KAJD said the company was still operating as usual and had not sold off the project or any equity in it as widely speculated.
"Rumours are rife and this is fake news that has tarnished KAJD's reputation," said the statement.
KAJD said it would not be responsible over the speculation and had the right to take legal action against those disseminating such false accusations.
KAJ signed a memorandum of agreement with Powerchina on Sept 1, 2016 to privately develop the 546.4 hectare mixed development on the Straits of Malacca, comprising three man-made islands and one natural island.
Melaka Gateway is expected to be completed in 2025 and attract some 2.5 million visitors, annually, with some 40,000 to 45,000 job opportunities created.
The islands would feature, among others, an international cruise passenger terminal, a commercial city, liquid bulk terminal and maritime industrial park. - Bernama