Further to the Company’s announcement made on 27 July 2022, the Board of Directors of the Company wishes to announce that Citaglobal Energy Sdn. Bhd. (formerly known as WZS Misi Setia Sdn. Bhd.) (“Citaglobal Energy”), a wholly-owned subsidiary of the Company was on 5 December 2022 notified by its appointed solicitors that the Adjudicator had on 5 December 2022 determined and delivered the Adjudication Decisions pursuant to a claim by Proweld Engineering Sdn. Bhd. (“PESB”) against Citaglobal Energy arising from work orders for the piping and mechanical works for the ASPAC KANCIL Project awarded by Citaglobal Energy to PESB on 16 October 2020 (“ASPAC KANCIL Project”).

Background on the ASPAC KANCIL Project

Citaglobal Energy, had received a purchase order amounting to approximately RM16.5 million dated 9 October 2020 from AsPac Lubricants (Malaysia) Sdn. Bhd. (“AsPac Lubricants”), a member of the BP Group of Companies, with its office address at Lot No. 197 II & 197 III, Jalan Pelabuhan Utara, 42000 Pelabuhan Klang, Selangor Darul Ehsan for the mechanical, electrical and instrumentation installation works for its lubricant blending plant (“the Contract”).

Citaglobal Energy’s scope of work are mechanical, electrical and instrumentation installation works in line with the plant upgrading for AsPac Lubricants in Port Klang, Selangor Darul Ehsan including supply of partial materials, construction and commissioning of the upgrading system.

The Adjudication Decisions are as follows:

1. The claimed amount being RM5,258,026.08 was duly adjudicated and the amount adjudicated to be payable by Citaglobal Energy to PESB is RM 1,062,676.18.
2. Pursuant to Construction Industry Payment and Adjudication Act (“CIPAA”) subsection 25(o), Citaglobal Energy shall pay to PESB interest on the adjudicated amount, calculated at 5% per annum up to 13 June 2022 amounting to RM44,882.03.
3. Pursuant to CIPAA subsection 25(o), Citaglobal Energy shall pay to PESB interest on the adjudicated amount, calculated at 5% per annum from 5 December 2022 and continuing until the adjudicated amount is completely paid.
4. Pursuant to CIPAA subsection 18(1), and in accordance with the principle that costs follow the event, Citaglobal Energy shall pay to PESB the costs of the adjudication proceeding, including the Adjudicator’s fees and expenses and the Asian International Arbitration Centre (AIAC)’s fees and expenses in the total amount of RM81,289.00.
5. The above amounts shall be paid by Citaglobal Energy to PESB on or before 14 December 2022. 

Citaglobal Energy is seeking the advice of its solicitors with regards to its recourse against PESB for back charges payable by PESB to Citaglobal Energy as well as its recourse to review or appeal the Adjudication Decisions. Citaglobal Energy intends to claim back charges against PESB following PESB’s discontinuance of its obligations under the Contract without Citaglobal Energy’s consent.

The Adjudication Decisions will not have any material financial effect to Citaglobal group of companies.

This announcement is dated 6 December 2022.