KUALA LUMPUR: Kumpulan Jetson Bhd's shares fell to a low of 35.5 sen in afternoon trade on Tuesday after it announced a RM919.32mil construction job had been withdrawn over an allegation of misrepresentation.
At 2.36pm, it was down 7.5 sen to 35.5 sen with 6.14 million shares done.
During the market break, the construction company announced that MCC Overseas (M) Sdn Bhd, which is a subsidiary of China Metallurgical Group Corporation, had rescinded the sub-contract to build high-rise serviced apartments and a hotel along Jalan Conlay here.
Jetson said it had received a letter from MCC wherein the latter “purported to unilaterally rescind the award of the sub-contract relating to the project”.
It said MCC had withdrawn the sub-contract on the basis that there was an alleged misrepresentation or non-disclosure of a certain matter namely that one of the substantial shareholders of company is a director of a third party consultant to the employer of the project.
“The company wishes to inform that MCC has not given an opportunity to Jetson Construction Sdn Bhd (JSCB) to respond prior to the purported unilateral rescission and JCSB denies any misrepresentation or non-disclosure or wrongdoing giving rise to such rescission.
“JCSB believes that MCC has repudiated and wrongfully rescinded the said letter of award / sub-contract.
“JCSB is seeking legal advice on this matter and will take appropriate action in due course,” it said.
Last Thursday, Jetson said the building works were valued at RM336.67mil and prime cost and provision sum at RM582.65mil. At RM919.32mil, this is nearly 10 times its current market capitalisation of RM96.94mil.
Under phase one, it involved the basement and a 10-story podium block, while under phase two, the Tower A comprises of 61 stories of serviced apartments and phase three or Tower B is 56 stories of seriviced apartments.
Phase four is Tower C which comprises of a 72-storey hotel and hotel suites.
“The project is expected to contribute positively to the earnings of Jetson and its subsidiaries for financial years ending 2017 to 2021,” it said.
At RM919.32mil, this was 9.5 times its market capitalisation of RM96.94mil last Thursday.
The share price had surged from 38.5 sen to 44.5 sen on Wednesday, a day before the announced. It rose to a high of 50 sen on Thursday before the announcement.
http://www.thestar.com.my/business/business-news/2017/07/04/shocker-for-kumpulan-jetson-as-mcc-rescinds-rm919m-job/
