News

The Board of Directors of Ekovest Berhad (“the Company”) wishes to announce that Ekovest Berhad (“Ekovest”) and Ekovest Construction Sdn Bhd (“ECSB”), a wholly owned subsidiary of the Company (collectively referred to as “Defendants”) were served by the solicitors of Samling Resources Sdn Bhd (“Plaintiff”) on 3 February 2020 with a Writ of Summons and Statement of Claim dated 31 January 2020 (“Claim”).

Vide a letter of award dated 25.7.2016 (“Letter of Award”), Lebuhraya Borneo Utara Sdn Bhd (“LBU”) awarded a project known as “Pan Borneo Highway Sarawak – Work Package Sematan to Sg. Moyan Bridge + KSR Interchanges” in the sum of RM2,112,800,000.00 to the Plaintiff (“Project”). The Project can be classified into 3 sections, namely the Bau Section, the Lundu Section, and the KSR Interchanges.

Prior to the Plaintiff being awarded the Project, the Plaintiff and Ekovest were in discussion on the possibility for Ekovest to support the Plaintiff as technical advisor or technical support if the Plaintiff were to be awarded the Project, as the Plaintiff did not have the experience and expertise in the construction of highways whereas Ekovest is a well-known construction company in West Malaysia, with the relevant experience and expertise in the construction of highways.

At the material time, the Plaintiff and Ekovest discussed that as part of the technical advice and support to be provided by Ekovest if the Plaintiff were to be awarded the Project, the Plaintiff will appoint Ekovest as its sub-contractor for a contract value or scope equivalent to 30% of the total sub-contracted packages of the Project on such terms and conditions to be mutually agreed.

Notwithstanding the above, the Plaintiff and Ekovest embarked upon a discussion for a joint venture relationship to undertake the sub-contract of the Project, and that ECSB was identified and designated to be the company that would enter into the joint venture agreement with the Plaintiff.

Several companies were thereafter awarded the sub-contract works for the Project.

The Plaintiff’s Claim is alleging that Ekovest and/or ECSB:-

(a) were negligent in their representation and/or assurances with regards to the technical advice and support and profit margin for the Project;

(b) failed, neglected and/or omitted to discharge their responsibilities with due care and diligence in the implementation and execution of the Project;

(c) acted in breach of their fiduciary duties owed to the Plaintiff, including inter alia, the duties under common law and equity; and/or

(d) breached and misrepresented in respect of the sub-contractors that were selected, recommended and appointed to carry out the sub-contract works under the Project.

The Plaintiff is claiming against the Defendants jointly and severally for:-

(a) General damages;

(b) Interest at rate of 5% per annum pursuant to Section 11 of the Civil Law Act 1956 or at such rate and from such date as the Court deems fit and proper until the date of judgement;

(c) Interest at the rate of 5% per annum from the date of judgement until the date of full and final settlement;

(d) Costs; and

(e) Such further and/or other relief as the Court deems fit and proper.

The maximum exposure to liabilities and amount of damages, interest and costs pursuant to the above cannot be ascertained at this juncture.

Nonetheless, the Defendants have sought the necessary legal advice on the above subject matter and is of the opinion that they have a good defence to the Claim brought by the Plaintiff as they have failed to expeditiously and diligently make the necessary prior applications for the approvals from LBU for the sub-contract of the Project to Samling – Ekovest JV Sdn Bhd, a special purpose vehicle incorporated by ECSB and the Plaintiff to undertake the implementation of the Project (“JV Company”), and failed to take any steps to compel LBU to consent to the sub-contract of the works to the JV Company, which should not have been unreasonably withheld. Ekovest and ECSB will also consider filing relevant striking out applications where necessary.

Case management has been fixed for on 14 February 2020. Any updates in respect of material development in relation to the Claim will be made from time to time.

 
This announcement is dated 6 February 2020.