaim.

While it ruled that Aeon had breached the tenancy agreement, it decided that there was insufficient evidence to support Betanaz's claim that Aeon was bound to a 10-year lease, for which Betanaz claimed RM59.3 million.

"At this juncture, the board is unable to ascertain the financial impact on the company pending the outcome of the legal suit," Aeon said.

Shares in Aeon closed two sen or 1.36% higher at RM1.49 on Wednesday, valuing the company at RM2.09 billion.

AZRB's shares gained half a sen or 2.27% to close at 22.5 sen, giving it a market capitalisation of RM147.99 million.

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