KUALA LUMPUR: Dagang Nexchange Bhd
(DNeX) has reached a global settlement with two companies linked to Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (CGP Fund), ending legal proceedings and arbitration involving shareholders of SilTerra Malaysia Sdn Bhd.
In a filing with Bursa Malaysia, DNeX said it and its subsidiaries, DNeX Semiconductor Sdn Bhd (DSSB) and SilTerra, entered into the settlement with Tethystronics Technologies Company Ltd (TTCL) and Mimastronics Technologies Company Ltd (MIMAS) on Oct 8.
The settlement was formalised through a consent order recorded at the Kuala Lumpur High Court on the same day.
Under the agreement, all legal proceedings and arbitration between the parties, including proceedings relating to arbitral awards, will be discontinued, withdrawn, terminated or stayed in accordance with the consent order.
“The global settlement is a mutual settlement amongst shareholders, entered into amicably and without any admission of liability by any party,” DNeX said.
No monetary compensation or payment is payable by any party under the global settlement, save for reimbursement of legal costs between the parties.
As part of the settlement, MIMAS will subscribe for 5,000 redeemable convertible preference shares (RCPS) in DSSB at RM20,000 each, amounting to RM100mil.
The subscription replaces an earlier arrangement under a share subscription agreement dated Jan 21, 2022, which involved irredeemable convertible preference shares in DSSB and gave rise to the initial legal dispute.
The proposed RCPS subscription is subject to approval, a no-objection letter or confirmation that no approval is required from the Ministry of Investment, Trade and Industry or the Malaysian Investment Development Authority.
DNeX said the subscription would have no immediate effect on its shareholding in DSSB, as the preference shares would only be converted into ordinary shares if DSSB elected not to redeem them after the relevant anniversary dates.
If the RCPS are fully converted, MIMAS would hold about 33.33% of DSSB's enlarged ordinary share capital. Notwithstanding the foregoing, DSSB will remain a subsidiary of DNeX.
The group said the proposed RM100mil subscription would provide funding to support SilTerra's financial position, expansion plans and investments in semiconductor technology, including silicon photonics.
DNeX said the settlement would also resolve outstanding disputes among SilTerra's shareholders and reduce further legal costs.
The settlement took effect on Oct 8, except for the proposed RCPS subscription, which remains subject to the relevant regulatory condition.
