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Wednesday, March 17, 2010

PPH Resorts counter-sues SP Setia unit

PETALING JAYA: PPH Resorts (Penang) Sdn Bhd has filed a counter claim against SP Setia Bhd unit Setia Promenade Sdn Bhd which recently filed a writ of summons and statement of claim against the former to recover its project advances, interest in the advances and development project expenditure incurred.

PPH was claiming RM5.72mil and “damages alleged to have been suffered” to be assessed by the court, SP Setia said in a filing with Bursa.

Setia Promenade had filed a suit against PPH after terminating the joint venture (JV) agreement between the parties following a thorough assessment of the proposed development on 45-acre freehold land in Penang, citing among other reasons, failure of common purpose of the JV agreement.

SP Setia said Setia Promenade had advanced about RM12.2mil to secure the release of some of the affected lots and incurred development project expenditure in pursuance of the proposed JV. It said the JV was announced in December 2006 and it stated that said Setia Promenade would was to provide the initial funding for the development of the land and these that shall be treated as advances to the JV.

According to the agreement, Setia Promenade shall be entitled to charge interest at the rate of 8% per annum on the advances and shall have the right to create encumbrances over the land to secure the advances and interest on the advances.

PPH had filed a counter-action on March 12 for, among others, the recovery of the sum of RM5.72mil and damages alleged to have been suffered to be assessed by the court.

“The legal action is not expected to have a material adverse impact on the earnings and the net assets of the company,” the company said.

By The Star

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