PETALING JAYA: IRIS CORP Bhd has initiated legal proceedings against its existing and former board of directors over its Border Control Solutions Investment.
In a filing with Bursa Malaysia yesterday, the identification products and solutions provider said it had commenced legal proceedings in the Kuala Lumpur High Court against nine defendants.
The defendants listed are Tan Sri Razali Ismail, Datuk Tan Say Jim, Datuk Seri Shahbuddin Tunku Besar Burhanuddin, Datuk Hamdan Mohd Hassan, Datuk Eow Kwan Hoong, Chan Feoi Chun, Syed Abdullah Syed Abd Kadir, Datuk Noor Ehsanuddin Mohd Harun Narrashid and Datuk Nik Azman Mohd Zain.
“The suit concerns the company’s investment in Border Control Solutions Ltd (BCS).
“The company brought this action for loss suffered from the defendants’ failure to discharge their respective fiduciary duty, duty of fidelity and/or duty to exercise reasonable care, skill and diligence as directors of the company at that material time,” said Iris.
Iris said it is seeking RM11.72mil, being the total amount paid by the company for the subscription of BCS’ shares, which is equivalent to a total sum of £2.05mil by reference to the conversion rates prevailing on the respective dates of payments.
It is also seeking RM482,172 being the total amount paid to Joseph Vijay Kumar as consultant fees, which is equivalent to a total sum of £84,000 by reference to the conversion rates prevailing on the respective dates of payments.
The company is also claiming pre-judgment and post-judgment interests at a rate of 5% per annum on both the sums that it is seeking, as well as general damages, interest on the general damages awarded, costs and/or all other relief that the court deems fit and just.
Save for the legal cost arising from this litigation, Iris said the litigation is not expected to have any material financial impact on the company.
Iris recorded a net profit of RM5.17mil in its third quarter ended Dec 31, 2018, compared with a net loss of RM45.51mil in the previous corresponding period.
The loss in the previous corresponding quarter was mainly due to recognition of a non-cash allowance for impairment loss amounting to RM28.1mil in relation to a trusted identification project overseas, as well as losses from foreign exchange of RM6.4mil due to the strengthening of the ringgit against the dollar and euro.
Revenue in the third quarter dropped to RM42.97mil from RM64.98mil a year earlier, Iris said in its notes accompanying its third-quarter results.