Reference is made to the announcement made on 9 September 2020 with regard to the Sale and Purchase Agreement ("the SPA") entered into between SIG and Hallmark Equity Sdn Bhd (“the Purchaser”) on the same date for the disposal of all that freehold land held under GM 200, Lot No. 352, Mukim 12, Tempat Ladang Valdor, Daerah Seberang Perai Selatan together with the building erected thereon and bearing address no. 1488 Jln Besar Valdor, Kaw Perindustrian Valdor, 14200 Sg Jawi, Pulau Pinang (“the Property”) for a total cash consideration of RM22,000,000.00 (“the Selling Price”), of which a deposit sum of RM2,200,000.00 only (“the Deposit Sum”) was paid to SIG.

INTRODUCTION

The Board of Directors wishes to inform that both the Purchaser and SIG have on 15 January 2021 agreed to enter into a Rescission Agreement (“RA”) to rescind the SPA in respect of the Property (“the Rescission”).

DETAILS OF THE RESCISSION

Pursuant to the RA :

1.  The Vendor and the Purchaser mutually agree to rescind the SPA absolutely and release and discharge each other from the performance and observance of the SPA.

2.   The Vendor shall refund the Deposit Sum to the Purchaser within seven (7) working days from the date of the RA and the Purchaser shall forthwith simultaneously return the Memorandum of Transfer to the Property with the Vendor’s interest as registered proprietor of the Property remaining intact; the proof of withdrawal of private caveat presented or registered against the Property by the Purchaser and/or the Purchaser’s Financier and any other documents delivered to the Purchaser pursuant to the SPA whereupon the SPA shall become null and void and of no further effect and neither party shall have any claim of compensation against each other under the SPA.

3.    The Purchaser shall cooperate and do all acts and things and provide such documents as may be necessarily required for the Vendor to obtain the refund of the retention sum for Real Property Gains Tax of RM660,000.00 (“the Retention Sum”) paid by the Purchaser’s Solicitors to the Inland Revenue Board (IRB) and hereby authorise the IRB to release the Retention Sum to the Vendor.

4.  The Vendor shall at liberty to sell the Property to any new purchaser at any terms and conditions as the Vendor deems fit.

5.  Both parties hereto shall indemnify and always keep each other indemnified against all actions, proceedings, claims, costs, charges, expenses and any suits whatsover that may arise out of the execution of the RA.

6.   Each party shall pay their own solicitors’ cost and expenses of and incidental to the preparation and execution of the RA. The stamp duty for the RA shall be borne by the Purchaser.

RATIONALE OF THE RESCISSION

SIG and the Purchaser are rescinding the SPA due to an issue relating to the size of the Property where the Purchaser requested a reduction in the Selling Price but SIG disagreed to do so. 

The Rescission has been effected by both parties through mutual consent. Ultimately, the Board of Directors expects that the demand and price for the Property will appear positive moving forward.

FINANCIAL EFFECTS OF THE RESCISSION

The Rescission shall not have any effect on share capital, substantial shareholdings, earnings, gearing and net assets of Magni Group.

INTEREST OF DIRECTORS AND/OR MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the Directors and/or major shareholders of the Company and/or persons connected with them have any interest, direct or indirect, in the Rescission.

This announcement is dated 15 January 2021.