“Yong Tai plans to contest Kerjaya Prospek’s RM105 million lawsuit over a contract dispute and may consider a countersuit, with minimal financial impact expected.”
Kuala Lumpur, 26th Aug 2024, 10.28am – Property developer Yong Tai Bhd announced its intention to defend against a lawsuit filed by construction firm Kerjaya Prospek Group Bhd over an alleged unpaid contract dispute, and may consider filing a countersuit.
In a stock exchange filing, Yong Tai confirmed that its subsidiary, Apple 99 Development Sdn Bhd, received a writ of summons and statement of claim from Kerjaya Prospek (M) Sdn Bhd, a fully owned subsidiary of Kerjaya Prospek, for an alleged unpaid residual contract amount of RM105.14 million.
However, Yong Tai disputes Kerjaya Prospek’s claims, arguing that they lack merit, as Kerjaya Prospek allegedly breached key contract terms by not completing the work on time and failing to adhere to the agreed scope of work.
Yong Tai also contests Kerjaya Prospek’s request to be released from its responsibility to rectify defective work and disputes the claimed outstanding amount, stating it is approximately RM36.4 million.
“All allegations in the statement of claim are denied,” Yong Tai stated.
The company believes that Kerjaya Prospek’s claims lack legal foundation. Both Yong Tai and Apple 99 Development intend to retain legal counsel to defend against the claims and are considering filing a counterclaim to recover all associated costs, losses, and damages.
Yong Tai stated that the claims are not expected to have a significant impact on the group’s financial position, as the amount owed to Kerjaya Prospek has already been recorded in Apple 99 Development’s financial statements for the year ending June 30, 2024.
For context, Kerjaya Prospek was awarded a contract valued at RM213.75 million by Yong Tai for the main construction work on a mixed development project called “The Apple” in Melaka. This project, a joint venture between Yong Tai and PTS Properties Sdn Bhd, includes a 16-story hotel with 284 rooms, branded as Courtyard by Marriott, a 32-story service suite building with 361 serviced apartments, and an eight-story car park podium.
On Thursday, Kerjaya Prospek announced in a filing that its subsidiary, Kerjaya Prospek (M) Sdn Bhd, has initiated legal action against Apple 99 Development over a disputed contract.
The company is also seeking a court declaration that Apple 99 Development violated a settlement agreement made in February 2020. Kerjaya Prospek is demanding specific performance of both the settlement and hotel sale agreements.
Citing the unpaid amount and the lack of a third-party sale of the hotel, Kerjaya Prospek asserts that it is now entitled to enforce the hotel sale agreement.
Shares in Yong Tai closed at 21 sen on Friday, down one sen or 4.55%, giving the company a market value of RM89.19 million. Kerjaya Prospek’s shares also fell by one sen or 1.21% to 82 sen, resulting in a market capitalization of RM469.97 million.
