PETALING JAYA: Jaks Resources Bhd’s total costs and disputed claim against Star Media Group Bhd would be much higher than the RM50 million bank guarantee called by Star Media, based on its preliminary estimate.
Jaks said in a Bursa Malaysia filing that its 51%-owned subsidiary JAKS Island Circle Sdn Bhd’s (JIC) solicitors are in the midst of preparing the necessary documentation on the arbitration.
“The company will make further announcement accordingly if there is any material update on this.”
Jaks noted that JIC reserves the right to claim, via arbitration, the additional costs incurred for the variation orders instructed by Star Media and potential costs or damages incurred/will be incurred during this process.
Early this month, JIC served a notice of arbitration on Star Media to resolve all disputes between the two parties by way of arbitration, including issues arising from the claim by Star Media on interest and the call on the RM50 million bank guarantee.
Star Media in response said it did not view the letter from Jaks as a notice of arbitration, calling it premature and failing to state or particularise Jaks’ alleged dispute intended to be referred to arbitration. It also denied a request by Jaks to waive the procedural step of panel resolution pursuant to Clause 19.1 of the sale and purchase agreement.
The issue revolves around a RM50 million bank guarantee which Star Media is claiming for JIC’s failure to deliver vacant possession of Tower A of the Pacific Star project by the stipulated deadline. JIC however is contesting this, stating that delays had been partly caused by Star Media’s variation orders.
JIC has filed an injunction with the Kuala Lumpur High Court to restrain Star Media from receiving the RM50 million. The hearing is set for March 20.
Jaks maintains the view that it has strong and sufficient grounds to support the injunction applications and the call on the bank guarantee by Star Media is baseless.
Jaks’ share price fell 10 sen or 6.3% to close at RM1.48 today, while Star Media was down 1 sen or 0.8% to RM1.28.
Source: The Sun Daily