KUALA LUMPUR: Gabungan AQRS Bhd
’s shares fell to a low of RM1.68 after it was served with a letter of demand from Lien Hoe Corp Bhd for RM50mil.
The counter was suspended from 9am to 10am Friday. When it resumed trading, it fell six sen to RM1.69.
At 11.29am, it was down four sen to RM1.70. There were 662,700 shares done at prices ranging from RM1.68 to RM1.72.
On Thursday, Gabungan AQRS's property development unit, AQRS The Building Co Sdn Bhd (AQRSTB) has been served with a letter of demand for outstanding payment of RM50.46mil to Lien Hoe as the company allegedly defaulted on its payment schedule.
Lien Hoe, in a filing to Bursa Malaysia, said the letter of demand, served by its unit Pro-Meridian Sdn Bhd, requires AQRSTB to pay RM50mil and accrued interest of RM456,954.
However, Gabungan AQRS has refuted the claims and that it was “excessive” in a filing with Bursa Malaysia. It has also appended a schedule of repayment.
It said the schedule of repayment “clearly and expressly shows that the sum of the demand made by Pro Meridian is entirely excessive in the circumstances”.
“As such the letter of demand will be responded to appropriately and the response will include the attached schedule that will in turn form the premise of the company's firm and unequivocal denial of the said demand,” Gabungan AQRS said.
In a statement issued by Gabungan AQRS on Friday, it said the letter of demand was faxed to the office of AQRSTSB at 3.30pm and the board of directors were aware only by late evening.
"Management immediately convened an emergency meeting at 7.30 pm to urgently redress this issue. Management diligently worked through the night to prepare a counter response towards this groundless and entirely excessive claim," it said.
An announcement was uploaded to Bursa Malaysia before midnight.
The claim relates to a development agreement signed on Sept 30, 2011 for the development of “The Peak” in Johor Bahru, where Pro-Meridian is the landowner while AQRSTB is the developer.
In this initial agreement, AQRSTB is required to pay Pro-Meridian a minimum sum of RM117mil in cash as its entitlement to the revenue of the development over a period up to December 2014.
Subsequently on July 22, 2016, AQRSTB and Pro-Meridian entered into a further supplemental agreement, to among others:
a) Extend the time for completion of the development period to Dec 31, 2018; and
b) Amend the schedule for remaining unpaid balance of the minimum guaranteed amount of RM61.75mil.
According to the schedule of payment, the amount claimed by Pro-Meridian is clearly and expressively excessive and misleading in the current circumstance.
Gabungan AQRS group CEO Datuk Azizan Jaafar said: “We will take firm action to not only respond to this Letter of Demand and we have appointed Messrs Zul Rafique & Partners as our solicitors to appropriately deal with this Letter of Demand to ensure the interest and rights of the company will be at all times protected.”
Azizan added the development agreement which was first entered into on Sept 30, 2011, was prior to the listing of Gabungan AQRS on Bursa Malaysia on July 31, 2012 and involved senior management team members who have since left the group.
"Hence, a full investigation on this matter will be conducted including but not limited to, the various parties involved and the rationale for the terms and conditions as contained in the development agreement," it said.
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