MATERIAL LITIGATION IN THE HIGH COURT OF MALAYA IN KUALA LUMPUR BETWEEN IRIS ECO POWER SDN BHD (“IEP”) A WHOLLY OWNED SUBSIDIARY OF IRIS CORPORATION BERHAD (“COMPANY”) AND IPSA GROUP PLC, A COMPANY INCORPORATED IN THE UNITED KINGDOM FOR THE REFUND OF DEPOSIT PAID FOR EQUIPMENT TO THE SUM OF USD 3,100,000.
1. INTRODUCTION
IRIS CORPORATION BERHAD (the Company”) wishes to announce that its wholly owned subsidiary, IRIS ECO POWER SDN BHD (“IEP”/ Plaintiff) has via it’s solicitors’ Messrs Chellam & Wong filed a Writ of Summons and Statement of Claim against IPSA Group Plc, a public listed company incorporated in the United Kingdom (the “Defendant”) on 26TH July, 2013.
2. RATIONALE FOR THE SUIT
The legal suit is pursuant to the Plaintiff’s purchase of Equipment (defined as 2 gas turbine generating sets with ancillary equipment) from the Defendant for a total purchase price of United States Dollars Thirty One Million (USD31,000,000) equivalent RM95,945,000 [@USD3.095] wherein the Plaintiff paid a Deposit of USD3,100,000 equivalent to RM 9,594,500 being 10% of the total purchase price. The brief justification for the suit is based on the following issues set forth below:-
(1) The Defendant required the Deposit prior to the Plaintiff being allowed to inspect the Equipment;
(2) Defendant represented that if the Deposit was not paid by the Plaintiff; the Equipment would be sold to a third party;
(3) Defendant represented to the Plaintiff that should the inspection of the Equipment yield unsatisfactory results, the Deposit would be refunded and the Defendant would be at liberty to sell the Equipment to other third parties;
(4) The Plaintiff discovered that the contrary to the Defendant’s representations, the Defendant is not the owner of the Equipment and had no requisite power to sell the Equipment to the Plaintiff and that the Equipment was in fact defective and not of merchantable quality state and/or fit for its purpose; and
(5) Plaintiff through its subsidiary, Oil Field Services Ltd (“Power Proponent Company”) had entered into an agreement with the Government of Iraq for the supply of electricity and as such the Plaintiff had to purchase the Equipment for the said power supply contract and this fact was represented to the Defendant.
The Plaintiff requested the Defendant to address and resolve the above issues however the Defendant failed, refused and/or neglected to respond to the Plaintiff’s notice. Hence the Plaintiff on 28th February 2013 sent a letter to the Defendant’s office demanding a refund of the said Deposit however the Defendant to date has refused to refund the Deposit and announced the probable sale of the Equipment to a third party. The Plaintiff claims for a refund of the Deposit to the amount of USD3,100,000, damages to the amount of RM20,000,000 being damages incurred as a result of point (5) above, damages for the loss of investment in the Power Proponent Company to the amount of USD500,000 and all monies paid in respect or in connection with the purchase of the Equipment “in restitution in integrum” in accordance with Section 66 of the Contracts Act 1950 and costs incurred in the cause.
2. FINANCIAL EFFECTS OF THE MATERIAL LITIGATION
This material litigation against the Defendant will not have any material effect on ICB’s earnings per share, net assets per share, gearing, share capital and substantial shareholder’s shareholdings for the financial year ending 31st March 2014. The Company expects that pursuant to the facts of the case and advise of its solicitors, the case will be held in the Plaintiff’s favour..
3. COMPLIANCE WITH SECURITIES COMMISSION’S POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES.
The Board ensures that further announcements on material information on this material litigation will be made as deemed appropriate and in compliance with the ACE Market Listing Requirement.
This announcement is made on 30th July 2013
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