LEGAL SUIT FILED BY COCONUT TREE SDN BHD (FORMERLY KNOWN AS NEXGRAM LAND SDN BHD) AGAINST MR LAU TIAN KIT A DIRECTOR OF BLUE HILL DEVELOPMENT SDN BHD. (The Law Suit 1) [24 Aug 2018]

MATERIAL LITIGATION NEXGRAM HOLDINGS BERHAD (“NEXGRAM” OR “COMPANY”) LEGAL SUIT FILED BY COCONUT TREE SDN BHD (FORMERLY KNOWN AS NEXGRAM LAND SDN BHD) AGAINST MR LAU TIAN KIT A DIRECTOR OF BLUE HILL DEVELOPMENT SDN BHD. (The Law Suit 1)

NEXGRAM HOLDINGS BERHAD

 

Type Announcement
Subject MATERIAL LITIGATION
Description
NEXGRAM HOLDINGS BERHAD ("NEXGRAM" OR "COMPANY") LEGAL SUIT FILED BY COCONUT TREE SDN BHD (FORMERLY KNOWN AS NEXGRAM LAND SDN BHD)  AGAINST MR LAU TIAN KIT A DIRECTOR OF BLUE HILL DEVELOPMENT SDN BHD. (The Law Suit 1)

1.            Introduction and Background

 

The Board of Directors of Nexgram Holdings Berhad (“the Company”) wishes to announce that the Company and Coconut Three Sdn Bhd (formerly known as Nexgram Land Sdn Bhd) (“CT”), of which, CT was formerly held 70% of the equity interest of Blue Hill Development Sdn Bhd (“BH”), both the Company and CT (collectively known as “Nexgram”) filed a law suit against Mr Lau Tian Kit, a director of BH.

2.            Information of the Lawsuit 1
i.     Coconut Three Sdn Bhd (Plaintiff) vs Lau Tian Kit (Defendant)

 

The Plaintiff has issued a Writ of Summon and Statement of Claim (Case Ref: TA-22NCC-6-08/2018) dated 9 August 2018 respectively filed with the High Court of Kuala Trengganu claiming for the sum of RM7,250,311.00 (Ringgit Malaysia: Seven Million Thousand Two Hundred Fifty Thousand And Three Hundred Eleven) served on the Defendant for breach of the Profit Guarantee Agreement dated 14 April 2016 (”PGA”) duly executed by the Defendant and late Ms Lim Kim Lee as the Guarantor(s) prior to the Plaintiff acquired the 70% interest or equivalent to 770,000 ordinary shares in Blue Hill Development Sdn Bhd (“BH”) pursuant to the Shares Sale Agreement dated 14 April 2016.

 

Via the PGA, the Defendant had guaranteed the Plaintiff a Profit Guarantee  with the Guarantee Period until the financial period of 30 September 2017. In the event that the Profit Guarantee sum was not achieved by the Defendant/Guarantor(s), they shall pay and compensate the Plaintiff’s demand for the shortfall or deficiency (“both inclusive of Profit Guarantee sum of RM2.0 million plus the losses recorded after tax”) as per the terms and conditions as are stipulated in the PGA.

 

The financial results of BH during the Guarantee Period are detailed below:

 

Guarantee Period Profit Guarantee Actual Results Shortfall
1 October 2016 to 30 September 2017 Profit after Tax of not be less than RM2.0 million (Ringgit Malaysia: Two Million) loss after tax of RM5,250,311.00 (Ringgit Malaysia: Five Million Two Hundred Fifty Thousand And Three Hundred Eleven) RM7,250,311.00 (Ringgit Malaysia: Seven Million Two Hundred Fifty Thousand and Three Hundred Eleven) (“Claimable Sum”)

 

As such, the Plaintiff now claims for the total shortfall, being the defaulted guarantee amount for Guaranteed Period with an interest rate of 5% per annum imposed on the Claimable Sum until full settlement.

 

The Defendant is required to settle the Claimable Sum within Fourteen (14) days from date a Writ of Summon and Statement of Claim, together with costs incurred on the Claimable Sum.

 

The Case Management has been fixed on 6 September 2018.

 

3.         Financial Effects of the lawsuits

 

The lawsuits will not have any material impact on the issued share capital, net assets, earnings, gearing and substantial shareholdings of the Group for the financial year ending 31 July 2018 and 31 July 2019, except for the additional expenses incurred in the relation to The Law Suit 1.

 

4.         Directors’ and Substantial Shareholders’ Interest

 

None of the Directors and substantial shareholders of the Company or persons connected to them have any interest, direct or indirect in The Law Suit 1.

 

5.         Statement by Directors

 

The Board of Directors, after having considered all aspects, is of the opinion that the lawsuits is in the best interest of NEXGRAM Group.

 

This announcement is dated 24 August 2018