Reference is made to the announcements made by Parkson Holdings Berhad (“PHB” or the “Company”) on 15 November 2018 and 29 October 2019 in relation to the announcements made to the Singapore Exchange Securities Trading Limited (“SGX-ST”) by Parkson Retail Asia Limited (“PRA”), a 67.96% owned subsidiary of the Company listed on the SGX-ST, in respect of the issuance of Notice of Arbitration to Hassan (Cambodia) Development Co., Ltd. (“Lessor”) and the update on the litigation in relation thereto (“Announcements”).
Unless otherwise stated, the terms used throughout this announcement shall have the same meaning as defined in the Announcements.
PRA had on 27 April 2020, announced that in its Unaudited Financial Statements for the Fourth Quarter and Twelve Months ended 30 June 2019 released on 27 August 2019, it had mentioned that despite the disputes between Parkson (Cambodia) Co., Ltd (“PCCO”) (a wholly-owned subsidiary of PRA) and the Lessor in relation to the Lease Agreement being pending arbitration under the Singapore International Arbitration Centre (“SIAC Arbitration”) in Singapore, the Lessor had on 12 December 2018 filed a petition (“Case No. 2577”) in the Phnom Penh Municipal Court of First Instance (“Phnom Penh Court”).
On 22 April 2020, the Phnom Penh Court granted judgement against PCCO in Case No. 2577 (“Judgement”) to, inter alia:
1. forfeit the security deposit and all advanced rental payments paid by PCCO to the Lessor amounting to USD4,488,750; and
2. order PCCO to pay damages of USD144,504,960 to the Lessor, being the rental fee for the whole period of the lease under the Lease Agreement.
Prior to the Judgement, PCCO had filed an appeal motion to the Cambodian Appellate Court to transfer the jurisdiction of the Phnom Penh Court to hear Case No. 2577 to SIAC Arbitration jurisdiction. The appeal motion is currently pending in the Cambodian Appellate Court.
PCCO is seeking advice from its Cambodian lawyers whether to petition to set aside the Judgement, to appeal to the Cambodian Appellate Court or if other forms of recourse are available.
The Judgement is only applicable against PCCO and does not extend to PRA, PRA’s other subsidiaries nor its holding companies. The PRA Group’s maximum potential exposure resulting from the Judgement will therefore be limited to its capital contribution in PCCO which had been fully provided for in the audited financial statements of PRA for the financial year ended 30 June 2017. As stated in PRA’s announcement dated 15 November 2018, the PRA Group had in its audited financial statements for the financial years ended 30 June 2016, 2017 and 2018 recognised the impairment losses in connection with, inter alia, the full amounts of prepaid rental, rental deposit and property, plant and equipment in respect of the Cambodia Store. Accordingly, the Judgement, even if not successfully reversed or appealed against by PCCO, is not expected to have a material impact on the earnings per share and the net tangible assets per share of the PRA Group for the financial year ending 30 June 2020.
PRA will make further announcements as and when there are material developments on the above matter.
The Judgement does not have a material impact on the earnings of the PHB Group for the financial year ending 30 June 2020 and the net assets of the PHB Group based on the audited consolidated statement of financial position of the Company as at 30 June 2019.