Korean company files RM230mil suit against two Kelantan Govt-related companies

KOTA BARU: A Korean company has filed a RM230mill suit at the High Court here on Sunday against two Kelantan Government-related companies for not honouring a letter of intent to start construction work on the 73km Kota Baru-Kuala Krai highway two years ago.

Dae Hanguru Infra Sdn Bhd, the plaintiff in the writ of summons, named Baldah Toyyobah (Prasarana) Kelantan Sdn Bhd and Kelantan Mentri Besar Incorporated (PMBK) as second defendants.

In the company’s statement of claim, it was alleged that it spent RM5.5mill for preliminary works on the highway and demanded both defendants pay the costs incurred.

The company also wanted a court order for the defendants to pay up a sum of RM225.7 mill projected profit from the whole project.

The writ of summons was filed by their counsel from legal firm Fernandez and Selvarajah at the High Court Registrar office here at 11am.

The plaintiff further alleged the first defendant, in a letter of intent on Oct 8, 2012, had appointed Consortium Daelim JV (CDJV) as the turnkey contractor for the whole project.

The plaintiff also alleged that one of the conditions of the letter of intent for CDJV was to set-up a local company as the turnkey contractor for the project to finance and design of the RM1.8bill highway.

Dae Hanguru Infra Sdn Bhd executive director Zaidon Omar claimed that the first defendant had accepted the suggestions or recommendations submitted on how the highway would be built.

"After receiving the contract, the company started preliminary works on the highway with an investment of RM5.5mill that included technical (expertise) and financing of the highway.

"However, on Oct 13 last year, the first defendant decided to discontinue the project although negotiations between the parties to prepare official documents pertaining to the project was ongoing," Zaidon told reporters outside the court.

He added the first defendant and PMBK failed to reply to an application by the plaintiff to hold a meeting to discuss the matter.

The plaintiff is asking for a court order for the defendants to pay for the losses suffered by the plaintiff after the contract was terminated.