Courts orders Tan Chong to return repossessed buses to Konsortium Transnasional, pay over RM23m
KUALA LUMPUR (July 19): Konsortium Transnational Bhd and six other companies linked to the group have succeeded in their lawsuit to get Tan Chong Motor Holdings Bhd to return all buses repossessed from them and to repay a sum of RM22.68 million.
In a filing with Bursa Malaysia, Tan Chong said the High Court has also ordered the return of a land acquisition compensation sum of RM877,000 by its wholly-owned unit, Tan Chong Industrial Equipment Sdn Bhd (TCIE), to the seven companies.
Besides Konsortium Transnasional, the six other companies are Transnasional Express Sdn Bhd, Plusliner Sdn Bhd, Syarikat Kenderaan Melayu Kelantan Bhd (SKMK), Syarikat Rembau Tampin Sdn Bhd (SRT), Kenderaan Langkasuka Sdn Bhd and MHSB Properties Sdn Bhd.
Five of them — Transnasional, Plusliner, SKMK, SRT and Langkasuka — had owed TCIE RM32.92 million in outstanding rentals and service bills for the leases and maintenance of the vehicles.
According to Tan Chong, a settlement agreement for the debt was reached on July 4, 2016, under which the debtors agreed to repay RM16.92 million in several cash instalments to TCIE, and transfer a plot of land in Ampang owned by MHSB to TCIE to settle the remaining RM16 million.
"Pursuant to the settlement agreement, a sale and purchase agreement was entered into between MHSB and TCIE on July 4, 2016 for the sale of the land.
"The plaintiffs failed to make timely repayments of the balance debt. Hence, TCIE exercised its contractual rights under the settlement agreement to repossess the vehicles leased to the debtors," said Tan Chong.
In their legal action, Konsortium Transnasional and the other six companies sought an injunction to restrain TCIE from entering into any dealings in relation to the Ampang land, a declaration that the value of the land is RM55.6 million, the repayment of the sum of RM22.68 million, the return of the vehicles, and the sum of RM877,000 being compensation paid by the government for the acquisition of part of the land.
Tan Chong said that based on the advice of its solicitors, TCIE is of the view that there are reasonable grounds to appeal the judgement.
"TCIE has instructed its solicitors to file a notice of appeal and apply for a stay of execution of the judgement of the High Court.
"Should TCIE fail in its contestation of the case, (Tan Chong) is of the opinion that the group is able to fulfil the commitment to the above-mentioned claim and does not expect any significant impact on the net assets per share of the group," said Tan Chong.
Tan Chong shares closed three sen or 2.5% lower at RM1.17, giving the group a market capitalisation of RM786 million. The group saw 10,000 shares traded.
Konsortium Transnasional shares closed unchanged at 12 sen, valuing the group at RM402 million, with 148,500 shares changing hands.