Aeon gets stay of High Court ruling in tenancy dispute with Ahmad Zaki unit, pending appeal

• In a filing with Bursa Malaysia, the general merchandise store and supermarket chain operator said the conditional stay was approved on Tuesday (Jan 7) for Aeon to deposit the judgment sum of RM18.68 million into an interest-bearing account held by Betanaz’s solicitors as stakeholders.

KUALA LUMPUR (Jan 8): Aeon Co (M) Bhd (KL:AEON) announced on Wednesday that the High Court has granted the company a conditional stay of the judgment issued on Dec 16, 2024, which found Aeon in breach of a tenancy agreement with Betanaz Properties Sdn Bhd, a 51%-owned subsidiary of Ahmad Zaki Resources Bhd (KL:AZRB).

In a filing with Bursa Malaysia, the general merchandise store and supermarket chain operator said the conditional stay was approved on Tuesday (Jan 7) for Aeon to deposit the judgment sum of RM18.68 million into an interest-bearing account held by Betanaz’s solicitors as stakeholders.

This also included the required payment of legal costs of RM200,000 to Betanaz and RM100,000 to Ahmad Zaki Resources by Jan 28, 2025.

Aeon had earlier filed both the notice of appeal and a stay application to halt the execution of the High Court’s decision on Dec 23, 2024.

The stay ensures the judgment will not take effect until the Court of Appeal hears Aeon’s appeal. "The financial impact will be a cash outflow equal to the amount of the judgment. There is no operational impact to the company," Aeon said.

The case originated from a dispute over a 2017 tenancy agreement for a plot in Kuantan meant for the construction and operation of a shopping complex. The High Court had ruled in favour of Betanaz, ordering Aeon to pay outstanding rent with interest at 5% per annum from March 1, 2021 until full payment is made.

Aeon’s counterclaim, alleging non-fulfilment of conditions precedent by Betanaz and AZRB, was dismissed. 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.

Shares in Aeon closed two sen or 1.30% higher at RM1.56 on Wednesday, valuing the company at RM2.19 billion. Ahmad Zaki Resources's share otherwise slipped half a sen or 2.17% to 22.5 sen, valuing the company at RM144.91 million.

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