Reference is made to the announcements dated 7 May 2015, 18 May 2015, 3 June 2015, 23 July 2015 and 31 October 2018.

Unless otherwise defined, the terms used herein shall have the same meanings as those defined in the announcements.

The Board of Directors of Benalec wishes to announce that, Benalec Sdn Bhd (“BSB”), a wholly-owned subsidiary of the Company has been served with two (2) demand letters dated 2 November 2020 (“1st Letter”) and 10 November 2020 (“2nd Letter”) from Sentosacove Sdn Bhd (“SSB”).

In the 1st Letter, SSB is claiming that BSB has yet to deliver the vacant possession of the Project Site after the expiry of the extension order and have without consent or authorisation committed the following acts:-

1. unlawfully entering into the Project Site without SSB’s knowledge and/or permission;
2. unlawfully removed site materials belonging to SSB from the Project Site, which includes (but not limited to) the sand-filling for the reclamation works;
3. denying SSB from entering into the Project Site; and
4. placed vessel(s), ship(s), tug boat(s), equipment(s) at the Project Site without SSB’s knowledge and/or permission.

Following the above allegation, SSB demands that BSB is to cease and desist from:

1. entering the Project Site without SSB’s knowledge, permission, consent and authorisation;
2. to immediately provide to SSB the details of the amount and volume of sand fillings which BSB had allegedly removed from the Project Site;
3. to immediately return all the sand fillings which BSB had allegedly removed from the Project Site by returning or placing the same at the Project Site;
4. to immediately return any other site materials which BSB had allegedly removed by returning or placing the same at the Project Site; and
5. to immediately remove, vacate and yield up all the vessel(s), ship(s), tug boat(s), equipment(s) as well as all employees and/or staff of BSB at the Project Site.

In the 2nd Letter, SSB is claiming that:-

1. the reclamation works under the Reclamation Agreement has yet to be completed in the timeframe provided and the failure to deliver and/or surrender the Project Site to SSB;
2. BSB to transfer and/or surrender the proportion of the reclaimed land to the Malacca State Government and SSB, as per their entitlements under the Reclamation Agreement;
3. BSB to deliver vacant possession of the Land (excluding those sites and/or land which titles had been issued) to SSB;

BSB has through its solicitors on 12 November 2020, replied to SSB that:-

       a. BSB denied all the allegations as stated in the 1st Letter and reserves its right on this matter;

       b. BSB had via several letters in the past, proposed and offered the specific plots of land to transfer the entirety of SSB’s entitlement under the Reclamation Agreement to SSB but SSB has never given a definite answer in regards to BSB’s offer;

       c. BSB takes the position that it has duly surrendered the Malacca State Government’s entitlement under the Reclamation Agreement;

       d. In view that the parties have yet to finalise their respective land allocations, BSB denies that it has unlawfully maintained itself at the Project Site and/or unlawfully entered the Project Site. BSB also vehemently denies that it has committed an act of trespassing as alleged by SSB.

At this juncture, while awaiting advice from its legal counsel on the development of the case, the Company is unable to ascertain the financial/operational impact from the above allegations.

Nevertheless, it is helpful to note that based on the Reclamation Agreement between BSB and SSB, the sharing ratio is 95% to 5% of the reclaimed land after allocating one-sixth of all reclaimed land to the Malacca State Government.

The Company will make such further announcement on the development of the above matter as and when necessary.

This announcement is dated 16 November 2020.