KUALA LUMPUR: Country Heights Holdings Berhad (CHHB) has acknowledged a deviation from its longstanding practice by missing the deadline for timely updates of the group's financial announcements to Bursa Malaysia for the first time in 40 years.
This unexpected delay was attributed to issues stemming from its wholly-owned subsidiary, Mines Waterfront Business Park (MWBP).
According to CHHB, Amy Siew, one of the purchasers of MWBP, succeeded in her legal suit against the company to terminate the sales and purchase agreement (SPA) during the property handover.
Instead of proceeding with the SPA, she submitted claims for liquidated ascertained damages (LAD), according to CHHB.
Following the court's judgment, the claim, originally valued at RM600,000 for the property, amounted to RM1.1 million. CHHB said in a statement that despite negotiations resulting in an agreed-upon reduced amount, with RM75,000 paid to Siew's lawyer, her winding-up petition was enforced against MWBP's subsidiary.
This led to other creditors also filing their proof of debt, which is now totaling RM3.8 million, with the admission of debt still pending the Malaysian Department of Insolvency's (MDI's) decision.
"The company, through its lawyer, has committed to resolving the matter expeditiously and has deposited RM390,000 to be paid to MDI, equivalent to 10 per cent of the amount, even though the claim of RM3.8 million is not accurate and verified yet," it said.
Consequently, the Board of Directors (BOD) decided to adopt a book figure of RM3 million for the accounts to be announced, causing delays in updating and verifying financial figures, it noted.
CHHB's BOD has instructed the initiation of necessary accounting measures to accurately reflect the group's financial position.
The group reaffirmed its commitment to transparency and proactive engagement with counterparts to address ongoing challenges.
Additionally, CHHB clarified recent reports regarding its outstanding balance owed to MBSB Bank for financing facilities related to MWBP and the Mines International Exhibition and Convention Centre (MIECC).
Contrary to reports of RM180 million owed, CHHB said the correct sum falls between RM72 million and RM79 million under an Islamic loan scheme.
The BOD instructed accounting measures to reflect the accurate estimate of RM79 million.
"MWBP has received a proposal for settlement from MBSB Bank dated November 17, 2023, in which to pay an upfront payment of RM1 million and the remainder of RM500,000 monthly, to be paid over 24 months, and this is subject to the offer by the MDI for the case to be discharged.
"Adding to the accounting problem, some of the debtors of MWBP, such as 23 Century, who was not paying its rent up to RM3.8 million, were in a winding up situation. The account and audit have taken a very careful approach to addressing the situation," it said.
CHHB said that MWBP and MIECC are valued at RM550 million as per current market value.
"The group remains committed to addressing these challenges transparently and responsibly, and appreciates the continued support of its stakeholders during this time," it said.
