This article first appeared in The Edge Malaysia Weekly on September 23, 2024 - September 29, 2024

Country Heights Holdings Bhd (KL:CHHB) issued a press statement last week saying its contractor Lean Xing Construction Sdn Bhd for a residential project at Kolej Heights Utara had filed a petition against its subsidiary Country Heights Smart Living. According to the statement, the dispute is over claims for unpaid sums related to the construction of 90 “Super-Linked Modern Contemporary” houses.

CHHB explained that the unpaid sums are tied to the ongoing Liquidated Ascertained Damages (LAD) and variable orders, which are yet to be finalised. “As a result, the accounts related to this project remain open, and no payments can be made to Lean Xing Construction at this juncture pending the resolution and ascertainment of the LAD,” the statement said.

The statement also stated that CHHB’s board had decided to formally request Lean Xing Construction to withdraw the petition.

“Should they fail to do so, CHHB will be left with no option but to inform Bursa Malaysia of the potential reputational harm caused by this action. CHHB stands firm in protecting its reputation and warns other parties considering similar legal actions to refrain from making baseless claims,” it said in the statement.

Many will find the statement puzzling. First, CHHB is obliged to inform the stock exchange regulator any material information related to the group. Why didn’t it inform the bourse of the petition filed by its contractor?

In other words, whether or not the contractor withdraws the petition, it should not be the deciding factor for CHHB to disclose the matter to Bursa. In fact, why should the contractor withdraw the petition just because CHHB said it would inform the stock exchange of “the potential reputational harm” caused by the petition if it fails to do so?

CHHB said in the statement that it remained “committed to ensuring the highest level of accountability and will only settle outstanding sums upon proper validation and completion of this final step”. As the group has followed the proper procedures, without any intention to hold back any payments, it should have its say in court. As such, why not leave it to the court to decide?

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