Malaysia Building Society Berhad's ("MBSB" or "the Company") solicitors were served with a Counter-claim filed on behalf of Yeng Chong Realty Bhd ("Yeng Chong") seeking damages against MBSB in the sum of RM445 million for alleged losses suffered by Yeng Chong from a development project in Malacca which to-date remains uncompleted.
This Counter-claim was filed by Yeng Chong in a civil suit which MBSB had instituted in the Kuala Lumpur High Court in June 2003 against Yeng Chong, seeking recovery of the sum of RM287 million, together with interest, being Yeng Chong's indebtedness to MBSB by reason of their failure to repay to MBSB 2 Term Loans totalling RM178 million. MBSB's claim in the civil suit against Yeng Chong is a typical banker/customer action seeking judgment for monies lent to a defaulting customer of MBSB.
MBSB's solicitors have advised that MBSB has a strong case against Yeng Chong in the civil suit which is pending MBSB's solicitors further advise that Yeng Chong's Counter-claim against MBSB is without any basis in law, and is without merit. As MBSB has a sound and complete defence to the Counter-claim, it is confident that Yeng Chong's Counter-claim will be dismissed.
FINANCIAL AND OPERATIONAL IMPACT OF THE WRIT ON THE GROUP
A. FINANCIAL IMPACT
The Company at the moment is seeking legal advice from the solicitors and are unable to determine the financial impact arising from the Writ of Summons. Details of the financial impact will be forwarded in due course.
B. OPERATIONAL IMPACT ON THE GROUP
The Company does not foresee any operational impact on the Group arising from the writ.