ATA IMS faces RM20mil suit

KUALA LUMPUR: ATA IMS Bhd's wholly-owned subsidiary ATA Industrial (M) Sdn Bhd (AIM) has been served a writ of summons and statement of claim by Hong Kong-based Johnson Electric Industrial Manufactory Ltd.

ATA IMS, in a Bursa filing, said Johnson is claiming damages totalling some RM20mil (US$4.4mil) being payment for finished goods in accordance to invoices issued, payment for the raw materials pursuant to the debit note, storage costs and testing fees among other.Johnson is a motor supplier appointed by one of AIM’s customers, and as such AIM has issued purchase orders to Johnson for motors to be used in the customer’s products, with such transactions having taken place in 2020 and 2021.

But by way of email on May 10, 2022, AIM sought to cancel undelivered purchase orders ssued to Johnson due to fluctuations in demand from AIM’s customer, which Johnson rejected the cancellation of the purchase orders via email reply.

Between June to July 2022, AIM and Johnson were in discussions to resolve the matter

by requesting for delayed and staggered delivery which Johnson rejected.

In July, Johnson issued to AIM invoices on the undelivered goods and debit notes on the costs of raw materials, but did not ship the said goods as it has not received payment from AIM.

On Nov 11, 2022, Johnson sent AIM a legal letter of demand, insisting on receiving the full payment.