Bina Puri, its director Tee Hock Seng face RM28.1m suit for purportedly failing to pay-up full sum in JVA

• Wisma Majujaya, based in Klang, filed the suit on May 16 last year at the Shah Alam High Court via Messrs Lim Chee Wee Partnership, where it is seeking a court order for the defendants to pay the sum of RM28.172 million plus interests.

SHAH ALAM (Jan 27): Bina Puri Holdings Bhd (KL:BPURI), its subsidiary Bina Puri Properties Sdn Bhd and its director Tan Sri Tee Hock Seng has been slapped with a RM28.1 million lawsuit by housing developer Wisma Majujaya Sdn Bhd for not abiding with a joint venture agreement (JVA) to develop a project in Johor Bahru, called “Puri Residence”.

Wisma Majujaya, based in Klang, filed the suit on May 16 last year at the Shah Alam High Court via Messrs Lim Chee Wee Partnership, where it is seeking a court order for the defendants to pay the sum of RM28.172 million plus interests.

In its statement of claims sighted by The Edge, Wisma Majujaya claimed that Bina Puri Properties had approached the plaintiff in 2015 to participate in the JV to develop Puri Residence, which comprises 300 units of double-storey terrace houses.

According to the JVA, the project should yield a revenue of RM231.338 million, as well as net cash flow of RM38.195 million over three years.

Wisma Majujaya alleges that it had agreed to contribute and invest RM10 million for the Puri Residence development with the agreement that Bina Puri Properties shall manage and develop the project’s construction by appointing contractors and furnishing monthly reports of the project.

Wisma Majujaya claimed that under the agreement dated Nov 23, 2017,  the project should yield a return of up to RM26 million on its investment as stipulated in Schedule 2 of the JVA, where the five repayments are to be made between Dec 31, 2018 and Aug 31, 2018.

It adds that in the event of late payment, it should be entitled to an 8% interest per annum.

The JVA was signed by Tee and Datuk Matthew Tee Kai Woon, directors of Bina Puri Properties. In consideration of the JVA, Bina Puri Holdings and Tee entered into a corporate and personal guarantee dated Nov 23, 2017.

To meet the payment of the RM10 million investments, Wisma Majujaya had sought advances from its shareholder Datuk Tan Hock Kien and other parties. The investment was paid in three tranches between Nov 23, 2017 and April 27, 2018.

The company claimed that by Dec 31, 2018, Bina Puri Properties was supposed to make the first part of the repayment of the return of investment but did not do so. On March 7, 2019, Wisma Majujaya, through its solicitors, demanded the RM5 million first return repayment, together with late repayment interests of RM64,657.53.

The letters were also distributed to other defendants, claims Wisma Majujaya.

This occurred until the final part payment of the return of investment was not paid on Aug 31, 2020, when Wisma Majujaya demanded the defendants to pay up. However, the defendant offered a proposal for payment via properties, which was rejected by Wisma Majujaya on Oct 14, 2020.

Between Nov 2020 to March 2024, Bina Puri Properties only paid part of the payments totalling RM7 million between Feb 10, 2021, and Jan 12, 2024. Wisma Majujaya claimed the part payments showed the defendant had failed or refused and neglected to pay the amount agreed in the JVA, and hence is seeking the sum of RM28.1 million.

Act considered money-lending and illegal, and counterclaim filed

In return, Tee in his defence and counter claim filed by Messrs Chris Lim Su Heng on Dec 6, 2024, alleged that the RM10 million consideration sum to the alleged JVA is illegal and constitutes illegal money lending transactions disguised as the alleged JVA.

He further claimed that the device used in the JVA and purported corporate guarantee dated Nov 23, 2017, to secure the grant of loan with interests to circumvent the provisions of the Moneylenders Act 1951 was illegal, null and void, and not enforceable under the Act, and is caught under Section 24 of the Contracts Act 1950.

Tee further claimed the RM10 million consideration disbursed by Wisma Majujaya through its solicitors as alleged are in fact illegal, and contravened the Moneylenders Act 1951.

The illegal consideration of guaranteed capital investment return and cumulative guaranteed capital investment return in Schedule 2 of the alleged JVA were nothing but exorbitant interest disguised as investment return, he claims.

Tee further claimed that Tan and the plaintiff are unlicensed moneylenders under the Act, and further alleged that the JVA was altered by Wisma Majujaya to facilitate the first payment of RM5 million loan to Bina Puri Properties on Nov 23, 2017.

“There is an exorbitant return stipulated in the alleged JVA as a result of the RM10 million lent. This return far exceeds the amount lent. The plaintiff does not have a developer’s licence, which contradicts the fact that they carry on business as a housing developer,” Tee further alleged.

Following that, Tee is seeking a declaration that Wisma Majujaya and Tan are unlicensed moneylenders within the meaning of the Moneylenders Act 1951, with regard to the alleged JVA, and corporate and personal guarantee dated Nov 23, 2017.

He further sought a declaration that the Nov 23, 2017, JVA and other related documents are money-lending contracts in respect of money lent by Wisma Majujaya as unlicensed money lenders, and they should be deemed illegal, null, void and unenforceable against Bina Puri Properties.

Further, he is seeking interests and costs of the action.

In addition, the two defendant companies also made similar claims through their defence filed on by Messrs Zain Megat & Murad that the JVA is null and void, and amounted to illegal money lending.

Wisma Majujaya has applied to the High Court for a summary judgement to be entered against the defendants through an application filed on Aug 23, 2024. Judicial Commissioner Zaharah Hussein had fixed Feb 3 to deliver the court’s decision.

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