WEIDA

2.390

(%)

Arbitration proceedings brought by Weida Works Sdn Bhd (Weida Works) against Common Tower Technology Sdn Bhd (Arbitration)

WEIDA (M) BHD

Type Reply to Query
Reply to Bursa Malaysia's Query Letter - Reference ID IQL-13032018-00002
Subject Arbitration proceedings brought by Weida Works Sdn Bhd (Weida Works) against Common Tower Technology Sdn Bhd (Arbitration)
Description
ARBITRATION PROCEEDINGS BROUGHT BY WEIDA WORKS SDN BHD, A WHOLLY OWNED SUBSIDIARY OF WEIDA (M) BHD. ("WEIDA WORKS" OR "PLAINTIFF"), AGAINST COMMON TOWER TECHNOLOGY SDN. BHD. ("CTT" OR "DEFENDANT").
Query Letter Contents

We refer to your Company’s announcement dated 9 March 2018 in respect of the aforesaid matter.

In this connection, kindly furnish Bursa Securities with the following additional information for public release:-

(a)   The particulars of the claim under the counterclaim, including the total amount claimed for under the counterclaim and the interest rate.

(b)   A confirmation as to whether Weida Works is a major subsidiary.

(c)   The total cost of investment in Weida Works.

(d)   The financial and operational impact of the counterclaim and the Arbitration on the Group.

(e)   The expected losses, if any arising from the counterclaim and the Arbitration.

Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.

Yours faithfully,

 

SUZALINA HARUN
Senior Vice President, Issuers
Listing, Regulation

/WCY

c.c.: Market Surveillance Dept, Securities Commission Malaysia (via fax).

(Unless otherwise stated, all abbreviations used herein shall have the same meanings as those mentioned in the announcement dated 9 March 2018)

Further to the announcement dated 9 March 2018 in relation to the above subject, Weida, wishes to announce additional information as set out below as requested by Bursa Securities via its letter dated 13 March 2018.

(a) The particulars of the claim under the counterclaim, including the total amount claimed for under the counterclaim and the interest rate.

CTT’s counterclaim in the arbitration alleges and seeks declaratory orders that the said JVA are not binding and/or void in law and/or seeks refunds of all monies received from CTT save for telecommunication towers construction costs as well as to repay RM131,842,529.46 being “wrongful interest” imposed by Weida Works with pre award and post arbitration award interest and costs. Weida Works’ response is that CTT’s alleged “wrongful interest” is in fact Weida Works’s share of license fees pursuant to the JVA and was treated as “interest “in accordance with the Financial Reporting Standards at that material time. The same manner has been practised since Year 2006 without any objection.

(b) A confirmation as to whether Weida Works is a major subsidiary.

Weida Works is not a major subsidiary of Weida.

(c) The total cost of investment in Weida Works.

The total cost of investment of Weida in Weida Works amounts to RM621,632.00 as at 9 March 2018.

(d) The financial and operational impact of the counterclaim and the Arbitration on the Group, and (e) The expected losses, if any arising from the counterclaim and the Arbitration.

As advised by Weida Works’ solicitors, the Company is of the view that CTT’s counterclaim is not supported with valid grounds and have no legal basis for its allegations in its reply and counterclaim.  On the contrary, the Company is of the view that Weida Works has a legal basis for this arbitration of which Weida Works is interalia claiming against CTT for losses suffered by Weida Works in consequence of CTTs breach of the terms of JVA in not paying Weida Works its entitled share of all license fees from new operators using Weida Works built towers for RM 23,435,000.00 which represents Weida Works’ approximate share of the same and/or in breach of CTT’s fiduciary duty towards Weida Works under the JVA.

The counter claim and the arbitration proceedings are not expected to have any material financial and operational impact on Weida Group. Weida Group does not expect any losses to arise by reason of the commencement of the said arbitration proceeding other than legal cost and time in defending Weida Works’ claim and CTT’s counter claim.

This announcement is dated 14 March 2018.

 

 





Announcement Info

Company Name WEIDA (M) BHD
Stock Name WEIDA
Date Announced 14 Mar 2018
Category General Announcement for PLC
Reference Number GA1-14032018-00060